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There is growing use of business intelligence (BI) for better management decisions in industry. However, empirical studies on BI are still scarce in academic research. This research investigates BI from an organizational agility perspective. Organizational agility is the ability to sense and respond to market opportunities and threats with speed, and BI can help in the sensing role of organizational agility. Drawing on the systems theory, dynamic capabilities framework, and literature on competitive advantage, organizational agility, business intelligence, and IT infrastructure flexibility, we hypothesize that BI use and IT infrastructure flexibility are major sources of organizational agility. We developed a research model to examine the effects of BI and IT infrastructure flexibility on organizational agility. This model also examines how organizational agility mediates the effects of BI and IT infrastructure flexibility on an organization’s competitive advantage. Survey data were collected and used to assess the model. The results support the hypothesis that BI and IT infrastructure flexibility are significant sources of organizational agility, and organizational agility partially mediates the effects of BI and IT infrastructure flexibility on an organization’s competitive advantage. This research is a pioneer work that empirically investigates the significance of BI in the business context. It also demonstrates from the organizational agility perspective that information technology and systems have strategic values for organizations, as they are significant sources of organizational agilities and competitive advantages.
Advisor: Keng L. Siau