Affiliated Organization

Proceedings of JAIS Theory Development Workshop


This paper presents a theory based model that proposes and explains the positive impact of IT governance on the business performance of the firm. The study takes the resource based perspective and integrates the economic theory of complementarities, the concept of resource relatedness as well as the knowledge based view. The proposed increase of business performance is grounded in the generation of sustainable competitive advantage through super-additive value synergies, which are considered as being hard to copy by competitors. The theoretical model is developed and substantiated in two stages. During the first stage, eleven exploratory case studies of major multinational corporations were used for theory building. During the second stage, eight case studies with comparable companies were conducted for theory refinement and substantiation. The results suggest that IT governance is positively related to business performance through the mediators IT relatedness and business process relatedness. It is argued that the latter two are complementary in the sense that they do not only increase business performance independently, but add extra value if available concurrently. The results furthermore imply that the absorptive capacity of the IT department has a significant moderating effect.