Abstract

According to the latest forecast by Gartner, Inc, worldwide IT spending is projected to total $5.1 trillion in 2024, an increase of 8% from 2023. With growing spending in IT during the past few decades, demonstrating the effects of such investment on organizational performance has taken significant attention and interests in the IS literature. Enormous studies in the business value of information technology (BVIT) have found that IT investments together with other organizational resources can directly and/or indirectly enhance firm performance (Arora and Rahman, 2016). Underlying those studies is an “investment follow value” view in which rational managers would budget IT spending based on the business values IT investment potentially generates. However, it is evident that neither is organizational performance the only driver for firm’s IT spending, nor managers are rational in their capital budgeting decision (Kobelsky, Richardson, Smith, & Zmud, 2008; Wang, Zheng and Zhang, 2023; Kida, Moreno, & Smith, 2001). Echoing recent call from strategy research for consideration of human affective nature in decision making (De Keyser, Guiette, & Vandenbempt, 2021), this paper intends to examine the possible influence of management emotion on the level of firms’ IT budget. Our research question is: Will the level of firms’ IT budget be affected by management emotion and how? Based on the Behavioral Theory of the Firm (BTOF), we posit that managers’ emotion can change their “aspiration level” that will drive them to engage in different levels of IT budget. With combined data sources, this research attempts to empirically test the role of management emotion in firms’ IT budget. The findings of this paper will provide insights of the under-researched human affective antecedent of firms’ IT budget in IS literature (Anand, Sharma, and Kohli, 2020).

Paper Number

tpp1407

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