Information Technology Governance in Information Technology Investment Decision Processes: The Impact of Investment Characteristics, External Environment, and Internal Context

This study identifies governance patterns for information technology investment decision processes and explores the impact of organizations' investment characteristics, external environment, and internal context on the shaping of those patterns. By identifying the lead actors of the initiation, development, and approval stages in IT governance, the patterns of 57 IT investment decisions at 6 hospitals are analyzed. The results reveal seven IT governance archetypes: (1) top management monarchy, (2) top management-IT duopoly, (3) IT monarchy, (4) administration monarchy, (5) administration- IT duopoly, (6) professional monarchy, and (7) professional- IT duopoly. Each archetype is analyzed by taking into account four specific factors: IT investment level, external influence, organizational centralization, and IT function power. This study makes several contributions to IT governance theory and practice. First, IT governance is reframed to include pre-decision stages, highlighting the importance of participants other than the final decision maker. Second, the variation of IT governance archetypes suggests that even when top management approval is required, the IT department may not play a key role in the IT investment decision process. Third, governance of the pre-decision initiation and development stages is found to be jointly affected by several contextual factors, suggesting that the allocation of final decision rights is only a part of IT governance. While decision rights may be allocated by the organization a priori, the actual patterns of IT governance are contingent on contextual factors. It is important to understand how IT governance archetypes are shaped because they may affect desired outcomes of IT investments.

[1]  B. Loasby.  The External Control of Organizations. A Resource Dependence Perspective , 1979 .

[2]  David B. Jemison.  Organizational versus environmental sources of influence in strategic decision making , 1981 .

[3]  Carol V. Brown,et al.  Reconceptualizing the Context-Design Issue for the Information Systems Function , 1998 .

[4]  Mike W. Peng.  Institutional Transitions and Strategic Choices , 2003 .

[5]  David C. Wilson,et al.  Top Decisions: Strategic Decision-Making in Organizations. , 1987 .

[6]  Henry C. Lucas,et al.  Plant Management, the Locus of Decision Making, and the Information Services Department , 1987, J. Manag. Inf. Syst..

[7]  Vijay Sethi,et al.  Rationality in Strategic Information Technology Decisions: The Impact of Shared Domain Knowledge and IT Unit Structure , 2002, Decis. Sci..

[8]  Carol V. Brown.  Examining the Emergence of Hybrid IS Governance Solutions: Evidence From a Single Case Site , 1997, Inf. Syst. Res..

[9]  John M. Ivancevich,et al.  A BEHAVIORAL STUDY OF NURSES, SUPERVISORS, AND DIAGNOSTICIANS IN A HOSPITAL SETTING , 1978 .

[10]  Mark J. Zbaracki,et al.  Strategic decision making , 1992 .

[11]  J. March.  The Business Firm as a Political Coalition , 1962, The Journal of Politics.

[12]  T. Davenport.  Putting the enterprise into the enterprise system. , 1998, Harvard business review.

[13]  Colin F. Camerer,et al.  Taking Risks: The Management of Uncertainty , 1988 .

[14]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[15]  J. L. Bower.  Managing the resource allocation process: A study of corporate planning and investment , 1970 .

[16]  Zahir Irani,et al.  Developing a frame of reference for ex-ante IT/IS investment evaluation , 2002, Eur. J. Inf. Syst..

[17]  David Miller.  Strategy Making and Structure: Analysis and Implications for Performance , 1987 .

[18]  Johan P. Olsen,et al.  Ambiguity and choice in organizations , 1976 .

[19]  Yadong Luo,et al.  Guanxi and organizational dynamics: organizational networking in Chinese firms , 2001 .

[20]  Brian P. Bloomfield,et al.  INFORMATION TECHNOLOGY, CONTROL AND POWER: THE CENTRALIZATION AND DECENTRALIZATION DEBATE REVISITED* , 1992 .

[21]  Henry C. Lucas,et al.  Organizational power and the information services department , 1984, CACM.

[22]  Jorge Stein,et al.  Strategic Decision Methods , 1981 .

[23]  Michael J. Earl,et al.  Management Strategies for Information Technology , 1989 .

[24]  Andrew J. Flanagin.  Social pressures on organizational website adoption , 2000 .

[25]  Robert W. Ackerman,et al.  Influence of Integration and Diversity on the Investment Process , 1970 .

[26]  J. Morse.  Qualitative data analysis (2nd ed): Mathew B. Miles and A. Michael Huberman. Thousand Oaks, CA: Sage Publications, 1994. Price: $65.00 hardback, $32.00 paperback. 238 pp , 1996 .

[27]  Rajiv Kohli,et al.  Performance Impacts of Information Technology: Is Actual Usage the Missing Link? , 2003, Manag. Sci..

[28]  Carol V. Brown.  Horizontal Mechanisms Under Differing IS Organization Contexts , 1999, MIS Q..

[29]  H. Ansoff.  Corporate strategy : an analytic approach to business policy for growth and expansion , 1965 .

[30]  Blake Ives,et al.  Executive Involvement and Participation in the Management of Information Technology , 1991, MIS Q..

[31]  Brian S. Butler,et al.  Power and Information Technology Research: A Metatriangulation Review , 2002, MIS Q..

[32]  Joseph L. Bower,et al.  From resource allocation to strategy , 2005 .

[33]  J. Fredrickson.  The Strategic Decision Process and Organizational Structure , 1986 .

[34]  M. Lynne Markus,et al.  Power, politics, and MIS implementation , 1987, CACM.

[35]  G. Huber,et al.  Retrospective reports of strategic‐level managers: Guidelines for increasing their accuracy , 1985 .

[36]  W. G. Astley,et al.  Structural Sources of Intraorganizational: Power: A Theoretical Synthesis , 1984 .

[37]  Jacob Cohen.  A Coefficient of Agreement for Nominal Scales , 1960 .

[38]  Gordon B. Davis,et al.  A Framework for Research in Computer-Based Management Information Systems , 1980 .

[39]  Richard Baskerville,et al.  Generalizing Generalizability in Information Systems Research , 2003, Inf. Syst. Res..

[40]  E. Carter.  The Behavioral Theory of the Firm and Top-Level Corporate Decisions , 1971 .

[41]  Robert A. Burgelman.  A Model of the Interaction of Strategic Behavior, Corporate Context, and the Concept of Strategy , 1983 .

[42]  SambamurthyV.,et al.  Information Technology Assimilation in Firms , 1999 .

[43]  Michael Parent,et al.  Mimetic Isomorphism and Technology Evaluation: Does Imitation Transcend Judgment? , 2002, J. Assoc. Inf. Syst..

[44]  E. Johnsen.  Richard M. Cyert & James G. March, A Behavioral Theory of The Firm, Prentice-Hall, Inc., Englewood Cliffs, New Jersey, 1963, 332 s. , 1964 .

[45]  L. Diamond.  IT Governance : How Top Performers Manage IT Decision Rights for Superior Results , 2005 .

[46]  Robert W. Zmud,et al.  Arrangements for Information Technology Governance: A Theory of Multiple Contingencies , 1999, MIS Q..

[47]  J. Turner,et al.  Developing Strategic Information Systems , 1984 .

[48]  W. Powell,et al.  The iron cage revisited institutional isomorphism and collective rationality in organizational fields , 1983 .

[49]  H. Simon,et al.  From substantive to procedural rationality , 1976 .

[50]  Samar Mouakket,et al.  Varieties of Political Process During Systems Development , 1997, Inf. Syst. Res..

[51]  Mike W. Peng,et al.  Managerial Ties and Firm Performance in a Transition Economy: The Nature of a Micro-Macro Link , 2000 .

[52]  J. Pfeffer,et al.  Organizational Decision Making as a Political Process: The Case of a UniversityBudget. , 1974 .

[53]  A. Pettigrew.  The politics of organizational decision-making , 1973 .

[54]  L. J. Bourgeois,et al.  Strategic Management and Determinism , 1984 .

[55]  Neil C. Ramiller,et al.  The Organizing Vision in Information Systems Innovation , 1997 .

[56]  Sanjay Gosain,et al.  Enterprise Information Systems as Objects and Carriers of Institutional Forces: The New Iron Cage? , 2004, J. Assoc. Inf. Syst..

[57]  Kenneth R. MacCrimmon,et al.  Taking Risks, the Management of Uncertainty , 1987 .

[58]  Peter Weill,et al.  Don't Just Lead, Govern: How Top-Performing Firms Govern IT , 2004, MIS Q. Executive.

[59]  Izak Benbasat,et al.  Predicting Intention to Adopt Interorganizational Linkages: An Institutional Perspective , 2003, MIS Q..

[60]  W. R. King,et al.  Decision Processes for Developing Strategic Applications of Information Systems: A Contingency Approach* , 1992 .

[61]  J. Schull.  The vice president , 1974 .

[62]  Varun Grover,et al.  Using information and information technology for sustainable competitive advantage: Some empirical evidence , 1989, Inf. Manag..

[63]  Mark P. Sharfman,et al.  Does Decision Process Matter? A Study Of Strategic Decision-making Effectiveness , 1996 .

[64]  E. Burton Swanson,et al.  Innovating Mindfully with Information Technology , 2004, MIS Q..

[65]  Philip Smith.  Roger Bakeman John M. Gottman , 1987, Animal Behaviour.

[66]  John W. Meyer,et al.  Institutionalized Organizations: Formal Structure as Myth and Ceremony , 1977, American Journal of Sociology.

[67]  Peter Weill,et al.  Managing Investment in Information Technology: Mini Case Examples and Implications , 1989, MIS Q..

[68]  Beverly B. Tyler,et al.  Strategic decision models: Integrating different perspectives , 1991 .

[69]  Rajiv Sabherwal,et al.  An Empirical Taxonomy of the Decision-Making Processes Concerning Strategic Applications of Information Systems , 1995, J. Manag. Inf. Syst..

[70]  James D. Thompson.  Organizations in Action , 1967 .

[71]  M. Venkatraman.  It-enabled business transformation: from automation to business scope redefinition , 1994 .

[72]  Henry Mintzberg,et al.  The Structure of "Unstructured" Decision Processes , 1976 .

[73]  Albert Boonstra,et al.  Structure and analysis of IS decision-making processes , 2003, Eur. J. Inf. Syst..

[74]  Albert L. Lederer,et al.  Changing information technology and information technology management , 1997, Inf. Manag..

[75]  Vallabh Sambamurthy,et al.  Shaping UP for E-Commerce: Institutional Enablers of the Organizational Assimliation of Web Technologies , 2002, MIS Q..

[76]  Carol Saunders,et al.  Management Information Systems, Communications, and Departmental Power: An Integrative Model , 1981 .

[77]  K. Eisenhardt,et al.  Strategic decision processes in high velocity environments: four cases in the microcomputer industry , 1988 .

[78]  Carol V. Brown,et al.  Alignment of the IS Functions With the Enterprise: Toward a Model of Antecedents , 1994, MIS Q..

[79]  V. Sambamurthy,et al.  Information Technology Assimilation in Firms: The Influence of Senior Leadership and IT Infrastructures , 1999, Inf. Syst. Res..

[80]  Albert L. Lederer,et al.  Rapid Information Technology Change, Coping Mechanisms, and the Emerging Technologies Group , 2001, J. Manag. Inf. Syst..

[81]  Carol V. Brown,et al.  Building Change-Readiness Capabilities in the IS Organization: Insights From the Bell Atlantic Experience , 1997, MIS Q..

[82]  A. Michael Huberman,et al.  An expanded sourcebook qualitative data analysis , 1994 .

[83]  Moshe Zviran,et al.  Factors Affecting the Policy for Distributing Computing Resources , 1989, MIS Q..

[84]  Qing Hu,et al.  Assimilation of Enterprise Systems: The Effect of Institutional Pressures and the Mediating Role of Top Management , 2007, MIS Q..

[85]  Henry Mintzberg.  Strategy-Making in Three Modes , 1973 .

[86]  DevarajSarv,et al.  Performance Impacts of Information Technology , 2003 .