Exploring the Interplay of Sensemaking, Market Agility, and Information Technology Alignment in Business Model Innovation

Abstract

Manufacturing firms are facing the complex challenge of deploying information technology (IT) alignment and establishing market agility to drive business model innovation (BMI). While existing literature has established a link between organizational sensemaking and BMI, the interaction between market agility and organizational sensemaking for BMI remains unexamined. Drawing from a knowledge base view, this study addresses this research gap by examining the moderating effect of IT alignment on the mediating role of market agility in the relationship between sensemaking capability and BMI. Our data, collected from 232 engineering manufacturers, along with the application of PLS-SEM to test the conceptual model, reveal that the effect of organizational sensemaking capability on BMI through market agility depends on IT alignment. These findings enhance our understanding of IT alignment’s role in a firm’s development of BMI via market agility, providing valuable implications for managerial practices by underscoring the importance of IT alignment for BMI. By grasping this interaction, managers can unlock the potential for more effective and innovative business models, fostering enhanced competitiveness and sustained growth.