Social Learning in Information Technology Investment: The Role of Board Interlocks

2020 ◽  
Author(s):  
Zhuo (June) Cheng ◽  
Arun Rai ◽  
Feng Tian ◽  
Sean Xin Xu
Keyword(s):  
Information Technology ◽  
Social Learning ◽  
Positive Relationship ◽  
Large Data ◽  
Corporate Boards ◽  
It Investment ◽  
Data Set ◽  
It Investments ◽  
Board Interlocks ◽  
Focal Firm

We use a social learning perspective to extend our understanding of information technology (IT) investment and return. Specifically, we investigate social learning in the context of interlocks between corporate boards, which allow firms to share knowledge and experiences with respect to their IT investments. Using a large data set of firm-years from 2001–2008, we find (a) a positive relationship exists between a focal firm’s IT investment and that of its interlocked firms; (b) this positive relationship is amplified by the interlocked firms’ IT capability but only if the focal firm has an active board, which devotes time to allow sufficient communication among directors; and (c) the component of the focal firm’s IT investment that is attributable to board interlock influence is positively related to the firm’s performance but only if the firm has an active board. Collectively, these findings support our central thesis: social learning through board interlocks can play a significant role in influencing a firm’s IT investments and enhancing their payoff. That said, attaining such benefits requires boards to incorporate those firms with high IT management capability and to strengthen board activity so interlocked members can substantively share their knowledge and experiences with IT investments. This paper was accepted by Anandhi Bharadwaj, information systems.

scholarly journals Governing information technology (IT) investment: A contingency perspective on organization’s IT investment goals

2021 ◽  
pp. 031289622110095
Author(s):  
Syaiful Ali ◽  
Peter Green ◽  
Alastair Robb ◽  
Adi Masli
Keyword(s):  
Information Technology ◽  
Boards Of Directors ◽  
Contingency Theory ◽  
Jel Classification ◽  
It Investment ◽  
It Investments ◽  
Contingency Perspective ◽  
Uniform Approach ◽  
Business Executives

Using contingency theory, we argue that there is not a uniform approach for companies to govern information technology (IT) investments. Rather, the level of governance over IT investments is contingent upon the organization’s goals for its IT investments. We find that Australian organizations with both operation- and market-focused IT investment goals (i.e. dual-focused IT goals) demonstrate higher IT investment governance (ITIG) levels than those with less focused IT goals. We also document that dual-IT-focused firms that do not implement high levels of ITIG underperform. Our study informs business executives, boards of directors, and other practitioners interested in governance implementations over IT investments. JEL Classification: M1

Information technology investment and innovation performance: does investment paradox exist?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peinan Ji ◽  
Xiangbin Yan ◽  
Yan Shi
Keyword(s):  
Information Technology ◽  
Time Lag ◽  
Innovation Performance ◽  
Test Model ◽  
It Investment ◽  
Firm Innovation ◽  
Data Set ◽  
Content Type ◽  
Lag Effect ◽  
Enterprise Innovation

Purpose The purpose of this study is to deepen the understanding of the effects of information technology (IT) investment on firm innovation performance and examining the investment paradox effect in China. Design/methodology/approach Using a sample of China’ public firms IT investment data between 2010 and 2016, the authors establish a test model of IT investment and innovation performance. Findings The result indicates that IT investment in firms have no effect on innovation performance in the investment period. However, in the full sample and manufacturing sample, the IT investment has a significant positive effect on innovation performance in the post-investment years. In addition, this study finds that large companies and low-age companies may contribute more to innovation when firm investment in IT. Research limitations/implications There are several limitations in this research. First, the authors are failed to obtain a larger sample about the IT investment information data set in China, so this study was compelled to use limited sample data from China, hence, this could lead to errors of too early generalization. Second, the authors use the number of invention patent applications to represent the performance of enterprise innovation, which may not show enterprise innovation effectively. Third, the firms in the sample are all in China Listed Companies, so this may not accurately reflect the entire environment of firm innovation performance, and could possibly. Practical implications The research confirms that there is a paradox and time lag effect in IT investment, which enterprises should pay attention to. Originality/value Existing research confirms that corporate IT investments can bring new products or services. However, the authors still do not know whether IT investment has improved the company’s ability of innovation. This study will fill this gap and the industry effect and time lag effect of the influence of IT investment on innovative performance are also examined.

Assessing the Value of Information Technology Investment to Firm Performance

2002 ◽  
pp. 257-278
Author(s):  
Qing Hu ◽  
Robert T. Plant
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Financial Performance ◽  
Capital Investment ◽  
Large Scale ◽  
Performance Data ◽  
It Investment ◽  
Firm Level ◽  
It Investments ◽  
And Performance

The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology (IT) over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment (ROI) and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm-level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings as well as directions for future studies are discussed.

Financial Appraisal and the IS/IT Investment Decision Making Process

1998 ◽  
Vol 13 (1) ◽  
pp. 3-14 ◽  
Author(s):  
Joan Ballantine ◽  
Stephanie Stray
Keyword(s):  
Decision Making ◽  
Information Technology ◽  
Capital Investment ◽  
Investment Decision ◽  
Decision Making Process ◽  
It Investment ◽  
It Investments ◽  
Investment Appraisal ◽  
Investment Decision Making ◽  
Financial Appraisal

This paper explores the techniques used by organizations to appraise Information Systems (IS)/Information Technology (IT) investments, and concentrates, in particular, on techniques of capital investment appraisal. We draw on relevant studies reported in both the accounting and finance, and the IS literature, which have addressed their usage. Where possible comparisons are drawn between both sets of literatures. The results of a survey that specifically examined IS/IT investment appraisal practices of a sample of UK companies is also presented. Among the issues discussed include the extent to which capital investment appraisal techniques are used to appraisal investments, the importance of the techniques used and the problems attendant on the decision making process.

The impact of information technology investment on enterprise financial performance in China

2019 ◽  
Vol 14 (3) ◽  
pp. 529-542
Author(s):  
Peinan Ji ◽  
Xiangbin Yan ◽  
Guang Yu
Keyword(s):  
Information Technology ◽  
Financial Performance ◽  
Listed Companies ◽  
Control Group ◽  
It Investment ◽  
Data Set ◽  
Content Type ◽  
Implementation Phase ◽  
Firm Financial Performance ◽  
The Impact

Purpose This paper aims to examine the influence of information technology (IT) investment, including innovative IT investment and non-innovative IT investment, on comprehensive enterprise financial performance in a developing country, China. Design/methodology/approach This paper applies the method proposed by Barber and Lyon to construct the control group to study the impact of IT investment on financial performance of enterprises, using a sample of 229 IT investment announcement data of Chinese listed companies between 2011 and 2015. Findings The analysis of the financial benefits of these IT implementations yields mixed results. The results show that companies investing in IT can significantly improve profitability both the implementation and post-implementation periods for the full sample, improve the solvency only during the implementation phase, improve the growth ability after implementation time and cannot reduce business costs in all periods. At the same time, the authors find that, compared with non-innovative IT investment, the innovative samples do not achieve better financial performance, except the profitability financial indicator. Research limitations/implications There are several limitations in this research. First, there is no large sample about the IT investment information data set in China, so this study was compelled to use limited sample data from China; hence, this could lead to errors of too early generalization. Second, the firms in the sample are all in China’s listed companies, so this may either not accurately or possibly could reflect the entire environment of developing countries. Originality/value First, it extends the scope of the established literature by examining the influence of IT investment with China’s public firms data and IT investment to see if such spending has had an influence on corporate financial performance. Second, there is a lack of research on the impact of IT investment on comprehensive financial performance of an enterprise, compared with the previous one-sided financial performance, such as profitability or financial cost. Third, as far as the authors are aware, there are no studies on the impact of IT investment on firm financial performance based on innovative and non-innovative classification.

scholarly journals IT, CSR And Industry Relationships: A Descriptive Study

2011 ◽  
Vol 15 (3) ◽  
pp. 107
Author(s):  
Margaret L. Andersen ◽  
Yongtao (David) Hong ◽  
Limin Zhang
Keyword(s):  
Information Technology ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Competitive Advantage ◽  
Descriptive Study ◽  
Exploratory Analysis ◽  
It Investment ◽  
Socially Responsible ◽  
It Investments ◽  
Corporate Social

From the resource-based perspective, corporate social responsibility (CSR) and investment in information technology (IT) are both associated with a firms profitable performance. Corporations, taking socially responsible actions, can create valuable intangible assets such as improved relations with stakeholders. In a similar fashion, effective investment in and use of information technology can positively impact a firms competitive advantage. Both CSR and IT investments consume organizational resources and each may lead to a competitive advantage separately. This paper explores if one complements or opposes the other.Investment in information technology and the socially responsible activities of companies vary across industries. The purpose of this paper is to offer an exploratory analysis into a possible association between IT investment and CSR at the industry level. The findings indicate that there is no discernible relationship.

scholarly journals The Impact Of Information Technology Investments On Managerial Decision Making: Evidence From Dividend Payout

2011 ◽  
Vol 18 (3) ◽  
Author(s):  
T. Selwyn Ellis ◽  
K. Michael Casey ◽  
Hani I. Mesak
Keyword(s):  
Information Technology ◽  
Agency Cost ◽  
Font Size ◽  
It Investment ◽  
Managerial Decision ◽  
Dividend Payout ◽  
It Investments ◽  
Managerial Decisions ◽  
Information Technology Investments ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="mso-bidi-font-size: 10.0pt;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">Investments in Information Technology (IT) are an increasing part of organizational expenditures in spite of the fact that there is little evidence in the existing literature that suggests these investments are related to the organization&rsquo;s performance. The uncertainty of IT investment payoff should be reflected in other managerial decisions. This research examines Rozeff's (1982) agency cost/transaction cost tradeoff model to determine if IT investments are related to dividend payout ratios for an organization. A dividend payout model including an IT investment variable is estimated. The estimation results suggest that a significant positive relationship exists between dividend payout and a firm&rsquo;s IT investments.</span></span></span></p>

Aligning Information Technology and Business: The Differential Effects of Alignment During Investment Planning, Delivery, and Change

2020 ◽  
Vol 31 (4) ◽  
pp. 1260-1281
Author(s):  
Terence J. V. Saldanha ◽  
Dongwon Lee ◽  
Sunil Mithas
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Positive Relationship ◽  
Early Stage ◽  
Digital Transformation ◽  
Archival Data ◽  
Investment Planning ◽  
It Investment ◽  
Business Alignment ◽  
Low Levels

Digital transformations often require firms to align and synchronize their information technology (IT) and business initiatives. In this context, one important question that managers face is where they should focus most when aligning IT and business for leveraging IT investment for firm performance. Authors argue that firms that focus on IT–business alignment at the later stages (i.e., IT delivery and IT change) are better able to translate their IT investment into revenue than firms that focus on IT–business alignment at the early stage (i.e., IT investment planning) of the IT lifecycle. They use archival data from more than 120 firms in India and find that the positive relationship between IT investment and firm revenue is stronger for firms that focus on IT delivery–business alignment or IT change–business alignment than for firms that focus on IT investment planning–business alignment. In addition, they find that at higher levels of IT investment, firms that focus on IT change–business alignment or IT delivery–business alignment have higher revenue than firms that focus on IT investment planning–business alignment, whereas at low levels of IT investment, firms that focus on IT investment planning–business alignment outperform firms that focus on IT delivery–business alignment or IT change–business alignment. Taken together, these findings can help managers to improve the success of their digital transformation efforts by tailoring their alignment efforts across planning, delivery, and change stages.

Small Indonesian Holding Company Of SME’s : Study on The Value on IT Investment : PT.XYZ Core

2019 ◽  
Vol 3 (1) ◽  
pp. 155-159
Author(s):  
Dodik Novianto
Keyword(s):  
Information Technology ◽  
Best Practices ◽  
Business Value ◽  
It Investment ◽  
It Investments ◽  
Technology Investment ◽  
Holding Company ◽  
It Managers ◽  
Information Technology Investment ◽  
The Cost

This paper explains that in PT.XYZ as SMEs do not have the IT integrated . IT managers perform checks on the company and find the condition that it is true in the enterprise IT integrated yet. In this paper further research requires a comparison with conducting surveys and studies in several large holding company. This is what causes the difficulty to estimate the cost and benefits of information technology investment Compared to investment value. (Money et al., 1995) share the benefits the use of information technology into two kinds, tangible and intangible . This has the caused many organization have difficulty how to calculate the cost and benefit of the investment associated with the resulting benefits and using Val IT one of the solution to study on the value on IT investments in SMEs at PT.XYZ . Val IT is now, the realization of business value of a clear investment, measured monitoring, to provide a means to optimize, and add the best practices for the end.

scholarly journals IMPLEMENTATION OF BUSINESS INTELLIGENCE ON BANKING, RETAIL, AND EDUCATIONAL INDUSTRY

2013 ◽  
Vol 7 (2) ◽  
pp. 65 ◽  
Author(s):  
Arta Moro Sundjaja
Keyword(s):  
Decision Making ◽  
Information Technology ◽  
Business Process ◽  
Business Intelligence ◽  
Large Data ◽  
Daily Basis ◽  
Decision Making Process ◽  
Data Set ◽  
Large Data Set

Information technology is useful to automate business process involving considerable data transaction in the daily basis. Currently, companies have to tackle large data transaction which is difficult to be handled manually. It is very difficult for a person to manually extract useful information from a large data set despite of the fact that the information may be useful in decision-making process. This article studied and explored the implementation of business intelligence in banking, retail, and educational industries. The article begins with the exposition of business intelligence role in the industries; is followed by an illustration of business intelligence in the industries and finalized with the implication of business intelligence implementation.

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