The Effect of Board of Directors’ IT Awareness on CIO Compensation and Firm Performance

Chief information officers (CIOs) play increasingly strategic roles in firms in this competitive global economy, which is now largely powered by information technology (IT). However, research has shown a lack of board of directors’ oversight on CIO‐ and IT‐related issues. Drawing on agency, resource dependence, and alignment theories, we investigate the effect of board of directors’ IT awareness on CIO compensation structure and firm performance. We conduct cross‐sectional time series analyses of data collected from various sources. Our study underlines three important findings. First, we show that some commonly known executive compensation determinants, such as individual characteristics and governance structure, do not have significant effects on CIO compensation structure. Second, with regard to CIO compensation structure, firms respond to increasing information asymmetry differently according to the level of IT awareness of their boards. Finally, firms perform better when their boards have higher levels of IT awareness, and this positive effect of IT awareness is considerably larger in IT intensive industries. Overall, our study provides empirical support for the important role of boards’ IT awareness in shaping CIO compensation and improving firm performance. Our results suggest that boards with functional area knowledge—or higher IT awareness in this case—can more effectively monitor and better incentivize executives, and consequently lead to better firm performance.     

Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non‐IT Resources*

Drawing on the resource‐based view, we propose a configurational perspective of how information technology (IT) assets and capabilities affect firm performance. Our premise is that IT assets and IT managerial capabilities are components in organizational design, and as such, their impact can only be understood by taking into consideration the interactions between those IT assets and capabilities and other non‐IT components. We develop and test a model that assesses the impact of explicit and tacit IT resources by examining their interactions with two non‐IT resources (open communication and business work practices). Our analysis of data collected from a sample of firms in the third‐party logistics industry supports the proposed configurational perspective, showing that IT resources can either enhance (complement) or suppress (by substituting for) the effects of non‐IT resources on process performance. More specifically, we find evidence of complementarities between shared business–IT knowledge and business work practice and between the scope of IT applications and an open communication culture in affecting the performance of the customer‐service process; but there is evidence of substitutability between shared knowledge and open communications. For decision making, our results reinforce the need to account for all dimensions of possible interaction between IT and non‐IT resources when evaluating IT investments.     

Examining the Antecedents and Consequences of CIO Strategic Decision‐Making Authority: An Empirical Study*

Despite the strategic importance of information technology (IT) to contemporary firms, chief information officers (CIO) often still have varying degrees of strategic decision‐making authority. In this study, we apply the theory of managerial discretion to define CIO strategic decision‐making authority and argue that the CIO's level of strategic decision‐making authority directly influences IT's contribution to organization performance. We also draw on the power and politics perspective in the strategic decision‐making literature to identify the direct antecedents to the CIO's strategic decision‐making authority. A theoretical model is presented and empirically tested using survey data collected from a cross‐industry sample of 174 matched pairs of CIOs and top business executives through structural equation modeling. The results suggest that organizational climate, organizational support for IT, the CIO's structural power, the CIO's level of strategic effectiveness, and a strong partnership between the CIO and top management team directly influence the CIO's level of strategic decision‐making authority within the organization. The results also suggest that the CIO's strategic decision‐making authority in the organization directly influences the contribution of IT to firm performance and that effective CIOs have a greater influence on IT's contribution when provided with strategic decision‐making authority.     

An Analysis of Strategic Determinants,Learning and Decision‐Making in Sino‐British Joint Ventures

This paper examines how partners’ strategic objectives, inputs and competencies affect the learning they achieve in joint ventures and their ability to influence decision‐making in such ventures. Quantitative and qualitative research in 20 Sino‐British joint ventures permits an investigation of these factors for both British and Chinese joint venture partners. Findings indicate that the transfer by British partners of technology and managerial expertise to joint ventures enhances their ability to achieve their strategic objectives by influencing decisions in such ventures. The learning achieved by British partners depends on their commitment of strategic inputs to joint ventures and is therefore associated with their influence. The case of Chinese partners is different, because they look to learn from the knowledge and resource inputs provided by the British partners. They therefore rely more on legal ownership rights to retain an influence over joint venture decision‐making. The achievement of Chinese partners’ strategic objectives depends more critically on the quality of the partnership itself.     

Environmental Factors,Managerial Processes,and Information Technology Investment Strategies

Although significant research attention has been directed at understanding the value of information technology (IT) investments for firms, very little attention has been paid to understand the IT investment behavior of firms. This article seeks to fill this void. We introduce the concept of IT investment strategy, defined by dimensions of intensity and proactiveness, to characterize the IT investment behavior of firms. Synthesizing the environmental deterministic and strategic choice perspectives of a firm's strategic decision making, we examine the effects of environmental factors, managerial processes, and the interplay between them on IT investment strategy. Specifically, we examine the impact of environmental factors such as industry clockspeed and information intensity on IT investment strategy. We also incorporate the strategic choice perspective to argue that managerial processes such as frequent chief executive officer—chief information officer communications and collective information systems planning play a critical role in shaping the firm's IT investment strategy. The empirical results show that the environmental variables are related to IT investment strategy. Besides, managerial processes serve as a means to understand the environment and thus moderate the relationships between the environmental variables and the various facets of IT investment strategy. The conceptualization of IT investment strategy and the focus on both environmental determinism and strategic choice should enrich our understanding of firms’ IT investing behavior.     

Process matters – How strategic decision-making process characteristics impact capital allocation efficiency

We employ strategic decision-making process theory to study the internal capital markets of firms and argue that varying allocation efficiency can result from the configuration of the capital allocation decision-making process. Learning from earlier research on firms' portfolio allocations, we also develop assumptions on interaction effects with firm-level unrelated diversification and environmental dynamics. We test our hypotheses with structural equation modeling on an international sample of large multi-business firms. Our results suggest that process formalization and analytical comprehensiveness have a positive influence on the efficiency of allocation decisions. Another key result is that unrelated diversified portfolios positively moderate the influence of analytical comprehensiveness and formalization, while dynamic environments negatively impact the influence of formal processes but reward managerial involvement.     

基于企业属性的IT价值多维度研究

目前,业界对于IT为企业所带来的战略价值持有两种观点,一种观点认为,IT已经成为基础设施,是企业的一种纯技术工具,将不再为企业带来竞争优势,企业对于IT只需进行风险管理；另一种观点则认为IT仍然具有战略价值,对于提升企业竞争力仍具有推动作用。本文从组织管理的角度审视IT价值,结合企业特定的内部条件和外部环境探讨了IT带给企业的差异性,从行业、规模、组织结构、管理流程以及企业文化五个企业属性维度分析了IT对企业具有的不同战略价值,认为IT仍然是企业未来发展和提升竞争力的核心动力之一。     

Systems Collaboration and Strategic Collaboration: Their Impacts on Supply Chain Responsiveness and Market Performance*

Recognizing the importance of interfirm collaboration and recent advancement of information technology (IT) to enhance joint decision making between firms, this study conceptualizes systems collaboration and strategic collaboration as two essential types of interfirm collaboration. The study then simultaneously examines the multiple roles of systems collaboration and strategic collaboration, and how they directly and indirectly influence a firm's supply chain responsiveness and market performance. Hypotheses are tested on survey data collected from 184 firms. Results suggest that the sequential relationships among IT competency, interfirm collaboration, and supply chain responsiveness have significant market performance implications.     

Market Impact on IT Security Spending

Traditionally, IT security investment decisions are made in isolation. However, as firms that compete for customers in an industry are closely interlinked, a macro perspective is needed in analyzing these decisions. We utilize the notions of direct‐ and cross‐risk elasticity to describe the customer response to adverse IT security events in the firm and competitor, respectively, thus allowing us to analyze optimal security investment decisions. Examining both symmetric and asymmetric duopoly cases using a continuous‐time Markov chain (CTMC) model, we demonstrate that optimal IT security spending, expected firm profits and willingness of firms to cooperate on security improvements are highly dependent on the nature of customer response to adverse events. We also examine the investment problem when security attacks on different firms are correlated.     

Strategic Community Management with Customers: Case Study on Innovation Using IT and Multimedia Technology in Education, Medical and Welfare Fields

This paper discusses the management processes for forming strategic communities by means of strategic partnerships between businesses and customers, for introducing into the Strategic communities the knowledge of customers with a high degree of learning experience with respect to the products and services provided by the businesses, thereby creating new business models and at the same time extending the results of the strategic communities to many other associated customers. Innovations in the fields of education, medicine and welfare utilizing IT and multimedia technology over the past four years are taken as examples in this case study. Here a strategic community of business and innovative customers has established a new business model in the fields of education, medicine and welfare on the basis of IT and multimedia technology. The results of the activities of the strategic community of innovative customers were then extended to many other related customers in a chain of community creation, and the new systems were widely proliferated throughout Japan. This revised version was published online in July 2006 with corrections to the Cover Date.     

The Role of Task Uncertainty in IT Project Team Advice Networks

Advice seeking is often the most critical success factor in today's IT project teams. To understand how advice seekers are motivated, we integrate the antecedents of advice seeking—as defined by network theory (Granovetter, 1983)—into a cost/benefit model based on expectancy theory (Vroom, 1964). To contribute to the research on advice network formation, we integrate the role of task uncertainty—one of the defining characteristics of IT projects—into that research (Wallace & Keil, 2004). Based on a controlled quasi‐experiment, this study demonstrates that when task uncertainty is low, individuals with attractive personalities and similar demographics will be sought out for advice more frequently, regardless of their knowledge and resources (i.e., the benefits to the advice seekers). However, when task uncertainty is high, individuals with greater knowledge and access to resources are sought out more often in an advice network. These results provide clarity to prior research that has found mixed results concerning the effectiveness of the traditional antecedents to advice seeking (e.g., knowledge, power, and transactive memory) (e.g., Xu, Kim, & Kankanhalli, 2010a). In addition, project managers may choose to alter their team structure in order to optimize the advice network based on the anticipated level of IT project risk or task uncertainty.     

The complementary effects of rationality and intuition on strategic decision quality

Rationality and intuition are important dimensions of the strategic decision process. Prior studies have viewed these as distinct dimensions, providing limited insights for our understanding of strategic decision processes. Drawing on the dual process theory and research on process capability, this study examines the interplay between rationality and intuition based on a sample of 103 strategic decisions made by service firms in Greece. The results suggest that combining rationality and intuition at the same time leads to successful strategic decisions. Also, the moderating role of environmental dynamism was investigated. We found that in dynamic settings, decision-making teams which combine rationality and intuition outperform teams which use rationality or intuition separately. The implications of these findings for theory and practice are important and are analysed in the paper.     

The relationship between organizational value sharing and influence over strategic decisions

This study examines the relationship between influence in the strategic decision-making process and the sharing of organizational values. Findings from a quick service restaurant chain indicate that perceptions of value sharing are associated with the ability to influence critical strategic issues. The assessed ability of various corporate departments to influence specific strategic decisions differs according to the type of value shared and the degree of value sharing. Few differences in results exist as a function of value sharing with the top management team (vice presidents) versus value sharing with the founder/CEO. Implications of the results and the need to continue empirical exploration of value-based explanations for strategic decision making are discussed.     

应用视角的IT与业务融合规律研究

企业层面的工业化与信息化融合主要体现为IT与业务的融合。本文以185家企业的实地调查为基础,从企业IT应用视角探讨IT与业务的融合规律。结果表明,企业IT与业务融合一方面呈现出从基础层面转向业务层面,再转向战略层面的融合路径;另一方面呈现出从不平衡到逐步平衡的收敛趋势。同时,本文通过对企业在不同IT应用等级中面临的主要障碍和应用重点的变化趋势分析,进一步深化IT与业务融合规律的研究。最后,基于研究结果对企业IT与业务融合提出相应的管理建议。     

Technology Acceptance Model 3 and a Research Agenda on Interventions

Prior research has provided valuable insights into how and why employees make a decision about the adoption and use of information technologies (ITs) in the workplace. From an organizational point of view, however, the more important issue is how managers make informed decisions about interventions that can lead to greater acceptance and effective utilization of IT. There is limited research in the IT implementation literature that deals with the role of interventions to aid such managerial decision making. Particularly, there is a need to understand how various interventions can influence the known determinants of IT adoption and use. To address this gap in the literature, we draw from the vast body of research on the technology acceptance model (TAM), particularly the work on the determinants of perceived usefulness and perceived ease of use, and: (i) develop a comprehensive nomological network (integrated model) of the determinants of individual level (IT) adoption and use; (ii) empirically test the proposed integrated model; and (iii) present a research agenda focused on potential pre‐ and postimplementation interventions that can enhance employees' adoption and use of IT. Our findings and research agenda have important implications for managerial decision making on IT implementation in organizations.     

The development of global IT infrastructure

A research model of the impact of a multinational corporations’ (MNC) global strategic orientation on global IT infrastructure was developed using global integration, or the degree to which a global strategy is actually implemented, as a mediator. A “matched pair” survey of 94 MNCs was conducted (two respondents per firm) in order to guard against common source bias. The results showed that the firms that pursue a globally oriented strategy actually enacted these strategies as indicated by a wide-variety of resource flows across national units. The role of the level of global integration as a mediator between global strategic orientation and global IT capabilities was empirically demonstrated. This confirms that a global strategy is not sufficient to ensure that an enabling IT infrastructure will be developed; rather it is the actual level of integration and interdependence that is achieved as a result of the strategy that drives IT infrastructure. The primary areas in which global integration was found to be closely linked to the global IT infrastructure were human resources, which significantly influenced the reach, range, support services and planning of the global IT infrastructure, and information resources which significantly influenced the planning dimension of the infrastructure. These results strongly suggest that the transfer of people among national units creates an information needs “pull” which leads to the development of better IT infrastructure and that the “push” of standardized information also contributes positively.     

Exploring the Important Role of Organizational Factors in IT Business Value: Taking a Contingency Perspective on the Resource‐Based View

Despite the importance to researchers and practitioners of how information technology (IT) contributes to organizational performance, there is an ongoing debate about the extent of IT business value (ITBV) and how to measure ITBV. Recently, a number of researchers have applied resource‐based view (RBV) and contingency theory to investigating ITBV, with mixed results. Researchers have started to recognize that ITBV is closely associated with the synergies created from IT and a variety of complementary organizational factors, which might be an alternative way to explain these mixed results. Through a review of the literature, this paper assesses the current level of knowledge in ITBV research. It identifies that significant progress has been made in the research domain, but that in‐depth inquiry into ITBV is still needed. Based on RBV and contingency theory, a research framework has been developed. The framework suggests that firms might be able to gain significant performance improvements if IT resources are in alignment with additional organizational factors (i.e. organizational strategy, organizational process, organizational culture, organizational structure). The authors believe that this framework will be valuable in assisting researchers and practitioners in understanding the complex ITBV process.     

IT人员业务能力与技术能力的互补性对企业竞争优势的影响

以资源基础观为理论指导,研究IT人员的技术能力与业务能力以及二者的协同效应对企业竞争优势的影响。在已有研究成果的基础上,构建了企业IT人员能力及其互补性与企业经营绩效关联的概念模型,通过对国内300家大中型企业的问卷调查和统计检验,验证企业IT人员的技术能力和业务能力与企业绩效都有着显著的正相关关系,而且这2种能力之间也存在较强的互补性。研究结论显示,技术能力是IT部门人员区别于其他部门的根本,业务能力使IT人员能够更好地理解企业业务,进而充分发挥IT系统的战略作用,产生的协同效应能够进一步提升企业的经营绩效。     

Corporate Strategy Formulation and Taxation: Evidence from UK Firms*

This paper considers the relationship between corporate strategy formulation and taxation. Drawing on prior literature we briefly review the important influence that international taxation has on an array of corporate strategy decisions. We then consider issues in strategy formulation and taxation planning in order to develop an understanding of when and how taxation factors impinge on strategic decision‐making. We draw out the apparent paradox between the nature of strategic decision‐making and financial decision‐making and look for areas of reconciliation. In order to shed light on some of these issues we present findings from the qualitative analysis of a set of personal interviews undertaken with senior tax practitioners in seven UK‐based multinational enterprises and then consider quantitative responses from the tax practitioners working in 145 UK firms.