The effects of employee competencies and IT applications on operations strategy: an empirical study of retail firms in China

The purpose of this paper is to investigate the relationships between employee competencies, information technology (IT) applications, operations strategy, and business performance.

Drawing upon the resource‐based theory, this study employs a path analytic framework to investigate how employee competencies and IT applications influence the development of competitive operations strategies and business performance for a sample of retail firms in China.

The findings indicate significant and positive relationships between employee competencies and operations strategy (e.g. low cost, quality and flexibility). IT applications also play a vital role in helping retailers pursue a flexibility strategy. The operations strategies of low cost and flexibility in turn influence business performance.

This study seems to be the first in investigating the impacts of employee competencies and IT applications on operations strategy and performance in the service sector, especially in the Chinese context.