Impact of IT Governance and IT Capability on Firm Performance

ABSTRACT

Based on resource-based and strategic choice theory, this research empirically validates that IT governance is an important antecedent of IT capability, which in turn results in improved firm performance. This article contributes to the IS literature by proposing a comprehensive measure of IT governance based on secondary data, and simultaneously examining the impact of IT governance and IT capability on firm performance.

KEYWORDS:

• Firm performance
• IT business value
• IT capability
• IT governance

Notes

1. IW magazine publishes the IW500 issue in September every year; subscribers or libraries with subscription contracts can access these issues at http://www.informationweek.com/.

Additional information

Notes on contributors

Peiqin Zhang

Peiqin Zhang is an Assistant Professor of Computer Information Systems in the McCoy College of Business at the Texas State University. She received her B.S. in mathematics for business and PhD in Computing and IS with a concentration in MIS from University of North Carolina at Charlotte. Her research interests include IT business value, IT capability, IT governance, IT auditing and controls, and security and piracy.

Kexin Zhao

Kexin Zhao is an Associate Professor of Management Information Systems at the Belk College of Business at the University of North Carolina in Charlotte. She received her PhD from University of Illinois at Urbana-Champaign. Her research interests include economics of IS, IT standardization, and electronic commerce. Her articles have been published in such journals as Decision Support Systems, Electronic Markets, Industrial and Corporate Change, IEEE Transactions on Engineering Management, International Journal of Electronic Commerce, and Journal of Management Information Systems.

Ram L. Kumar

Ram L. Kumar is a Professor at Belk College of Business Administration, University of North Carolina at Charlotte. He received his PhD from the University of Maryland. His current research interests include open innovation, techniques for evaluating and managing portfolios of IT investments, service science, knowledge management, and business analytics. His research has been published in Communications of the ACM, Computers and Operations Research, Decision Sciences, Decision Support Systems, European Journal of Information Systems, IEEE Transactions on Engineering Management, Information Resource Management Journal, International Journal of Electronic Commerce, International Journal of Production Research, Journal of Management Information Systems, and others.