Abstract

Given that information technology (IT) is fundamental to a firm’s survival and growth, firms face the critical challenge of integrating, building, and reconfiguring IT resources so as to obtain competitive advantage and superior performance. One major research stream explores methods of organizing internal IT resources to align them with enterprises. Another major research stream examines methods of managing external IT resources through outsourcing. Many of IT research have separately focused on the effects of internal and external IT resource control mechanisms. However, few studies investigated the alignment between internal and external IT control mechanisms. Therefore, this research-in-progress study aims to explore whether firms with a good fit between their internal and external IT control mechanisms are expected to have better firm performance. Based on extended resource-based view, we use mainly three internal IT control mechanisms (i.e., centralized, decentralized, and hybrid) and three external IT control mechanisms (i.e., independent, arm’s-length, and embedded). Results will show that each alignment between internal and external IT control mechanisms can be used to create different theoretical arguments that explain how IT control mechanisms for IT resource allocation are managed in terms of intra- and inter-firm perspectives. This study will also show the most acceptable alignment between internal and external IT control mechanisms on three dimensional firm performances (i.e., operational, market, and innovation performance).

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