Abstract

The study on the links between strategy, structure and performance has been for long time a fundamental and highly important research topic for the management researchers and practitioners. In this direction this paper presents a ‘holistic’ empirical investigation of the whole network of relations between business strategy (at a first level), information and communication technologies (ICT) investment, non-ICT investment and BPR (at a second level), and finally business performance (at a third level). It is based on firm-level data from 271 Greek firms, which are used for the estimation of structural equation models (SEM) connecting the above variables, theoretically based on the Cobb-Douglas Production Function. It is concluded that none of the three generic business strategies defined by M. Porter (cost leadership, differentiation and focus) has a significant effect on ICT and non-ICT investment; on the contrary, particular strategic choices (differentiation and focus strategy) have been found to drive process change. Also, it has been found that all the investigated internal factors, ICT investment, non-ICT investment and BPR, have a positive impact on business performance. Concerning their interrelations, ICT investment affects positively BPR, which indicates that BPR is a partial mediator in the relationship between ICT and performance; on the contrary, this does not happen with non-ICT investment, indicating an important difference between these two types of capital investment as to their relation with process change.

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