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Communications of the Association for Information Systems

Abstract

Information technology (IT) represents a large portion of an organization’s investments. Prior research has identified the linkage between IT investment and productivity. Numerous factors affect the value an organization can derive from its IT investment. However, extant literature has insufficiently studied IT governance’s impact on IT’s business value. In this study, we help to fill this gap by investigating the effects of IT decision making structure mechanisms and senior management’s IT governance involvement on the relationship between IT investment and organizational performance. This study builds on a novel framework that integrates two theories on IT in an organizational setting: strategic choice theory and contingency theory. We pool organization-level IT investment and IT governance practice data with other organization characteristics to investigate the moderating effects of IT governance practices. The empirical analyses reveal a positive moderating effect of IT decision marking structure mechanisms on the IT investment–organization performance relationship. Nevertheless, the results indicate that senior management’s IT involvement has no significant effect on this relationship. This study shows the importance of IT governance for organizations to effectively leverage their IT investment.

DOI

10.17705/1CAIS.04426

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