Information Systems ResearchVol. 21, No. 4, December 2010, pp. 835–848issn 1047-7047 �eissn 1526-5536 �10 �2104 �0835

informs ®

doi 10.1287/isre.1100.0326©2010 INFORMS

Research Commentary

Seeking the Configurations of Digital Ecodynamics:It Takes Three to Tango

Omar A. El SawyMarshall School of Business, University of Southern California, Los Angeles, California 90089,

elsawy@marshall.usc.edu

Arvind MalhotraKenan-Flagler School of Business, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599,

arvind_malhotra@kenan-flagler.unc.edu

YoungKi ParkMarshall School of Business, University of Southern California, Los Angeles, California 90089,

youngki.park@usc.edu

Paul A. PavlouFox School of Business, Temple University, Philadelphia, Pennsylvania 19122,

pavlou@temple.edu

This paper starts from the premise that the simultaneous increase in environmental turbulence, the requi-site speed of organizational change, and the intensified ubiquity of digital technologies are spawning a

phenomenon that is messy, complex, and chaotic. Accordingly, we need to change the way we examine howinformation technology (IT) can help organizations build a strategic advantage in turbulent environments. Wepropose a more systemic and holistic perspective to theory building and testing in the information system (IS)strategy area and correspondingly appropriate methods that capture the complexity of this phenomenon. Weterm this phenomenon digital ecodynamics, defined as the holistic confluence among environmental turbulence,dynamic capabilities, and IT systems—and their fused dynamic interactions unfolding as an ecosystem. Webelieve that a more holistic understanding of digital ecodynamics will fuel the next leap in knowledge in the ISstrategy area.First, extending the strategic management literature that has mainly focused on two-way interactions between

environmental turbulence and dynamic capabilities, we foreground IT systems as a third central element. Weuse a “threesome tango” analogy1 with strong mutual interdependence to accentuate our view of digitalecodynamics—while also stressing the emerging role of IT systems in triggering environmental turbulence andshaping dynamic capabilities to build a strategic advantage. Second, we propose a different paradigmatic lens(configuration theories) as an appropriate inquiring system to better understand the complexity of digital eco-dynamics. The paper articulates the key aspects of configuration theories as inquiring systems, compares themwith the more common variance theories and process theories, and illustrates the power of recent advancesin configurational methods. Third, we create a preliminary roadmap for IS researchers to better examine dig-ital ecodynamics using novel structural properties afforded by configuration theories (i.e., mutual causality,discontinuity, punctuated equilibria, nonlinear change). Fourth, we reflect on the broader opportunities thatthe configurational perspective of digital ecodynamics can create for IS strategy research. The paper ends byhighlighting the double-barreled opportunity that digital ecodynamics renders, both as an energizing vision forIS strategy research and also as a reshaper of strategic management research and practice in a turbulent anddigitized world.

Key words : digital ecodynamics; information systems strategy; digital disruption; configuration theory; holisticperspective; environmental turbulence; dynamic capabilities; IT systems; ecosystem dynamics

History : Vallabh Sambamurthy, Senior Editor. This paper was received on July 1, 2010, and was with theauthors 21 days for 2 revisions. Published online in Articles in Advance November 18, 2010.

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El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to Tango836 Information Systems Research 21(4), pp. 835–848, © 2010 INFORMS

1. The Threesome Tango ofDigital Ecodynamics

For at least the last 20 years, the information sys-tem (IS) strategy field has sought to better under-stand how capabilities and strategic advantage canbe enhanced with the aid of information technology(IT) in turbulent environments (e.g., Desouza 2007;Pavlou and El Sawy 2006, 2010; Sambamurthy et al.2003). Concurrently, the environment is becomingincreasingly turbulent (Wiggins and Ruefli 2005), towhat some called hyperturbulence (D’Aveni 1994);organizations have developed more powerful reper-toires of dynamic capabilities to cope with turbu-lence; and IT systems have multiplied and becomemightier. The interactions among environmental tur-bulence, dynamic capabilities, and IT systems havealso become increasingly complex. Most important,the role of IT has shifted from one of separableback-office support to one of fusion with businessprocesses, and the increased velocity and unprece-dented connectivity provided by digitization havemade IT systems themselves a trigger of environ-mental turbulence. These complex and fused inter-actions have led to redrawn industry boundaries,revised industry rules, new organizational forms andstructures, enhanced interorganizational reach andrange, and powerful network externalities in businessecosystems.Despite the prominent role of IT in building a

strategic advantage in turbulent environments, thestrategic management literature typically stops atthe dyadic interaction between environmental turbu-lence and dynamic capabilities. In fact, less than 3%of research articles in leading management journals

1 “It takes two to tango” is an idiomatic expression that connotesa situation in which more than one entity is paired together in aninextricably linked and active manner related to some outcome. Thetango is a dance in which the two dancing partners move in relationto each other, sometimes in tandem and sometimes in opposition,and it is characterized by punctuated equilibria. The article subtitle(“It Takes Three to Tango”) aims to draw attention to the centralityand mutual interdependence of three core elements (environmentalturbulence, dynamic capabilities, and IT systems) in this proposed“threesome” tango of digital ecodynamics. The title of the papersuggests that this threesome and its effects on strategic advantageare affected by the configurational dynamics of all core elements inconfluence.

have directly studied the relationship between IT andorganizations (Orlikowski 2010, Zammuto et al. 2007).However, considering the malleable role of IT sys-tems in shaping dynamic capabilities to manage envi-ronmental turbulence (Malhotra et al. 2007, Pavlouand El Sawy 2006), ignoring the role of IT systemsis at best incomplete and even potentially mislead-ing (Zammuto et al. 2007). The IS strategy litera-ture is equally guilty of underplaying the role ofenvironmental turbulence when studying the rela-tionship between IT systems and dynamic capabili-ties. For example, alignment-fit theories between ITand business strategy (e.g., Rivard et al. 2006, Ohand Pinsonneault 2007) only implicitly address theexternal environment without articulating its role(extending what older studies—(e.g., Henderson andVenkatraman 1993)—did). New environmental con-ditions erode the strategic advantage created byonly aligning intraorganizational elements, and thisbecomes much more critical as environmental tur-bulence increases. Thus, directly addressing envi-ronmental turbulence in IS strategy studies is asvital as addressing IT systems explicitly in strategicmanagement studies. Therefore, we contend that itis important to examine three-way dynamics amongenvironmental turbulence, dynamic capabilities, andIT systems to understand better how to build astrategic advantage. We highlight the need to shiftfrom a two-way interaction to an inclusive triadicconfiguration—and the need to capture the complexinteractions among all three elements in confluence.Each of these elements—environmental turbulence,

dynamic capabilities, and IT systems—has beenindividually studied and articulated in the strate-gic management and IS strategy literatures. OnlineAppendix A2 lists a representative set of their dimen-sionalities that reveals their complexity, diversity, andnumerosity. This complexity is further augmented bythe messy, nonlinear, and discontinuous interactionsamong these three elements. We contend that in addi-tion to making sure that all elements are in the mix, itis incomplete to treat their two-way interaction effectsindependently because of the fused interdependencies

2 Additional information is contained in an online appendix to thispaper that is available on the Information Systems Research website(http://isr.pubs.informs.org/ecompanion.html).

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to TangoInformation Systems Research 21(4), pp. 835–848, © 2010 INFORMS 837

of their triadic interaction. Rather, there is a need tocapture the complex patterns of the dynamic interde-pendencies among these three elements simultaneouslyin a holistic way. We term this phenomenon digitalecodynamics and defined it as the holistic confluenceamong environmental turbulence, dynamic capabili-ties, and IT systems—and their fused dynamic inter-actions unfolding as an ecosystem.Introducing the systemic phenomenon as digital

ecodynamics does not imply that IT systems arethe most important factor to deal with environmen-tal turbulence or that dynamic capabilities are lessimportant. Digital ecodynamics is simply introducedto amplify the notion that the three core elementsare closely fused. Figure 1 illustrates the interac-tions among these three elements through intersect-ing orbits but also signals the fusion quality of digi-tal ecodynamics through an entangled Gordian knotat the center. The digital ecodynamics has no sepa-rations among its three core elements, but it is thewholeness of the fused interactions among the threeelements. Nonetheless, although Figure 1 helps illus-trate the notion of digital ecodynamics, it still hidesthe dynamic reality, which we seek to capture inthis article.We use the modified idiomatic expression “it takes

three to tango” to draw attention to the dynamicmutual interdependence of three elements (environ-mental turbulence, dynamic capabilities, and IT sys-tems). Like dancing partners, this is a situation inwhich the threesome gyrates together in an inextrica-bly linked and interactive manner. The “tango” is an

Figure 1 Digital Ecodynamics as Holistic Confluence Among theProposed Three Core Elements

Environmentalturbulence

Dynamiccapabilities

IT systems

Digitalecodynamics

apt metaphor, as dancing partners move in relationto each other, sometimes in tandem and sometimesin opposition. Accordingly, we contend that we canbetter understand this three-way tango of digital eco-dynamics by looking into its complex configurationalaspects. There may be additional elements in the mix(such as organizational culture or structure), but wereason that these three elements are the nexus ofdigital ecodynamics based on their prominence bothin the strategic management and IS strategy liter-atures, and in management practice. The strategicmanagement literature stresses the role of dynamiccapabilities in coping with environmental turbulence(cf. Eisenhardt and Martin 2000), and the IS strategyliterature emphasizes how IT systems can be usedas digital platforms for shaping dynamic capabili-ties (cf. Sambamurthy et al. 2003). To capture thatcomplexity and understand the role of digital ecody-namics as a source of strategic advantage, we needinquiring systems (theory basis and accompanyingmethodologies) that capture this inherent complex-ity. We argue that configuration theories could be anappropriate candidate and will fuel the next jump inIS strategy understanding.The remainder of this paper is organized as fol-

lows: §2 reviews configuration theory and explainswhy it may be an appropriate inquiring systemto understand digital ecodynamics as a “threesometango.” Section 3 shows how configurational theorycan inform digital ecodynamics to gain new insightsand guide future IS strategy research. Section 4 drawsimplications of effectively probing this threesometango of digital ecodynamics for the future of IS strat-egy research and managerial practice.

2. Configurational Theories asInquiring Systems forDigital Ecodynamics

For the last 20 years, the IS strategy area has mainlyespoused the paradigmatic lenses of two types of the-ories as inquiring systems (Churchman 1971): variancetheories and process theories. First, variance theories arevery good at predicting levels of outcomes from lev-els of predictor variables, and they assume an invari-ant relationship between cause and effect as the levelsof these variables change. Variance theories assume

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to Tango838 Information Systems Research 21(4), pp. 835–848, © 2010 INFORMS

that each single cause has its own independent effecton the outcome. In variance theories, the predictoris posited as a necessary and sufficient condition forthe outcome. Although many research advances inIS strategy came about through variance theories,the pristine mental frames of variance theories maybe insufficient for studying the complexity of digitalecodynamics—which is replete with mutual causality,fuzzy boundaries, and discontinuities. Nor are vari-ance theories well suited to disequilibrium conditionsin which elements and their relations change (Meyeret al. 2005).Second, process theories are helpful for explain-

ing outcomes over time, including those that canbe viewed as discrete or discontinuous “changes ofstate.” In process theories, the predictor is viewedas insufficient to cause the outcome, but it is neces-sary for the outcome to occur, and contingent eventsare accommodated (Markus and Robey 1988). Pro-cess theories are good at tracing and explaining theunfolding “how” of a phenomenon based on trig-gers and manifestations over time, and they excel atcapturing contextual detail. Although many advancesin IS strategy have relied on process theories, theytoo are not best suited for capturing holistic systemiceffects where the interplay of variables spawns emer-gent properties only evident at the level of the whole(Ackoff 1994).However, there is a third type of theory that

we propose is better suited as an inquiring systemfor studying digital ecodynamics with their holisticmessy nature: configuration theories (e.g., Meyer et al.1993, Doty et al. 1993, Fiss 2007). Configuration the-ories complement variance theories and process the-ories to help better understand digital ecodynamics,and we posit that they have the potential to render thenext quantum leap in advancing IS strategy research.Configuration theories emanate from understandingpatterns and combinations of elements and how they,as configurations, cause certain outcomes to occur.A configuration is a specific combination of causalvariables (termed elements or conditions) that gener-ate an outcome of interest (Rihoux and Ragin 2009).Configuration theories view phenomena as clustersof interconnected elements that must be simultane-ously understood as a holistic integrated pattern (ver-sus individual elements separately), thus overcoming

the traditional reductionism problem (Meyer et al.1993). In configuration theories, elements are viewedtogether in combinations, and theoretical models canparsimoniously capture complexity. Besides, configu-rational theories allow us to have the intuitive sim-plicity of typologies, which is heuristically attractiveto practitioners (Mintzberg 1979). Similar to variancetheories and process theories, configuration theoriescan be applied at many levels of analysis to under-stand phenomena in organizations, supply chains,and ecosystems. Configuration theories also accom-modate complex interconnectedness of multiple ele-ments, nonlinearities, and discontinuities (Meyer et al.1993). Therefore, they are well suited to the realities ofmutual causality, discontinuity, punctuated equilibria,and nonlinear change associated with digital ecody-namics. Configuration theories accommodate equifi-nality (variance theories only allow unifinality) wherea different set of elements can produce the same out-come (Ragin 2008); this is a property that typicallycharacterizes digital ecodynamics. Finally, their inher-ent structure keeps the notion of mutual causalityconnected to the context, making them well suitedto middle-range, context-sensitive (rather than univer-sal) theories—which are appropriate for the fields ofIS strategy, strategic management, and social sciencesin general (Rihoux and Ragin 2009).However, until recently, configurational approaches

have had limitations, especially in terms of dealingwith complex causality. Theorizing typically endedwhen an effective configuration was identified (Dotyand Glick 1994), and there was little insight as towhich element in the configuration was more crit-ical and why or how various elements interactedto produce an outcome (Fiss 2010). Most recently,advances have exposed the inner workings of the“black box” of configuration theories and developedassociated methodologies for data analysis. Theseadvances have provided a more fine-grained under-standing of complex causality, while also developingadvanced methodologies that remain connected to theholistic perspective (e.g., Ragin 2000; Fiss 2007, 2010;Ragin 2008; Rihoux and Ragin 2009; Kogut 2010), thus“not throwing out the baby with the bath water.”These theoretical and methodological advances allowus to move beyond many of the limitations of “con-ventional” configuration theories, and we are heading

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to TangoInformation Systems Research 21(4), pp. 835–848, © 2010 INFORMS 839

Table 1 Key Aspects of Configurational Theories as Inquiring Systems

Aspect Explanation

1. Holistic and systemic perspectiveas lens

This is a view of phenomena as clusters of interconnected structures and processes that need to be understoodsimultaneously—rather than as separable entities whose elements can be understood in isolation or inseparable interaction with each other. It is not individual independent variables that are connected to dependentvariables, but holistic patterns and combinations of causal elements that influence preferable outcomes. It isalso not about which causal variable has the biggest effect, but how different elements combine to determinethe outcome. Additivity of individual variables is no longer assumed, and the theory seeks to uncover “causalcombinations” (or “causal recipes” or “constellations”). Thus, the analysis of causality does not self-destructthe holistic properties of the phenomenon that the researcher is trying to capture.

2. Equifinality as possibility Configurational theories allow for situations of equifinality, where a system can reach the same outcome fromdifferent initial conditions and through many different paths. Therefore, different causal recipes may yieldsimilar outcomes. This property accommodates the reality of contextual and managerial differences inorganizational settings.

3. Limited diversity as reality Mathematically, a number n of elements will yield an unwieldy 2n permutations, and thus the higher the n, themore the number of possible configurations, making it difficult to infer causality. However, the theoretical andempirical reality of the management context results in a limited diversity of configurations in practice, makingthe inference of causality manageable through the researcher’s theoretical and contextual understanding. Thereis still the problem of unobserved configurations, but unobservability is a problem that is endemic of empiricalsettings with all types of theories.

4. Research propositions as causalrecipes

Whereas variance theories express hypotheses as correlational expressions and process theories as longitudinalunfolding of pathways, configuration theories express hypotheses as causal recipes that specify thecontextually relevant elements that in combination produce particular outcomes. The variety of combinationsand their related outcomes help uncover the causal patterns.

5. Rich combinatorial causality asbenefit

Research propositions in configurational theories can have structures that theoretically specify both whichelements should be present and which element should be absent in the causal recipe. Moreover, researchpropositions can specify which are the core elements and which are the peripheral elements that influence theoutcomes, and how often they appear in instances can indicate their relative importance. Thus, configurationtheories can accommodate asymmetric and multifaceted causality, including suppression, substitution, andcomplementarity effects.

6. Discontinuity and nonlinearity asnormal

The nature of configurations is inherently discontinuous, making them suitable to study nonlinear phenomenathat exhibit punctuated equilbria. In the structure of configuration theory, the causes leading to the presence ofan outcome can be different than those leading to the absence of an outcome (termed causal asymmetry), thusaccommodating nonlinearity in causation. Furthermore, as different from variance theories, configurationtheories do not annul anomalies, which are often of special interest in conditions of environmental turbulence.

Source. Data taken from Ragin (2000), Fiss (2007, 2010), Ragin (2008), Rihoux and Ragin (2009), and Kogut (2010).

into what we might conceive as a “second generation”of configuration theory approaches.Table 1 summarizes key aspects of configuration

theories as inquiring systems (including recent con-ceptual and structural advances), focusing on theattractive features of configuration theories for study-ing holistic phenomena such as digital ecodynamics.However, a theoretical structure that is used in empir-ical settings is only attractive to the extent that itis accompanied by commensurate methods for ana-lyzing data and inferring results. Until recently, con-figurational approaches were limited to identifyingsimple typologies and using existing methods forfurther analysis, such as linear regression, interactioneffects, cluster analysis, or Euclidean distance-based

deviation scores (Fiss 2007). Such methods wereunable to support some aspects in Table 1 that arefundamental to examining systemic and holistic phe-nomena. For example, linear regression examines thenet effect of a variable on the outcome by hold-ing other variables constant, thus missing the holisticeffect. Similarly, cluster analysis can only manage sim-ple causality, and it neither differentiates the relevantimportance of each element on the outcome of theconfiguration nor uncovers the full richness of mutualcausality in holistic phenomena.More recently, advances in empirical methods have

aptly captured the holistic nature of configurationtheory and addressed key aspects of Table 1. Mostnotable is fuzzy set qualitative comparative analysis

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to Tango840 Information Systems Research 21(4), pp. 835–848, © 2010 INFORMS

(fsQCA; http://www.fsqca.com) (e.g., Ragin 2008,Ragin and Fiss 2008, Fiss 2010). As a set-theoreticmethod, fsQCA uses techniques based on Booleanalgebra (i.e., set membership) to determine how con-figurations are linked to outcomes. fsQCA’s use offuzzy rather than crisp sets allows the specification ofthe degree of membership in a set, rather than just thepresence or absence—thereby enabling us to capturethe rich properties of multifaceted causality describedin Table 1.Configuration theories are not without limitations,

even in their “second-generation” form. Thus, theyare not proposed to supplant variance theories orprocess theories but are complementary augmenta-tions for capturing the holistic aspects of messy,complex, and chaotic phenomena, such as digital eco-dynamics. Configuration theories may be good at dis-cerning holistic phenomena with complex causality,but they lack an explaination for the longitudinal“how” of causal configurations—and process theo-ries are better there. They also have a “temporality”

Figure 2 Testable Configurations Expressed Using fsQCA Approach

IT systems

PRMS

CWS

OMS

Dynamic capabilities

Improvisational capability

Planned dynamic capability

Environmental turbulence

Demand uncertainty

Technological discontinuity

configurations configurations

a1 a2 b1 b2

configurations

c1 c2

High-performing Low-performing Very high-performing

Core–presence

Core–absence Peripheral–absence

Peripheral–presence

Notes. Dark shaded circles indicate the presence of an element. Crossed-out circles indicate the absence of an element. Large circles indicate core elements.Small circles indicate peripheral elements. Blank spaces indicate a “don’t care situation,” in which the causal element may be either present or absent.Configurations are grouped by their core elements.

problem (Rihoux and Ragin 2009); they are unableto inherently track shifts over time. Also, variancetheories are more suited to building and testing uni-versal and generalizable theories. They are also morepowerful in situations of low dynamism, where holis-tic complexity can be assumed away as error vari-ance. Configuration theories, however, are best suitedto “modest generalization” (Rihoux and Ragin 2009)based on the nature of causality being both con-text specific and conjecture specific, always keepingthe connection between context and causal inference.This is a double-edged sword, because the researcherneeds to be engaged and cognizant of the study’s con-text, thus not making the interpretation of the data“automatic” but requiring identification of plausibleconfigurations that are applicable in practice.Configuration theories allow new research propo-

sitions that guide theory building and theory test-ing on configurations of digital ecodynamics thatwould result (or not) in outcomes of interest (e.g.,performance). Figure 2 offers an example of how

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to TangoInformation Systems Research 21(4), pp. 835–848, © 2010 INFORMS 841

a novel configurational method—(fsQCA)—can beleveraged to empirically examine propositions ondigital ecodynamics. It explicates the complexity indigital ecodynamics with a succinct visual represen-tation to identify the complex interactions amongthe three proposed core elements. Pavlou and ElSawy (2006, 2010) examined the interrelationshipsamong environmental turbulence, dynamic capabili-ties, and IT systems in the context of new productdevelopment using variance theories. They showedthat improvisational capabilities (dynamic capabili-ties that enable spontaneous change) are best suitedfor extremely turbulent environments characterizedby storms, or sudden changes in market demandand unexpected breakthroughs in new technologies—while planned dynamic capabilities (those that enableplanned change) are best suited for moderately tur-bulent environments characterized by waves, or pre-dictable changes in market demand and predictabletechnological breakthroughs. Besides these effectivetwo-way configurations, they showed that planneddynamic capabilities are supported by organiza-tional memory systems (OMS), while “spontaneous”improvisational capabilities are enhanced by projectand resource management systems and collabora-tion work systems, thus essentially identifying twodiscrete two-way effective configurations. It is pos-sible to transform these discrete two-way configura-tions into holistic three-way configurations. Ex post,adapting a configurational approach to these findingsand viewing the possible interactions among thesethree elements in a systemic and holistic way, Fig-ure 2 presents a set of high-performing and low-performing configurations presented from an fsQCAperspective, which can extend Pavlou and El Sawy’swork to get a deeper understanding through a con-figurational lens. Besides the two identified high-performing configurations, we speculate the existenceof two low-performing and two very high-performingconfigurations. The purpose of Figure 2 is to givean illustrative example of using fsQCA to highlight“testable configurations” that can spur future researchto build and test new theories of digital ecody-namics. The notations in Figure 2 follow Ragin andFiss (2008).Using fsQCA (Figure 2), we can explore, inter-

pret, and describe the key aspects of configuration

theories. First, performance outcomes are explainedby the configurations in a holistic causality fashion,rather than through any single element. For exam-ple, we can infer that a certain configuration (e.g., a1)results in high performance, but we cannot infer thatIT systems (or dynamic capabilities or environmentturbulence) independently affect a high performance.Second, the two high-performing configurations (i.e.,a1, a2) reveal two discrete combinations of IT sys-tems, dynamic capabilities, and environment turbu-lence that can result in a similar level of performance(illustrating the property of equifinality). Third, thereare only a few very high-performing configurations,based on the limited diversity principle. For exam-ple, only two configurations are expected to havevery high performance (i.e., c1, c2). Fourth, each ofthe configurations is posited to have a causal rolein performance (causal recipe), while specifying thepresence/absence of a core element (causal asymme-try). Finally, Figure 2 implies that the proposed con-figurations are inherently discontinuous, highlightingthe possibility of discontinuities and nonlinearitiesafforded by configuration theories (Table 1).

3. Venturing into the Messiness ofDigital Ecodynamics

Armed with the lens of configurational theoriesand their newly developed associated methodologies,how can IS researchers better examine digital ecody-namics? We attempt to create a preliminary road mapfor structuring future research that is divided intothree parts: (i) articulating research propositions anddesigns that embrace the holistic lens of configurationtheories; (ii) taking advantage of the novel structuralproperties of digital ecodynamics; and (iii) capturingthe rich, multifaceted causality of digital ecodynam-ics. Although the road map is forward looking, wealso try to rethink some past studies with the benefitof hindsight.

3.1. Articulating Research Propositions andDesigns Using Configuration Theories

The typical stance of IS strategy research studies inthe IS journals in the past 20 years has been toinvestigate the influence of IT on enhancing perfor-mance, strategic advantage, and new strategic options(cf. Sambamurthy et al. 2003, Piccoli and Ives 2005,

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to Tango842 Information Systems Research 21(4), pp. 835–848, © 2010 INFORMS

Rivard et al. 2006, Oh and Pinnsoneault 2007). How-ever, IT systems have not been viewed as simul-taneously having direct effects on enacting changesin the nature of organizational variables (such asdynamic capabilities) as well as the structural proper-ties of the environment (such as environmental turbu-lence) (or vice versa) in a systemic way. Even studiesof strategic alignment (e.g., Avison et al. 2004) thatexamine the alignment among clusters of such vari-ables do not take a holistic view. Some IS strategystudies on interorganizational systems from a net-worked perspective have flirted with the systemicnotion of co-evolution among many elements, butthey have reserved co-evolutionary systemic effects tofuture studies: “� � �a fourth intriguing research direc-tion would be to examine more specifically how net-work structure, IOS use, and competitive dynamicsco-evolve � � �” (Chi et al. 2007, p. 40). Configurationtheories are able to accommodate the holistic effectsof digital ecodynamics explicitly, but research propo-sitions and research designs must be constructed tocapture those simultaneous systemic effects in tri-adic configurations as opposed to additive two-waycorrelations, even with moderator/mediator variablesthat model the interaction effects among individualelements.The strategic management literature has also typ-

ically relegated IT systems as a moderating variable(at best) in studies of strategic advantage in turbu-lent environments. However, a study by Desarbo et al.(2005) in Strategic Management Journal that used a con-figurational approach has explicitly uncovered IT asa core element in configurations, along with environ-mental turbulence and dynamic capabilities toward astrategic performance. The study offered new insightsthat extended the widely embraced strategic typol-ogy of Miles and Snow (1978) (prospectors, defend-ers, analyzers) by developing a modified typologyand prescriptive findings. One of the those findingsshowed that IT systems are one of the core elementsof the configuration with the highest performance, inwhich all types of dynamic capabilities were well bal-anced. Although the study did not explicitly explainthe role of IT systems in creating such an effectiveconfiguration, we believe this finding implies that ITsystems do play an important role in enabling organi-zations to achieve high efficiency and high flexibility

simultaneously, thus allowing prospectors and ana-lyzers to achieve a competitive advantage in turbu-lent environments differently. Such rich insights thattouch on the notion of digital ecodynamics had notbeen revealed in previous strategic management stud-ies that ignored the holistic and systemic perspectiveenabled by configuration theories.Although they did not use second-generation con-

figurational methods and limiting themselves tocluster analysis, Malhotra et al. (2005) uncoveredfive different configurations of IT-enabled supplychain partnerships (collectors, connectors, crunch-ers, coercers, and collaborators) in turbulent envi-ronments characterized by uncertainty in customerpreferences, market demand, and competitive forces.Although the study was not designed with theidea of digital ecodynamics in mind, the researcherswere able to show that two different configurations(coercers and collaborators) were equally effectivein achieving high performance in terms of partner-enabled market knowledge creation and operationalefficiency—exhibiting the property of equifinality.However, the mechanism by which each of thesetwo equifinal configurations achieved outcomes dif-fered. Collaborators and coercers invested in part-ner interface systems—standard electronic businessinterfaces—to share information with their supplychain partners. However, coercers did not engagein joint decision making with their partners, butrather, because of power asymmetry, these (oftenlarger) firms mandated information exchange fromtheir smaller and less powerful partners. Configura-tion theories were thus able to offer richer insightsbeyond variance theories. Also, if the authors hadhad at their disposal second-generation configura-tional methods, their research propositions and anal-ysis would have been augmented, and additionalinsights about causality of digital ecodynamics wouldprobably have been deeper and richer.The study by Malhotra et al. (2005) also illustrates

the limited diversity property of configuration the-ories. The study found only five distinct configu-rations, and among them only two achieved veryhigh performance. This limited diversity that is man-ifested empirically in configurational approaches isa double-edged sword. On one hand, it has practi-cal elegance, as it focuses attention on a limited set

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to TangoInformation Systems Research 21(4), pp. 835–848, © 2010 INFORMS 843

of configurations of interest to practicing managers(Fiss 2007). Also, our overload concern (regarding thecomplexity of deciphering causal mechanisms whenthe number of configurations escalates because of thehigh number of core elements) does not often mani-fest itself empirically in digital ecodynamics. On theother hand, the possibility of unobservable higher-performing configurations through the field settingand research design of course still remains, as is typ-ically the case with variance and process theories(often termed omitted variable bias).

3.2. Taking Advantage of Novel StructuralProperties of Digital Ecodynamics

Organizational fields undergo upheavals. Shiftingindustry boundaries, new network forms, emergingsectors, and volatile ecosystems have become the stuffof everyday organizational life. Curiously, profoundchanges of this sort receive scant attention in organi-zation theory and research. Researchers acknowledgefieldwide flux, emergence, convergence, and collapse,but sidestep direct investigations of the causes anddynamic processes, leaving these efforts to political sci-entists and institutional economists. We attribute thisneglect to our field’s philosophical, theoretical, andmethodological fealty to the precepts of equilibriumand linearity. We argue that ingrained assumptionsand habituated methodologies dissuade organizationalscientists from grappling with problems to which theseideas and tools do not apply (Meyer et al. 2005, p. 456).

This quote is from a team led by a promi-nent organizational theorist (Meyer et al. 2005) whohas contributed to both studies of organizations inturbulent environments as well as configuration the-ories (Meyer et al. 1993). The quote elegantly epit-omizes the complexity of studying environmentaland organizational flux and the limits of traditionalapproaches. The challenges in the quote multiplywhen we inject IT systems into the mix, but it remainsa very apt quote for identifying and articulatingthe novel characteristics of digital ecodynamics—andthe challenges and intellectual adventures that comewith them.The manifestations of digital ecodynamics are all

around us at both the organizational and indus-try level. Burgelman and Grove (2007) have shownhow industry boundaries are systemically disruptedthrough novel digital platforms, dynamic capabilities,and opportunities in the environment. For example,

through its digital devices and technology platforms,Apple has disrupted the dynamics of the busi-ness environment and influenced the development ofdynamic capabilities in the music (iPod), smartphone(iPhone), software (App store), and publishing (iPad)industries. But it required dynamic capabilities thatenabled it to be first mover and alliance broker in amarket environment that was ready for its new prod-uct introductions. Similarly, the advent of Web 2.0technologies (c.f. Wagner and Majchrzak 2007) hasaltered the nature of interactive collaboration andintellectual capabilities, thus spawning environmen-tal turbulence in the realms of product design, mar-keting, and R&D—but that was accompanied by amindset of open innovation and global open sourc-ing. Moreover, at the organizational level, Cisco tookadvantage of the 2008 global recession and travel cut-backs to introduce telepresence technologies. Ciscoalso capitalized on its dynamic ability to spot mar-ket transitions quickly and acquire smaller companiesin that space (Chambers 2008). These examples high-light the novel and complex characteristics exhibitedby digital ecodynamics.There are three sets of these interrelated structural

properties that we will need to better understand:(i) holistic interconnectedness and mutual causal-ity, (ii) discontinuity and punctuated equilibrium, and(iii) nonlinear change and flux. Our theory build-ing and theory testing of digital ecodynamics needto be able to articulate and capture those proper-ties. As we pointed out in §2, configuration theorieskeep the research propositions and research meth-ods closely connected, so the ability of configurationalmethods to capture those theoretical properties allowsus to examine research propositions around digitalecodynamics.(i) Holistic Interconnectedeness and Mutual

Causality. Understanding digital ecodynamics in tur-bulent environments requires a different form ofsimultaneous sense-making (Bogner and Barr 2000).In addition, the complexity of mutual causalityamong the three core elements may generate emer-gent configurations for digital ecodynamics that aredifficult to predict and are based on the co-evolutionof multiple elements. This presents both a researchchallenge and an exciting research opportunity for theIS field.

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to Tango844 Information Systems Research 21(4), pp. 835–848, © 2010 INFORMS

(ii) Discontinuity and Punctuated Equilibrium.The nature of configuration theories and their com-binatorial logic are built to capture manifestationsof discontinuity and punctuated equilibrium in dig-ital ecodynamics. Moving from one configurationto another cannot be achieved by merely changingthe levels of the core elements. Such transformationrequires firms to inherently restructure the configu-ration among the three core elements of digital eco-dynamics and change the roles of the three elementssimultaneously (based on the absence/presence andcore/peripheral concepts), as illustrated in Figure 2.(iii) Nonlinear Change and Flux. In variance the-

ories, the important relationships are typically lin-ear, wherein small causes have small effects, andlarge causes have large effects. In configuration the-ories, however, there is a property of nonlinearity inwhich small triggers can cause large effects. Nonlin-ear change can also be in the forms of jolts, sweep-ing changes, and oscillations (Meyer et al. 2005). Thisopens up ways, for example, to study the impact ofthe confluence of technological discontinuities, envi-ronmental shocks, and oscillations in dynamic capa-bilities. When nonlinearities and discontinuities arepart of the fabric of digital ecodynamics, there isalways change and nonlinear flux; different configu-rations may appear and disappear over time, depend-ing on the context. This requires a different researchmindset that is much more context sensitive and lon-gitudinal and most appropriate with middle-rangetheories. Configuration theories can be complementedby process theories, particularly once the initial con-figurations have been identified. Each configurationcan then be explored using a process view to exam-ine its appearance, increasing its salience, and enhanc-ing its relevance in terms of the outcomes of interest(i.e., performance). For example, as illustrated in Fig-ure 2, a1 may start out being a high-performing con-figuration, but at some other point in time, the sameconfiguration may regress to being a low-performingconfiguration.

3.3. Capturing the Rich MultifacetedCausality of Digital Ecodynamics

The second-generation configurational methodologies(e.g., fsQCA) allow us to examine richer forms ofcausal asymmetry and variants of suppression, sub-stitution, and complementarity effects. These forms

of causality appear in field settings in which IT sys-tems are studied and in which digital ecodynamicsis already at play. Thus, it is not uncommon for ITsystems to have different causal roles depending onthe configuration. In fact, IT systems may even beless important, exchangeable, or even expendable insome configurations. For example, an ex post recon-ceptualization of Pavlou and El Sawy’s studies (2006,2010) using a configurational theory lens (Figure 2)shows how OMS is a core element in one high-performing configuration (i.e., a1) but it is absentfrom the other high-performing configuration (i.e.,a2). Similarly, Desarbo et al. (2005) found IT systemsto be an essential part of one high-performing config-uration, while possibly absent from another. A vari-ance theory approach may not have uncovered thiscausal asymmetry. The ability of second-generationconfigurational methodologies to reveal causal asym-metries would allow us to build and test more contex-tually sensitive middle-range theories that can informresearch in which digital ecodynamic contexts IT sys-tems are both core and peripheral.The combinations among the core elements of a cer-

tain configuration of digital ecodynamics are not nec-essarily complementary to each other, but they mayhave a substitutive, suppressing, or competing rela-tionship to each other. Thus, in some configurations,IT systems may even inhibit a strategic advantage.For example, cognitive inertia (Tripsas and Gavetti2000) may force firms to maintain dynamic capabili-ties that fit legacy IT systems, thus potentially lead-ing to inhibiting (low-performing) configurations thatdo not match the environment. Thus, legacy IT sys-tems may impede change (Leonardi and Barley 2008).Conversely, agile capabilities can be designed to over-come the constraints of legacy IT systems (Houghtonet al. 2004) and avoid low-performing configurations.Capturing suppression effects enlarges the range andsophistication of IS strategy research questions thatcan be explored with configuration theories.Configurational methodologies can also help design

research studies that inform controversies, such asthe infamous strawman “IT doesn’t matter” inflam-matory argument advanced by Carr (2003), whichwas initially presented as universal but it is clearlycontextual when explained through digital ecody-namics, yielding different outcomes based on dif-ferent core/peripheral elements. Anecdotal evidence

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to TangoInformation Systems Research 21(4), pp. 835–848, © 2010 INFORMS 845

shows that such configurational manifestations arenot uncommon. We are all familiar with situationswhere well-implemented and -deployed IT systems,which were meant to deliver a strategic advantage,did not—largely because of an ineffective configura-tion of IT systems, dynamic capabilities, and envi-ronmental turbulence. To give an extreme example,Cisco has been one of the leading companies in gain-ing strategic advantage from IT-enabled supply chainmanagement for many years. However, with the 2001Internet bust, the configurations of Cisco’s IT systemsand dynamic capabilities did not configure appropri-ately with the new and unprecedented environmen-tal discontinuity, thus committing to what has sincebeen known as Cisco’s $2B supply chain managementblunder (Kaihla 2002). We believe that the richness ofconfigurational methods would be more likely to cap-ture such phenomena.

4. Digital Ecodynamics as anOpportunity Creator forIS Strategy Research

Section 3 created a preliminary road map for structur-ing research on digital ecodynamics. We next reflecton the broader opportunities that digital ecodynamicscan create for IS strategy research through its holis-tic conceptualization, threesome tango, and accom-panying second-generation configurational methods.We show how this new phenomenon can open theway for novel forms of theory building and theorytesting for IS strategy research as well as provide abridge between theory and practice. We then high-light the double-barreled opportunity that digital eco-dynamics offers as an energizing vision for IS strategyresearch, as well as a reshaper of strategic manage-ment research in a turbulent and digital world.

4.1. Beyond Newtonian Theory Structures inIS Strategy Research

“You cannot observe a quark using Newtonianphysics” is a quote attributed to the famous NobelPrize-winning physicist Niels Bohr, who did muchwork on quantum physics that helped transform thecentral organizing vision of physics beyond Newton’sparadigm. Accordingly, IS strategy research may bemissing many crucial phenomena around digital

ecodynamics by using theory structures and method-ologies that are more suitable for a neat linear worldwith separable variables and invariant unifinal rela-tionships. We hope that we have shown here thatadvanced configuration theories may offer a usefulcomplement to variance and process theories in cap-turing the complexity of digital ecodynamics. Thisdoes not in any way take away the value and con-tributions that variance theories and process theo-ries have and will continue to have on IS strategyresearch; rather it highlights emerging new forms ofinquiring systems that may help capture the morecomplex nuances of digital ecodynamics.The ability to advance configuration theories of dig-

ital ecodynamics will also depend on advancementsin developing accompanying methodologies for oper-ationalizing elements, designing data collection, andperforming data analysis. Fiss (2010) and Ragin (2008)show that fsQCA helps open the black box of con-figurations, explores the fused interactions amongelements, and uncovers rich, multifaceted causali-ties. The example in Figure 2 illustrates fsQCA fordigital ecodynamics. However, more methodologicalresearch is needed. For example, there are still unre-solved fidelity issues around calibration and measure-ment (Ragin 2008). Also, it may also take a mind shiftand a learning effort for researchers who are still nat-urally ingrained in variance and process theories toemploy a configurational lens in theory building andtesting. Thinking holistically in terms of configura-tions and fuzzy sets takes cognitive effort that seemsunnatural at first, and much more work is needed toeducate researchers. However, this is an opportunityfor advancing new theory structures in IS strategyresearch that we believe that cannot afford to wait.We highlighted the key properties of the second-

generation configurational methodologies that aim toopen the black box of digital ecodynamics. However,there can be other complex variants of holistic modelsof reality from other disciplines that can be used forstudying digital ecodynamics. Some of these variantsespouse models that are centered around recursivedynamic flows of flux and transformation or that dis-tinguish between the domain of possibilities and thedomain of manifestations or instances (Bohm 1980).As elegant and inspiring as they may be, they are dif-ficult to operationalize in both the realm of strategic

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management research (Morgan 2006) and the contextof IS research (El Sawy 2003). Nonetheless, it is clearthat there will be many new models and researchmethodologies yet to be examined, which may alsohelp advance IS strategy research in exploring digitalecodynamics.

4.2. Digital Ecodynamics as Bridge BetweenResearch and Practice

The configurational approach to digital ecodynamicscan also help transform managerial thinking. Giventheir apparent complexity, the proposed configura-tions of digital ecodynamics can be viewed on onehand as combinations that lead to strategic advan-tage. A complex configuration among multiple ele-ments is difficult to be imitated or substituted bycompetitors, thus making such an effective configu-ration a key source of a sustainable advantage. Onthe other hand, the concept of equifinality allowscompetitors to take advantage of alternative config-urations that use resources, assets, and capabilitiesthat are unique to them to attain similar perfor-mance outcomes. Thus, equifinal configurations maybe seen as digital ecodynamic options, and managerscan explore how to leverage their own unique andidiosyncratic assets to craft a different configurationthat differentially achieves strategic advantage. There-fore, the threesome tango of digital ecodynamic con-figurations multiplies the number of strategic optionsthat organizations have. However, moving from oneconfiguration to another may require a structuralchange with different combinations among elements,and it may be more than simply changing the valuesof the core elements.The configurational approach to digital ecodynam-

ics with its managerial appeal further helps dis-solve the boundary between practice and research.Notably, he limited diversity property suggests onlya few realistic configurations for strategic advan-tage. This lessens the cognitive overload on man-agers and makes them more likely to interact withacademic researchers. The elements of environmen-tal turbulence, dynamic capabilities, and IT systems(see Online Appendix A) permit managers to com-bine different elements to arrive at alternative con-figurations for their organization that may be equallyhigh performing. At the same time, managers must

be aware that not all possible combinations of the ele-ments are feasible in reality or they are optimal froma performance viewpoint. Therefore, among the lim-ited number of feasible configurations, organizationscan transform themselves toward a high-performingconfiguration that requires minimum costs and risks.Having such alternative configurations is attractivefor practice.Configurational approaches can help managers bet-

ter answer the elusive question of what IT sys-tems to invest in based on environmentally suitabledynamic capabilities they want to pursue. Configura-tional methods sensitize managers that IT systems canbe multiconfigurational platforms; i.e., similar IT sys-tems can enable the development of different dynamiccapabilities to suit different dimensions of environ-mental turbulence. A configurational lens alerts man-agers to recognize that IT systems can themselvesbe a source of environmental turbulence (rather thanbe reactive to environmental turbulence). IT systemscan be leveraged to negate the dominant logic of anindustry and create a new dominant logic, and createturbulence for the industry as a whole. Even on thesupply side of IT systems, the world of practice is wellaware of the havoc that IT can trigger. IT industryanalysts have identified the alarming increased frag-mentation of the standardized Internet due to a multi-tude of proprietary technology platforms and formats(such as the proliferation of mobile device operatingsystems) and walled communities that do not allowaccess for search engines (online social networkingsites such as Facebook). Thus, the role of IT systemscan be influential in achieving high-performing con-figurations of digital ecodynamics.

4.3. Digital Ecodynamics as an EnergizingVision for IS Strategy Research

The triadic configurational view of digital eco-dynamics provides a double-barreled opportunity forIS strategy scholars to influence emerging research instrategic management. First, it brings IT systems tothe foreground of the strategic management paradigmmix by proposing IT systems as a core element.Second, it helps spread the diffusion of systemicapproaches through configuration theories. Thus, wepredict that theory structures that embrace a sys-temic lens will be well received by IS scholars. We

El Sawy et al.: Research Commentary: Seeking the Configurations of Digital Ecodynamics: It Takes Three to TangoInformation Systems Research 21(4), pp. 835–848, © 2010 INFORMS 847

believe that such a breakthrough development willalter the nature of strategic management research aswe move deeper into the world of complex digitalecosystems and disruptive technological innovations.This can provide new excitement in existing IS strat-egy research and bolster the centrality of IS research inbusiness schools. We believe that IS strategy scholarshave a unique opportunity to compose the music andset the tempo for the digital ecodynamics tango—aslong as they do not underplay the role of environ-mental turbulence and do not view IT systems as aperipheral element in triadic configurations.In conclusion, we have identified digital eco-

dynamics as a systemic phenomenon based on theweb of complex interactions among the triad of envi-ronmental turbulence, dynamic capabilities, and ITsystems. We have shown a configurational approachas an apt paradigmatic lens to understand digital eco-dynamics. However, we believe that the implicationsof the proposed “threesome tango” go beyond merelyidentifying effective configurations: the tango spawnsa fused transformational view of IT systems and pro-vides an energizing vision for transforming researchon digital business strategy. It captures the fusionof IT systems with the dynamics of organizationsand the unrest of the environment in a way that iswell suited to a world of increased digital intensityin industry after industry—financial services, retail,travel, entertainment, healthcare, energy—thus trans-forming the way that organizations function, com-pete, thrive, and innovate. Business Week’s 2010 list ofthe Top 50 innovative organizations shows more thanhalf of them to be in the digital space and part of thegrowing supply side of the growing digital ecosys-tem. The digital revolution that became most appar-ent with the Internet boom-bust in the late 1990s isfinally taking hold in a transformational way across alarge number of organizations and industries. WhenIT becomes part of the fabric of organizations andentire industries, the perspective of digital ecodynam-ics becomes an organizing vision for digital businessstrategy. This opens up an exciting energizing visionfor IS strategy research in the years ahead. With ITsystems as a core element for understanding configu-rations of digital ecodynamics, our basic speculationis that theories on gaining a strategic advantage inturbulent environments will be most potent when IT

systems are explicitly included as a core concept intheorizing. Conversely, organizations seeking to gaina strategic advantage will find it futile to competein a digital world by ignoring IT systems. Ultimatelythis commentary seeks to promote a configurationalapproach to digital ecodynamics as a critical areafor the IS strategy and strategic management fields.Tango anyone?

AcknowledgmentsThe authors thank Editor-in-Chief V. Sambamurthy andthe three reviewers for their most helpful suggestions forimproving the paper. The authors also thank Peer Fiss forhis very helpful comments.

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