The influence of IT investment and IT governance on corporate performance of multibusiness firms
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The influence of IT investment and IT governance on corporate performance of multibusiness firms KyungSeok Ryu1 · JooSeok Park1 · JaeHong Park1
© Springer Science+Business Media New York 2017
Abstract The concept of IT relatedness has explained a link between IT and corporate performance of multibusiness firms. Although IT relatedness provided a significant link between IT relatedness and corporate performance, there is limited understanding about antecedents of IT relatedness. Thus, this study is the first to investigate what factors influence IT relatedness, which ultimately leads to corporate performance. With a total of 324 responses from multibusiness firms, this study empirically investigates the two antecedents of IT relatedness–IT investment and IT governance structures. This study suggests strategic guides regarding IT relatedness to IT managers of multibusiness firms. Keywords Antecedents of IT relatedness · IT investment · IT governance structures · Corporate performance · Multibusiness firms
1 Introduction So far multibusiness firms have grown at such high rates so that many firms now run more than one business units. Although a multibusiness firm is structured as one company, there are two or more business units within it. So, multibusiness firms need to use IT heavily to coordinate their several business units. However, multibusiness
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JaeHong Park [email protected] KyungSeok Ryu [email protected] JooSeok Park [email protected]
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Kyung Hee University, Dongdaemun-Gu, Seoul 130-701, South Korea
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K. Ryu et al.
firms often counter a lack of coordination of their IT resources across the business units since they usually have autonomy when developing their business and IT strategies. IT relatedness has been highlighted in an attempt to solve this issue. IT relatedness is defined as “the extent to which a multibusiness firm uses common IT resources and common IT management processes across its business units” [91]. That is, by using common IT resources and management across business units, multibusiness firms have a high level of IT relatedness and thus can create a cross-unit IT synergy effect [91,93]. Although the previous literature provides a significant link between IT relatedness and corporate performance, there is limited understanding about antecedents of IT relatedness in multibusiness firms. The literature has not thoroughly investigated how multibusiness firms can achieve a high level of IT relatedness, which ultimately leads to the cross-unit IT synergy effect and corporate performance. For example, how do multibusiness firms achieve a high level of IT relatedness to enhance corporate performance? What are antecedents of IT relatedness in multibusiness firms? Or would antecedents be mediated by IT relatedness and knowledge capability to influence corporate performance? Answering these questions has important implications for both related literature and multibusiness firms. In addition, Tanriverdi [91] noted that future study needs to explore the antecedents (e.g., IT governance or inv
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