Information Technology Relatedness, Knowledge Management Capability, and Performance of Multibusiness Firms1

Business value of information technology is an enduring research question. The elusive link between IT and financial firm performance calls for further research into intermediate organizational variables through which IT may influence firm performance. This study proposes that knowledge management (KM) is a critical organizational capability through which IT influences firm performance. In the context of multibusiness firms, the study examines how the IT resources of a firm should be organized and managed to enhance the firm’s KM capability, and whether and how KM capability influences firm performance. The study develops two hypothesizes: (1) IT relatedness of the firm’s business units enhances cross-unit KM…