Navigating the Storm: Toward a Theory of IT Portfolio Diversity, Leadership Power, and Organizational Resilience to Major Shocks

Contemporary firms face an environment marked by major shocks, which are characterized by economic stagnation, mounting debt burdens, rapid technological disruption, profound geopolitical volatility, and escalating environmental crises. Under these circumstances, organizational resilience to major shocks (ORMS) is critical for firms to mitigate disruptions and thrive in turbulent environments. Although information technology (IT) resources are increasingly recognized as vital for building resilience, theoretical insights into how firms strategically leverage IT diversity and leadership structures to enhance ORMS remain limited. Grounded in the strategic flexibility framework, this study investigates how IT portfolio diversity (ITPD), structural power of IT leaders (SPT), and crisis-induced industry turbulence (CTU) interact to shape ORMS. We conceptualize ITPD as the variety of IT resources a firm possesses and SPT as the formal authority of IT leaders to orchestrate cross-functional coordination. Drawing on a firm-level data set before, during, and after the acute phase of the COVID-19 pandemic, we address three research questions: (1) How does ITPD affect ORMS? (2) How do ITPD and SPT jointly influence ORMS? (3) How do adverse CTU (ACTU) and beneficial CTU (BCTU) moderate these effects? Our analyses reveal an inverted U-shaped relationship between ITPD and ORMS, indicating that whereas moderate IT diversity enhances resilience, excessive diversity incurs coordination costs that undermine it. This curvilinear effect is temporally contingent, peaking during the crisis. SPT positively moderates this relationship by shifting the turning point, enabling firms to harness greater ITPD benefits. Further, industry turbulence differentially moderates these dynamics: ACTU amplifies the inverted U-shaped effect by steepening the curve and shifting the turning point, whereas BCTU flattens the curve without altering its peak. These findings advance the strategic flexibility framework, information systems, and organizational resilience literatures, showing how contextual timing, IT resource diversity, leadership power, and industry conditions interactively shape organizational resilience.