RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion and cost reduction, but at
higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity increasingly pays off.
Keywords: Information technology strategic emphasis, IT ambidexterity, IT strategic ambidexterity, firm
performance, profitability, IT investments, revenue growth, cost reduction, dual emphasis
Introduction1
Firms spend significant sums of money on information tech-
nology (IT) resources, yet they are often challenged in
developing appropriate strategies to direct these resources to
realize business value (for a discussion, see Kohli and
Devaraj 2004). Previous research has studied either the im-
pact of IT investments on firm performance (e.g., Barua and
Mukhopadhyay 2000; Dedrick et al. 2003; Hoadley and Kohli
2014; Kohli and Devaraj 2003; Kohli et al. 2012) or the effect
of IT strategic emphasis on firm performance (e.g., Leidner et
al. 2011; Oh and Pinsonneault 2007; Tallon 2007; Tallon et
al. 2000). However, few studies focus on the effect of IT
investments and IT strategic emphasis simultaneously. Given
that profit is equal to revenue minus cost, it is clear that there
are three strategic paths from IT to firm performance: IT can
be used to (1) reduce costs by improving productivity and
efficiency; (2) increase revenues by fully exploiting oppor-
tunities through existing customers, channels, and products/
services and by finding or creating new customers, channels,
and products/services; or (3) reduce costs and increase
revenues simultaneously. W ...
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Re cord: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
1
2
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE: CONJECTURE
AND EMPIRICAL EVIDENCE1
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT investm ...
Week 6 Post Menopausal and Sexuality Issues in the Maturing and O.docxhelzerpatrina
Week 6: Post Menopausal and Sexuality Issues in the Maturing and Older Adult Discussion
No unread replies. No replies.
Students will not receive credit for any discussions posted after Sunday 11:59pm MT.
Ageism and gender bias can affect who and how we ask about sexual health, sexual activity, and concerning symptoms. Depending on your own level of comfort and cultural norms this can be a tough conversation for some providers. But this is an important topic and as our videos discussed, women are wanting us to ask about sexual concerns. This week we also reviewed sexually transmitted diseases and the effects of ageism on time to diagnosis so it is necessary to ask these questions and provide good education for all patients. You will not know any needs unless you ask.
Discussion Questions:
· Review the required NAMS videos. What was the most surprising thing you learned about in the videos? Explain why it was surprising.
· What is GSM? What body systems are involved? How does this affect a woman's quality of life?
· What treatment does Dr Shapiro recommend?
· Review one aspect of treatment that Dr Shapiro recommends and include an EBP journal article or guideline recommendation in addition to referencing the video in your response.
Sexuality and the older adult
· What is your level of comfort in taking a complete sexual history? Is this comfort level different for male or female patients? If so, why?
· How will this information impact the way you will interact with your mature and elderly clients?
RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion ...
8/13/2019 EBSCOhost
https://web.b.ebscohost.com/ehost/delivery?sid=a4f02db1-be61-4ac6-bd56-57bacea902b5%40pdc-v-sessmgr06&vid=1&ReturnUrl=https%3a%2f%2fweb.b.ebs… 1/19
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
Record: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM ...
7/30/2019 EBSCOhost
https://web.b.ebscohost.com/ehost/delivery?sid=db10a78f-b7dc-47da-97ce-e772cde6f488%40pdc-v-sessmgr05&vid=2&ReturnUrl=https%3a%2f%2fweb.b.ebscoh… 1/19
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
Record: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMA ...
This document discusses the evolving relationship between business strategy and IT strategy. It notes that executives now recognize IT's strategic potential and its ability to impact top-line growth. As a result, IT is increasingly involved in strategic discussions and helping shape business strategy through new technologies. However, effective strategy development still requires addressing challenges such as aligning business and IT strategies and ensuring the right people are involved from both business and IT. The document also outlines four critical success factors for developing IT strategy: revisiting the business model, having strategic themes, involving the right people, and working in partnership between business and IT.
15C h a p t e r2 Developing IT Strategy for Business V.docxnovabroom
15
C h a p t e r
2 Developing IT Strategy for Business Value1
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and S. Singh.
“Developing IT Strategy for Business Value.” Journal of Information Technology Management XVIII, no. 1 (June
2007): 49–58. Reproduced by permission of the Association of Management.
Suddenly, it seems, executives are “getting” the strategic potential of IT. Instead of being relegated to the back rooms of the enterprise, IT is now being invited to the boardrooms and is being expected to play a leading role in delivering top-
line value and business transformation (Korsten 2011; Luftman and Zadeh 2011; Peslak
2012). Thus, it can no longer be assumed that business strategy will naturally drive IT
strategy, as has traditionally been the case. Instead, different approaches to strategy
development are now possible and sometimes desirable. For example, the capabilities
of new technologies could shape the strategic direction of a firm (e.g., mobile, social
media, big data). IT could enable new competencies that would then make new busi-
ness strategies possible (e.g., location-based advertising). New options for governance
using IT could also change how a company works with other firms (think Wal-Mart
or Netflix). Today new technologies coevolve with new business strategies and new
behaviors and structures (see Figure 2.1). However, whichever way it is developed, if
IT is to deliver business value, IT strategy must always be closely linked with sound
business strategy.
Ideally, therefore, business and IT strategies should complement and support each
other relative to the business environment. Strategy development should be a two-way
process between the business and IT. Yet unfortunately, poor alignment between them
remains a perennial problem (Frohman 1982; Luftman and Zadeh 2011; McKeen and
Smith 1996; Rivard et al. 2004). Research has already identified many organizational
challenges to effective strategic alignment. For example, if their strategy-development
processes are not compatible (e.g., if they take place at different times or involve differ-
ent levels of the business), it is unlikely that the business and IT will be working toward
the same goals at the same time (Frohman 1982). Aligning with individual business
units can lead to initiatives that suboptimize the effectiveness of corporate strategies
(McKeen and Smith 1996). Strategy implementation must also be carefully aligned to
16 Section I • Delivering Value with IT
ensure the integration of business and IT efforts (Smith and McKeen 2010). Finally, com-
panies often try to address too many priorities, leading to an inadequate focus on key
strategic goals (Weiss and Thorogood 2011).
However, strategic alignment is only one problem facing IT managers when they
develop IT strategy. With IT becoming so much more central to the development and
delivery of business strategy, much mor.
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVESTM...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets (independent variables) and some specified benefits/value creation (dependent variables), beyond Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175 questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana, and analyzed,the following findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be innovative with IT. Again, the results showed that most of the complementary assets employed in this work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the strongest positive relationships was found to exist between “supportive organizational culture that values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Re cord: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
1
2
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE: CONJECTURE
AND EMPIRICAL EVIDENCE1
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT investm ...
Week 6 Post Menopausal and Sexuality Issues in the Maturing and O.docxhelzerpatrina
Week 6: Post Menopausal and Sexuality Issues in the Maturing and Older Adult Discussion
No unread replies. No replies.
Students will not receive credit for any discussions posted after Sunday 11:59pm MT.
Ageism and gender bias can affect who and how we ask about sexual health, sexual activity, and concerning symptoms. Depending on your own level of comfort and cultural norms this can be a tough conversation for some providers. But this is an important topic and as our videos discussed, women are wanting us to ask about sexual concerns. This week we also reviewed sexually transmitted diseases and the effects of ageism on time to diagnosis so it is necessary to ask these questions and provide good education for all patients. You will not know any needs unless you ask.
Discussion Questions:
· Review the required NAMS videos. What was the most surprising thing you learned about in the videos? Explain why it was surprising.
· What is GSM? What body systems are involved? How does this affect a woman's quality of life?
· What treatment does Dr Shapiro recommend?
· Review one aspect of treatment that Dr Shapiro recommends and include an EBP journal article or guideline recommendation in addition to referencing the video in your response.
Sexuality and the older adult
· What is your level of comfort in taking a complete sexual history? Is this comfort level different for male or female patients? If so, why?
· How will this information impact the way you will interact with your mature and elderly clients?
RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion ...
8/13/2019 EBSCOhost
https://web.b.ebscohost.com/ehost/delivery?sid=a4f02db1-be61-4ac6-bd56-57bacea902b5%40pdc-v-sessmgr06&vid=1&ReturnUrl=https%3a%2f%2fweb.b.ebs… 1/19
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
Record: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM ...
7/30/2019 EBSCOhost
https://web.b.ebscohost.com/ehost/delivery?sid=db10a78f-b7dc-47da-97ce-e772cde6f488%40pdc-v-sessmgr05&vid=2&ReturnUrl=https%3a%2f%2fweb.b.ebscoh… 1/19
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
Record: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMA ...
This document discusses the evolving relationship between business strategy and IT strategy. It notes that executives now recognize IT's strategic potential and its ability to impact top-line growth. As a result, IT is increasingly involved in strategic discussions and helping shape business strategy through new technologies. However, effective strategy development still requires addressing challenges such as aligning business and IT strategies and ensuring the right people are involved from both business and IT. The document also outlines four critical success factors for developing IT strategy: revisiting the business model, having strategic themes, involving the right people, and working in partnership between business and IT.
15C h a p t e r2 Developing IT Strategy for Business V.docxnovabroom
15
C h a p t e r
2 Developing IT Strategy for Business Value1
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and S. Singh.
“Developing IT Strategy for Business Value.” Journal of Information Technology Management XVIII, no. 1 (June
2007): 49–58. Reproduced by permission of the Association of Management.
Suddenly, it seems, executives are “getting” the strategic potential of IT. Instead of being relegated to the back rooms of the enterprise, IT is now being invited to the boardrooms and is being expected to play a leading role in delivering top-
line value and business transformation (Korsten 2011; Luftman and Zadeh 2011; Peslak
2012). Thus, it can no longer be assumed that business strategy will naturally drive IT
strategy, as has traditionally been the case. Instead, different approaches to strategy
development are now possible and sometimes desirable. For example, the capabilities
of new technologies could shape the strategic direction of a firm (e.g., mobile, social
media, big data). IT could enable new competencies that would then make new busi-
ness strategies possible (e.g., location-based advertising). New options for governance
using IT could also change how a company works with other firms (think Wal-Mart
or Netflix). Today new technologies coevolve with new business strategies and new
behaviors and structures (see Figure 2.1). However, whichever way it is developed, if
IT is to deliver business value, IT strategy must always be closely linked with sound
business strategy.
Ideally, therefore, business and IT strategies should complement and support each
other relative to the business environment. Strategy development should be a two-way
process between the business and IT. Yet unfortunately, poor alignment between them
remains a perennial problem (Frohman 1982; Luftman and Zadeh 2011; McKeen and
Smith 1996; Rivard et al. 2004). Research has already identified many organizational
challenges to effective strategic alignment. For example, if their strategy-development
processes are not compatible (e.g., if they take place at different times or involve differ-
ent levels of the business), it is unlikely that the business and IT will be working toward
the same goals at the same time (Frohman 1982). Aligning with individual business
units can lead to initiatives that suboptimize the effectiveness of corporate strategies
(McKeen and Smith 1996). Strategy implementation must also be carefully aligned to
16 Section I • Delivering Value with IT
ensure the integration of business and IT efforts (Smith and McKeen 2010). Finally, com-
panies often try to address too many priorities, leading to an inadequate focus on key
strategic goals (Weiss and Thorogood 2011).
However, strategic alignment is only one problem facing IT managers when they
develop IT strategy. With IT becoming so much more central to the development and
delivery of business strategy, much mor.
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVESTM...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets (independent variables) and some specified benefits/value creation (dependent variables), beyond Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175 questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana, and analyzed,the following findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be innovative with IT. Again, the results showed that most of the complementary assets employed in this work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the strongest positive relationships was found to exist between “supportive organizational culture that values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
Chapter 3Linking IT to Business Metrics From the first time IT.docxwalterl4
Chapter 3
Linking IT to Business Metrics
From the first time IT started making a significant dent in corporate balance sheets, the holy grail of academics, consultants, and business and IT managers has been to show that what a company spends on IT has a direct impact on its performance. Early efforts to do this, such as those trying to link various measures of IT input (e.g., budget dollars, number of PCs, number of projects) with various measures of business performance (e.g., profit, productivity, stock value) all failed to show any relationship at all (Marchand et al. 2000). Since then, everyone has prop- erly concluded that the relationship between what is done in IT and what happens in the business is considerably more complex than these studies first supposed. In fact, many researchers would suggest that the relationship is so filtered through a variety of “conversion effects” (Cronk and Fitzgerald 1999) as to be practically impossible to demonstrate. Most IT managers would agree. They have long argued that technology is not the major stumbling block to achieving business performance; it is the business itself—the processes, the managers, the culture, and the skills—that makes the differ- ence. Therefore, it is simply not realistic to expect to see a clear correlation between IT and business performance at any level. When technology is successful, it is a team effort, and the contributions of the IT and business components of an initiative cannot and should not be separated.
Nevertheless, IT expenditures must be justified. Thus, most companies have concentrated on determining the “business value” that specific IT projects deliver. By focusing on a goal that matters to business (e.g., better information, faster transaction processing, reduced staff), then breaking this goal down into smaller projects that IT can affect directly, they have tried to “peel the onion” and show specifically how IT delivers value in a piecemeal fashion. Thus, a series of surrogate measures are usually used to demonstrate IT’s impact in an organization. (See Chapter 1 for more details.)
More recently, companies are taking another look at business performance met- rics and IT. They believe it is time to “put the onion back together” and focus on what
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and C. Street. “Linking IT to Business Metrics.” Journal of Information Science and Technology 1, no. 1 (2004): 13–26. Reproduced by permission of the Information Institute.
1
27
28 Section I • Delivering Value with IT
really matters to the enterprise. This perspective argues that employees who truly understand what their business is trying to achieve can sense the right ways to per- sonally improve performance that will show up at a business unit and organizational level. “People who understand the business and are informed will be proactive and ... have a disposition to create business value every day in many.
Fueling Innovation through InformationTechnology in SMEsb.docxhanneloremccaffery
Fueling Innovation through Information
Technology in SMEs*
by Clay Dibrell, Peter S. Davis, and Justin Craig
This paper describes a study that investigates the mediating effects of information
technology (IT) on the relationships among product and process innovations and firm
performance (measured in multiple profitability and growth rate metrics). Using
structural equation modeling on a sample of 397 small and medium-sized enterprises
(SMEs), we find evidence that (1) increases on the strategic emphasis placed on
innovation, both product and process, positively impact the prominence managers
place on IT; (2) the impact of innovation (both product and process) on performance
(both profitability and growth) is primarily indirect, felt via the mechanism of the
importance managers place on IT; and (3) an increased emphasis on IT abets
managers’ perception of their firms’ performance, as compared with that observed
among peer firms (other SMEs).
A commitment to innovation has long
been considered to be important to the
success of entrepreneurial ventures and
small firms (Fiol 1996). Research has
shown that innovation stimulates ven-
tures’ growth (e.g., Wolff and Pett
2006; Motwani et al. 1999; Hax and
Majluf 1991) and also provides a key
source of competitive advantage in the
absence of scale economies (Lewis et al.
2002). Considered from the resource-
based view of the firm (Barney 1991),
successful innovation may be dependent
on the presence of other organization-
*The authors wish to thank Don Neubaum and the anonymous reviewers for their helpful
comments and direction. Financial support was provided by the Austin Family Business
Program in the College of Business at Oregon State University.
Clay Dibrell is associate professor of strategic management in the College of Business at
Oregon State University and research fellow at Bond University.
Peter S. Davis is professor and chair of the Department of Management in the Belk College
of Business at the University of North Carolina–Charlotte.
Justin Craig is associate professor of family business and entrepreneurship at Bond
University.
Address correspondence to: Clay Dibrell, 200 Bexell Hall, College of Business, Oregon State
University, Corvallis, OR 97331. Tel: (541) 737-6061. E-mail: [email protected]
Journal of Small Business Management 2008 46(2), pp. 203–218
DIBRELL, DAVIS, AND CRAIG 203
mailto:[email protected]
specific skills and capabilities. For
example, substantial evidence has begun
to accumulate that suggests that appro-
priate strategic employment of informa-
tion technology (IT) may be essential
in translating strategies (e.g., innovation)
into enhanced firm performance (e.g.,
Ray, Muhanna, and Barney 2005;
Sakaguchi, Nicovich, and Dibrell 2004).
A direct linkage between IT and firm
performance was established by Powell
and Dent-Micallef (1997). Bharadwaj
(2000) found that high IT-capable firms
(those that invest heavily in IT) outper-
form competitors that do not inve ...
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVES...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets
(independent variables) and some specified benefits/value creation (dependent variables), beyond
Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175
questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana,
and analyzed,thefollowing findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to
help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be
innovative with IT. Again, the results showed that most of the complementary assets employed in this
work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the
strongest positive relationships was found to exist between “supportive organizational culture that
values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
This document presents a study that develops a model to assess the value-based contribution of information technology (IT) to firm performance. The study aims to address contradictory findings from prior research on the productivity paradox by taking a process-oriented approach. The model proposes that IT business value can be measured through its impact on processes within a firm's value chain. Survey data from 180 executives is used to test the model, with structural equation modeling confirming that perceptual ratings of IT's impact on value chain processes can provide a measure of IT business value at the organizational level.
This document discusses connecting IT strategy to business value. It argues that IT should not be seen merely as an infrastructure utility, but rather as a strategic enabler. The value of IT is negotiated between IT providers and business users. For IT to have strategic value, it must be integrated with business needs and processes. The document examines different views on IT strategy and discusses balancing operational effectiveness with strategic positioning of IT.
This document summarizes a study that explores the relationship between IT outsourcing (ITO) and business and IT alignment. The study aims to provide recommendations for how outsourcing relationships can support business and IT alignment. Through a literature review and analysis of four case studies, the study found that higher levels of motivation for outsourcing, relationship between outsourcer and provider, and alignment maturity of the outsourcer can lead to positive effects of ITO on business and IT alignment. Organizational turbulence on either side can negatively impact the relationship. Service providers also tended to assess relationships more positively than outsourcers.
If the CIO is to be valued as a strategic actor, how can he bring.docxTatianaMajor22
If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Is there a lack of information on strategic planning? Nope. I think the process of planning is poorly understood, and rarely endorsed. The reasons are simple enough. Planning requires a commitment of resources (time, talent, money); it requires insight; it requires a total immersion in the corporate culture. While organizations do plan, planning is invariably attached to the budget process. It is typically here that the CIO lays out his/her vision for the coming year Now a few years ago authors began writing on the value of aligning IT purpose to organizational purpose. They wrote at a time when enterprise architectural planning was fairly new, and enterprise resource management was on the lips of every executive. My view is that alignment is a natural process driven by the availability of the tools to accomplish it. Twenty years ago making sense of IT was more about processing power, and database management. We are in a new age of IT, and it is the computer that is the network, not the network as an independent self-contained exchange of information. If you will spend some time reviewing the basic materials I provided on strategic planning and alignment, we can begin our discussions for the course. Again, here is the problem I would like for us to tackle: If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Most of the articles I bundled together for this week are replete with tables and charts. These can be a heavy read. Your approach should be to review these articles for the "big ideas" or lessons that are take away. I think these studies are significant enough that we will conclude our first week with an understanding of the roles between executive leaders, and how they see Information Technology playing a role in shaping a business strategy.
Read the articles to answer the question. Please No Plagerism or verbatim but you are allowed to quote from the article.
Achieving and Sustaining
Business-IT Alignment
Jerry Luftman
Tom Brier
I
n recent decades, billions of dollars have been invested in intormation tech-
nology (IT). A key concern of business executives is alignment—applying IT
in an appropriate and timely way and in harmony with business strategies,
goals, and needs. This issue addresses both how IT is aligned with the busi-
ness and how the business should be aligned with IT Frustratingly, organizations
seem to find it difficult or impossible to harness the power of information tech-
nology for their own long-term benefit, even though there is worldwide evi-
dence that IT has the power to transform whole industries and markets.' How
can companies.
JUSTIFICATION OF, AND BENEFITS REALIZATION BEYOND IT INVESTMENTS: ANALYSIS F...ijmvsc
This work looked at the justification of IT investments in general, to draw important conclusions that could
be beneficial to IT project managers and professionals, and then zero in on the angle of benefits realization
beyond IT investments.About 30 categories/sets of research outputs or articles out of more than 60 articles
reviewed were used for this work. No primary data was employed for this work. Articles were sourced from
databases such as Google Scholar, Research Gate, Academia.edu, Google search engine, Elsevier, and so
on. The main themes used for the search were IT investments, Justification for IT investments, IT
investments benefit determination, value creation beyond IT investments, and so on. The results showed
that justification is unique to every firm, it is contextual, and so stakeholders must take into consideration
environmental factors, corporate and strategic goals, experience and expertise of stakeholders, and so on,
to design its framework and measures to justify IT investments. Zeroing on benefits realization, two things
run through all the discussions: benefits realization of IT investments must take into consideration the
organization's strategic objectives and that they do not simply emerge, as if by magic. Their realization has
to be planned, delivered, reviewed, and exploited to ensure value realization on a more consistent/constant
basis.
Research articleFactors affecting the successful realisati.docxrgladys1
Research article
Factors affecting the successful realisation
of benefits from systems development
projects: findings from three case studies
Neil F Doherty1, Colin Ashurst2, Joe Peppard3
1The Business School, Loughborough University, Loughborough, UK;
2The Business School, Durham University, Durham, UK;
3Cranfield School of Management, Cranfield, Bedfordshire, UK
Correspondence:
NF Doherty, The Business School, Loughborough University, Loughborough, LE11 3TU, UK.
Tel: þ 44 01509 223328;
Fax: þ 44 01509 223960;
E-mail: [email protected]
Abstract
The return that organisations derive from investments in information systems and
technology continues to disappoint. While there is a very significant body of literature on
the factors that should facilitate a successful outcome from systems development, there is
growing concern that these prescriptions are not having their desired effect. In this paper,
we argue that the success of a systems development project should be measured in terms
of its ability to deliver meaningful benefits, rather than the timely delivery of a technical
artefact, and therefore organisations should adopt an explicit and proactive benefits
realisation approach when investing in IT. Consequently, we sought to explore those
actionable factors that might facilitate the effective realisation of benefits from systems
development initiatives. Three organisations were identified that claimed to adopt a
proactive approach to benefits realisation, and detailed studies of their systems
development practices were conducted. Our analysis found that whilst one organisation
had been successful in its adoption of a benefits realisation perspective, the other two had
not, and this allowed us to identify those factors that helped to explain this difference in
outcomes. In short, this paper makes an important contribution by identifying how a sub-
set of traditional systems success factors might be enhanced, to give them a more explicit
benefits realisation orientation. Moreover, it presents a coherent set of principles that can
be used for deriving other factors and practices.
Journal of Information Technology (2012) 27, 1–16. doi:10.1057/jit.2011.8
Published online 9 August 2011
Keywords: IT development projects; benefits realisation; organisational change; ISD success factors;
value
Introduction
T
he context for the research reported in this paper is the
continued high failure rate of investments in information
systems/information technology (IS/IT): a considerable
amount of time, money, effort and opportunity can be wasted
upon IT investments that ultimately fail to deliver benefits
(Fortune and Peters, 2005; Peppard and Ward, 2005).
Estimates of the level of failure may vary, but over the past
30 years they have tended to stay uncomfortably high. More
specifically, it has been suggested that in the late 1970s only
20% of the projects ‘achieved something like their intended
benefits’ (Eason, 1988), and that by the late 1980s, it .
This document discusses management information systems and their importance to organizational performance and competitive advantage. It provides definitions of management information systems and how they have evolved from basic accounting applications to more advanced decision support systems. The document then discusses various factors related to information technology investments, productivity, and organizational impact, and presents a conceptual model and research methodology for studying the relationships between these factors.
This research essay descriptively details what is meant by Information Technology Strategy and why in increasingly automated business environment of today, successful firms are those that not only have an established IT strategy but also keep updating the same based on changes that may be encountered. Further explained in extreme detail are the reasons that necessitate the need for organizations of today to have an established and implemented IT strategy other than the competition that may be faced from other organizations which have an IT strategy. Also detailed are the values and benefits that may be derived by organizations by having an IT strategy and what qualities and elements of an IT strategy would need to be established in order to derive the maximum amount of value from an IT strategy.
Advantages And Limitations Of Performance Measurement Tools The Balanced Sco...Andrea Porter
This document discusses performance measurement tools, specifically comparing the Balanced Scorecard (BSC) to other tools. It notes that the BSC considers both financial and non-financial metrics to determine organizational performance, representing both a measurement tool and a performance management system. While widely used, the BSC has some limitations in dynamic environments. The document advocates combining various tools and approaches rather than relying solely on one evaluation framework like the BSC, to better align strategy as the business environment changes.
Challenges in Business and IT AlignmentVidur Pandit
The document discusses challenges with aligning business and IT. It provides context on the importance of business-IT alignment and defines key concepts. The phases of the business-IT alignment cycle are also outlined, including plan, model, manage and measure. The goal of alignment is to ensure IT supports business strategies and processes efficiently.
This document discusses aligning IT strategy with business goals. It emphasizes reviewing strategic plans to identify how technology can help achieve goals like becoming a leading home health provider. IT and business strategies should complement each other through collaborative development. Data is collected from staff through surveys and interviews to identify themes like competitiveness. Linking IT performance to business metrics allows evaluating each unit's contributions to overall value. Value-based management and key performance indicators can help consider IT a vital business player.
This published paper aggregates and segments the financial projections of client organizations in multiple industries derived by improving master data quality across the enterprise.
The art of value creation with information technology potentials in business ...Alexander Decker
This document discusses the role of strategic information systems in business value creation. It defines value creation as activities that reduce costs and increase profits through efficiency. Strategic information systems involves using information technology and managerial skills to identify business problems and create solutions that help organizations achieve their objectives. The document analyzes how strategic information systems can help realize value by focusing on business processes and capturing value through technologies like the internet, business intelligence, and collaboration systems. It argues that information systems strategy is important for competitive advantage and should be integrated with business strategy for organizations to effectively create value.
2C h a p t e r1 Developing and Delivering on the it Va.docxBHANU281672
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter 1 • Developing and Delivering on the IT Value Proposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Th.
2C h a p t e r1 Developing and Delivering on the it Va.docxgilbertkpeters11344
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter1 • DevelopingandDeliveringontheITValueProposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Thirty years .
Mr. Bush, a 45-year-old middle school teacher arrives at the emergen.docxaudeleypearl
Mr. Bush, a 45-year-old middle school teacher arrives at the emergency department by EMS ground transport after he experienced severe mid-sternal chest pain at work. On arrival to the ED:
a. What priority interventions would you initiate?
b. What information would you require to definitively determine what was causing Mr. Bush’s chest pain?
.
Movie Project Presentation Movie TroyInclude Architecture i.docxaudeleypearl
Movie Project Presentation: Movie: Troy
Include: Architecture in the movie. Historical research to figure out if the movie did a good job of representing the art historical past of not. Anything in the movie that are related to art or art history. And provide its outline and bibliography (any website source is acceptable as well)
.
More Related Content
Similar to RESEARCH NOTEHOW INFORMATION TECHNOLOGY STRATEGY ANDINVE.docx
Chapter 3Linking IT to Business Metrics From the first time IT.docxwalterl4
Chapter 3
Linking IT to Business Metrics
From the first time IT started making a significant dent in corporate balance sheets, the holy grail of academics, consultants, and business and IT managers has been to show that what a company spends on IT has a direct impact on its performance. Early efforts to do this, such as those trying to link various measures of IT input (e.g., budget dollars, number of PCs, number of projects) with various measures of business performance (e.g., profit, productivity, stock value) all failed to show any relationship at all (Marchand et al. 2000). Since then, everyone has prop- erly concluded that the relationship between what is done in IT and what happens in the business is considerably more complex than these studies first supposed. In fact, many researchers would suggest that the relationship is so filtered through a variety of “conversion effects” (Cronk and Fitzgerald 1999) as to be practically impossible to demonstrate. Most IT managers would agree. They have long argued that technology is not the major stumbling block to achieving business performance; it is the business itself—the processes, the managers, the culture, and the skills—that makes the differ- ence. Therefore, it is simply not realistic to expect to see a clear correlation between IT and business performance at any level. When technology is successful, it is a team effort, and the contributions of the IT and business components of an initiative cannot and should not be separated.
Nevertheless, IT expenditures must be justified. Thus, most companies have concentrated on determining the “business value” that specific IT projects deliver. By focusing on a goal that matters to business (e.g., better information, faster transaction processing, reduced staff), then breaking this goal down into smaller projects that IT can affect directly, they have tried to “peel the onion” and show specifically how IT delivers value in a piecemeal fashion. Thus, a series of surrogate measures are usually used to demonstrate IT’s impact in an organization. (See Chapter 1 for more details.)
More recently, companies are taking another look at business performance met- rics and IT. They believe it is time to “put the onion back together” and focus on what
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and C. Street. “Linking IT to Business Metrics.” Journal of Information Science and Technology 1, no. 1 (2004): 13–26. Reproduced by permission of the Information Institute.
1
27
28 Section I • Delivering Value with IT
really matters to the enterprise. This perspective argues that employees who truly understand what their business is trying to achieve can sense the right ways to per- sonally improve performance that will show up at a business unit and organizational level. “People who understand the business and are informed will be proactive and ... have a disposition to create business value every day in many.
Fueling Innovation through InformationTechnology in SMEsb.docxhanneloremccaffery
Fueling Innovation through Information
Technology in SMEs*
by Clay Dibrell, Peter S. Davis, and Justin Craig
This paper describes a study that investigates the mediating effects of information
technology (IT) on the relationships among product and process innovations and firm
performance (measured in multiple profitability and growth rate metrics). Using
structural equation modeling on a sample of 397 small and medium-sized enterprises
(SMEs), we find evidence that (1) increases on the strategic emphasis placed on
innovation, both product and process, positively impact the prominence managers
place on IT; (2) the impact of innovation (both product and process) on performance
(both profitability and growth) is primarily indirect, felt via the mechanism of the
importance managers place on IT; and (3) an increased emphasis on IT abets
managers’ perception of their firms’ performance, as compared with that observed
among peer firms (other SMEs).
A commitment to innovation has long
been considered to be important to the
success of entrepreneurial ventures and
small firms (Fiol 1996). Research has
shown that innovation stimulates ven-
tures’ growth (e.g., Wolff and Pett
2006; Motwani et al. 1999; Hax and
Majluf 1991) and also provides a key
source of competitive advantage in the
absence of scale economies (Lewis et al.
2002). Considered from the resource-
based view of the firm (Barney 1991),
successful innovation may be dependent
on the presence of other organization-
*The authors wish to thank Don Neubaum and the anonymous reviewers for their helpful
comments and direction. Financial support was provided by the Austin Family Business
Program in the College of Business at Oregon State University.
Clay Dibrell is associate professor of strategic management in the College of Business at
Oregon State University and research fellow at Bond University.
Peter S. Davis is professor and chair of the Department of Management in the Belk College
of Business at the University of North Carolina–Charlotte.
Justin Craig is associate professor of family business and entrepreneurship at Bond
University.
Address correspondence to: Clay Dibrell, 200 Bexell Hall, College of Business, Oregon State
University, Corvallis, OR 97331. Tel: (541) 737-6061. E-mail: [email protected]
Journal of Small Business Management 2008 46(2), pp. 203–218
DIBRELL, DAVIS, AND CRAIG 203
mailto:[email protected]
specific skills and capabilities. For
example, substantial evidence has begun
to accumulate that suggests that appro-
priate strategic employment of informa-
tion technology (IT) may be essential
in translating strategies (e.g., innovation)
into enhanced firm performance (e.g.,
Ray, Muhanna, and Barney 2005;
Sakaguchi, Nicovich, and Dibrell 2004).
A direct linkage between IT and firm
performance was established by Powell
and Dent-Micallef (1997). Bharadwaj
(2000) found that high IT-capable firms
(those that invest heavily in IT) outper-
form competitors that do not inve ...
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVES...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets
(independent variables) and some specified benefits/value creation (dependent variables), beyond
Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175
questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana,
and analyzed,thefollowing findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to
help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be
innovative with IT. Again, the results showed that most of the complementary assets employed in this
work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the
strongest positive relationships was found to exist between “supportive organizational culture that
values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
This document presents a study that develops a model to assess the value-based contribution of information technology (IT) to firm performance. The study aims to address contradictory findings from prior research on the productivity paradox by taking a process-oriented approach. The model proposes that IT business value can be measured through its impact on processes within a firm's value chain. Survey data from 180 executives is used to test the model, with structural equation modeling confirming that perceptual ratings of IT's impact on value chain processes can provide a measure of IT business value at the organizational level.
This document discusses connecting IT strategy to business value. It argues that IT should not be seen merely as an infrastructure utility, but rather as a strategic enabler. The value of IT is negotiated between IT providers and business users. For IT to have strategic value, it must be integrated with business needs and processes. The document examines different views on IT strategy and discusses balancing operational effectiveness with strategic positioning of IT.
This document summarizes a study that explores the relationship between IT outsourcing (ITO) and business and IT alignment. The study aims to provide recommendations for how outsourcing relationships can support business and IT alignment. Through a literature review and analysis of four case studies, the study found that higher levels of motivation for outsourcing, relationship between outsourcer and provider, and alignment maturity of the outsourcer can lead to positive effects of ITO on business and IT alignment. Organizational turbulence on either side can negatively impact the relationship. Service providers also tended to assess relationships more positively than outsourcers.
If the CIO is to be valued as a strategic actor, how can he bring.docxTatianaMajor22
If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Is there a lack of information on strategic planning? Nope. I think the process of planning is poorly understood, and rarely endorsed. The reasons are simple enough. Planning requires a commitment of resources (time, talent, money); it requires insight; it requires a total immersion in the corporate culture. While organizations do plan, planning is invariably attached to the budget process. It is typically here that the CIO lays out his/her vision for the coming year Now a few years ago authors began writing on the value of aligning IT purpose to organizational purpose. They wrote at a time when enterprise architectural planning was fairly new, and enterprise resource management was on the lips of every executive. My view is that alignment is a natural process driven by the availability of the tools to accomplish it. Twenty years ago making sense of IT was more about processing power, and database management. We are in a new age of IT, and it is the computer that is the network, not the network as an independent self-contained exchange of information. If you will spend some time reviewing the basic materials I provided on strategic planning and alignment, we can begin our discussions for the course. Again, here is the problem I would like for us to tackle: If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Most of the articles I bundled together for this week are replete with tables and charts. These can be a heavy read. Your approach should be to review these articles for the "big ideas" or lessons that are take away. I think these studies are significant enough that we will conclude our first week with an understanding of the roles between executive leaders, and how they see Information Technology playing a role in shaping a business strategy.
Read the articles to answer the question. Please No Plagerism or verbatim but you are allowed to quote from the article.
Achieving and Sustaining
Business-IT Alignment
Jerry Luftman
Tom Brier
I
n recent decades, billions of dollars have been invested in intormation tech-
nology (IT). A key concern of business executives is alignment—applying IT
in an appropriate and timely way and in harmony with business strategies,
goals, and needs. This issue addresses both how IT is aligned with the busi-
ness and how the business should be aligned with IT Frustratingly, organizations
seem to find it difficult or impossible to harness the power of information tech-
nology for their own long-term benefit, even though there is worldwide evi-
dence that IT has the power to transform whole industries and markets.' How
can companies.
JUSTIFICATION OF, AND BENEFITS REALIZATION BEYOND IT INVESTMENTS: ANALYSIS F...ijmvsc
This work looked at the justification of IT investments in general, to draw important conclusions that could
be beneficial to IT project managers and professionals, and then zero in on the angle of benefits realization
beyond IT investments.About 30 categories/sets of research outputs or articles out of more than 60 articles
reviewed were used for this work. No primary data was employed for this work. Articles were sourced from
databases such as Google Scholar, Research Gate, Academia.edu, Google search engine, Elsevier, and so
on. The main themes used for the search were IT investments, Justification for IT investments, IT
investments benefit determination, value creation beyond IT investments, and so on. The results showed
that justification is unique to every firm, it is contextual, and so stakeholders must take into consideration
environmental factors, corporate and strategic goals, experience and expertise of stakeholders, and so on,
to design its framework and measures to justify IT investments. Zeroing on benefits realization, two things
run through all the discussions: benefits realization of IT investments must take into consideration the
organization's strategic objectives and that they do not simply emerge, as if by magic. Their realization has
to be planned, delivered, reviewed, and exploited to ensure value realization on a more consistent/constant
basis.
Research articleFactors affecting the successful realisati.docxrgladys1
Research article
Factors affecting the successful realisation
of benefits from systems development
projects: findings from three case studies
Neil F Doherty1, Colin Ashurst2, Joe Peppard3
1The Business School, Loughborough University, Loughborough, UK;
2The Business School, Durham University, Durham, UK;
3Cranfield School of Management, Cranfield, Bedfordshire, UK
Correspondence:
NF Doherty, The Business School, Loughborough University, Loughborough, LE11 3TU, UK.
Tel: þ 44 01509 223328;
Fax: þ 44 01509 223960;
E-mail: [email protected]
Abstract
The return that organisations derive from investments in information systems and
technology continues to disappoint. While there is a very significant body of literature on
the factors that should facilitate a successful outcome from systems development, there is
growing concern that these prescriptions are not having their desired effect. In this paper,
we argue that the success of a systems development project should be measured in terms
of its ability to deliver meaningful benefits, rather than the timely delivery of a technical
artefact, and therefore organisations should adopt an explicit and proactive benefits
realisation approach when investing in IT. Consequently, we sought to explore those
actionable factors that might facilitate the effective realisation of benefits from systems
development initiatives. Three organisations were identified that claimed to adopt a
proactive approach to benefits realisation, and detailed studies of their systems
development practices were conducted. Our analysis found that whilst one organisation
had been successful in its adoption of a benefits realisation perspective, the other two had
not, and this allowed us to identify those factors that helped to explain this difference in
outcomes. In short, this paper makes an important contribution by identifying how a sub-
set of traditional systems success factors might be enhanced, to give them a more explicit
benefits realisation orientation. Moreover, it presents a coherent set of principles that can
be used for deriving other factors and practices.
Journal of Information Technology (2012) 27, 1–16. doi:10.1057/jit.2011.8
Published online 9 August 2011
Keywords: IT development projects; benefits realisation; organisational change; ISD success factors;
value
Introduction
T
he context for the research reported in this paper is the
continued high failure rate of investments in information
systems/information technology (IS/IT): a considerable
amount of time, money, effort and opportunity can be wasted
upon IT investments that ultimately fail to deliver benefits
(Fortune and Peters, 2005; Peppard and Ward, 2005).
Estimates of the level of failure may vary, but over the past
30 years they have tended to stay uncomfortably high. More
specifically, it has been suggested that in the late 1970s only
20% of the projects ‘achieved something like their intended
benefits’ (Eason, 1988), and that by the late 1980s, it .
This document discusses management information systems and their importance to organizational performance and competitive advantage. It provides definitions of management information systems and how they have evolved from basic accounting applications to more advanced decision support systems. The document then discusses various factors related to information technology investments, productivity, and organizational impact, and presents a conceptual model and research methodology for studying the relationships between these factors.
This research essay descriptively details what is meant by Information Technology Strategy and why in increasingly automated business environment of today, successful firms are those that not only have an established IT strategy but also keep updating the same based on changes that may be encountered. Further explained in extreme detail are the reasons that necessitate the need for organizations of today to have an established and implemented IT strategy other than the competition that may be faced from other organizations which have an IT strategy. Also detailed are the values and benefits that may be derived by organizations by having an IT strategy and what qualities and elements of an IT strategy would need to be established in order to derive the maximum amount of value from an IT strategy.
Advantages And Limitations Of Performance Measurement Tools The Balanced Sco...Andrea Porter
This document discusses performance measurement tools, specifically comparing the Balanced Scorecard (BSC) to other tools. It notes that the BSC considers both financial and non-financial metrics to determine organizational performance, representing both a measurement tool and a performance management system. While widely used, the BSC has some limitations in dynamic environments. The document advocates combining various tools and approaches rather than relying solely on one evaluation framework like the BSC, to better align strategy as the business environment changes.
Challenges in Business and IT AlignmentVidur Pandit
The document discusses challenges with aligning business and IT. It provides context on the importance of business-IT alignment and defines key concepts. The phases of the business-IT alignment cycle are also outlined, including plan, model, manage and measure. The goal of alignment is to ensure IT supports business strategies and processes efficiently.
This document discusses aligning IT strategy with business goals. It emphasizes reviewing strategic plans to identify how technology can help achieve goals like becoming a leading home health provider. IT and business strategies should complement each other through collaborative development. Data is collected from staff through surveys and interviews to identify themes like competitiveness. Linking IT performance to business metrics allows evaluating each unit's contributions to overall value. Value-based management and key performance indicators can help consider IT a vital business player.
This published paper aggregates and segments the financial projections of client organizations in multiple industries derived by improving master data quality across the enterprise.
The art of value creation with information technology potentials in business ...Alexander Decker
This document discusses the role of strategic information systems in business value creation. It defines value creation as activities that reduce costs and increase profits through efficiency. Strategic information systems involves using information technology and managerial skills to identify business problems and create solutions that help organizations achieve their objectives. The document analyzes how strategic information systems can help realize value by focusing on business processes and capturing value through technologies like the internet, business intelligence, and collaboration systems. It argues that information systems strategy is important for competitive advantage and should be integrated with business strategy for organizations to effectively create value.
2C h a p t e r1 Developing and Delivering on the it Va.docxBHANU281672
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter 1 • Developing and Delivering on the IT Value Proposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Th.
2C h a p t e r1 Developing and Delivering on the it Va.docxgilbertkpeters11344
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter1 • DevelopingandDeliveringontheITValueProposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Thirty years .
Mr. Bush, a 45-year-old middle school teacher arrives at the emergen.docxaudeleypearl
Mr. Bush, a 45-year-old middle school teacher arrives at the emergency department by EMS ground transport after he experienced severe mid-sternal chest pain at work. On arrival to the ED:
a. What priority interventions would you initiate?
b. What information would you require to definitively determine what was causing Mr. Bush’s chest pain?
.
Movie Project Presentation Movie TroyInclude Architecture i.docxaudeleypearl
Movie Project Presentation: Movie: Troy
Include: Architecture in the movie. Historical research to figure out if the movie did a good job of representing the art historical past of not. Anything in the movie that are related to art or art history. And provide its outline and bibliography (any website source is acceptable as well)
.
Motivation and Retention Discuss the specific strategies you pl.docxaudeleypearl
Motivation and Retention
Discuss the specific strategies you plan to use to motivate individuals from your priority
population to participate in your program and continue working on their behavior change.
You can refer to information you obtained from the Potential Participant Interviews. You
also can search the literature for strategies that have been successfully used in similar
situations; be sure to cite references in APA format.
.
Mother of the Year In recognition of superlative paren.docxaudeleypearl
The document discusses Facebook's decision in 2015 to change the "like" button on the platform. It describes how Chris Cox, Facebook's chief product officer, led discussions about overhauling the button. The like button had become a blunt tool, and Cox wanted to expand the range of emotions that users could express beyond just "liking" something. This would become the "Reactions" feature, allowing responses like love, haha, wow, sad, and angry. The change took over a year to develop and test before being publicly launched.
Mrs. G, a 55 year old Hispanic female, presents to the office for he.docxaudeleypearl
Mrs. G, a 55 year old Hispanic female, presents to the office for her annual exam. She reports that lately she has been very fatigued and just does not seem to have any energy. This has been occurring for 3 months. She is also gaining weight since menopause last year. She joined a gym and forces herself to go twice a week, where she walks on the treadmill at least 30 minutes but she has not lost any weight, in fact she has gained 3 pounds. She doesn’t understand what she is doing wrong. She states that exercise seems to make her even more hungry and thirsty, which is not helping her weight loss. She wants get a complete physical and to discuss why she is so tired and get some weight loss advice. She also states she thinks her bladder has fallen because she has to go to the bathroom more often, recently she is waking up twice a night to urinate and seems to be urinating more frequently during the day. This has been occurring for about 3 months too. This is irritating to her, but she is able to fall immediately back to sleep.
Current medications:
Tylenol 500 mg 2 tabs daily for knee pain. Daily multivitamin
PMH:
Has left knee arthritis. Had chick pox and mumps as a child. Vaccinations up to
date.
GYN hx:
G2 P1. 1 SAB, 1 living child, full term, wt 9lbs 2 oz. LMP 15months ago. No history of abnormal Pap smear.
FH:
parents alive, well, child alive, well. No siblings. Mother has HTN and father has high cholesterol.
SH:
works from home part time as a planning coordinator. Married. No tobacco history, 1-2 glasses wine on weekends. No illicit drug use
Allergies
: NKDA, allergic to cats and pollen. No latex allergy
Vital signs
: BP 129/80; pulse 76, regular; respiration 16, regular
Height 5’2.5”, weight 185 pounds
General:
obese female in no acute distress. Alert, oriented and cooperative.
Skin
: warm dry and intact. No lesions noted
HEENT:
head normocephalic. Hair thick and distribution throughout scalp. Eyes without exudate, sclera white. Wears contacts. Tympanic membranes gray and intact with light reflex noted. Pinna and tragus nontender. Nares patent without exudate. Oropharynx moist without erythema. Teeth in good repair, no cavities noted. Neck supple. Anterior cervical lymph nontender to palpation. No lymphadenopathy. Thyroid midline, small and firm without palpable masses.
CV
: S1 and S2 RRR without murmurs or rubs
Lungs
: Clear to auscultation bilaterally, respirations unlabored.
Abdomen
- soft, round, nontender with positive bowel sounds present; no organomegaly; no abdominal bruits. No CVAT.
Labwork:
CBC
:
WBC 6,000/mm3 Hgb 12.5 gm/dl Hct 41% RBC 4.6 million MCV 88 fl MCHC
34 g/dl RDW 13.8%
UA:
pH 5, SpGr 1.013, Leukocyte esterase negative, nitrites negative, 1+ glucose; small protein; negative for ketones
CMP:
Sodium 139
Potassium 4.3
Chloride 100
CO2 29
Glucose 95
BUN 12
Creatinine 0.7
GFR est non-AA 92 mL/min/1.73 GFR est AA 101 mL/min/1.73 Calcium 9.5
Total protein 7.6 Bilirubin, total 0.6 Alkaline.
Mr. Rivera is a 72-year-old patient with end stage COPD who is in th.docxaudeleypearl
Mr. Rivera is a 72-year-old patient with end stage COPD who is in the care of Hospice. He has a history of smoking, hypertension, obesity, and type 2 Diabetes. He is on Oxygen 2L per nasal cannula around the clock. His wife and 2 adult children help with his care. Develop a concept map for Mr. Rivera. Consider the patients Ethnic background (he and his family are from Mexico) and family dynamics. Please use the
concept map
form provided.
.
Mr. B, a 40-year-old avid long-distance runner previously in goo.docxaudeleypearl
Mr. B, a 40-year-old avid long-distance runner previously in good health, presented to his primary provider for a yearly physical examination, during which a suspicious-looking mole was noticed on the back of his left arm, just proximal to the elbow. He reported that he has had that mole for several years, but thinks that it may have gotten larger over the past two years. Mr. B reported that he has noticed itchiness in the area of this mole over the past few weeks. He had multiple other moles on his back, arms, and legs, none of which looked suspicious. Upon further questioning, Mr. B reported that his aunt died in her late forties of skin cancer, but he knew no other details about her illness. The patient is a computer programmer who spends most of the work week indoors. On weekends, however, he typically goes for a 5-mile run and spends much of his afternoons gardening. He has a light complexion, blonde hair, and reports that he sunburns easily but uses protective sunscreen only sporadically.
Physical exam revealed: Head, neck, thorax, and abdominal exams were normal, with the exception of a hard, enlarged, non-tender mass felt in the left axillary region. In addition, a 1.6 x 2.8 cm mole was noted on the dorsal upper left arm. The lesion had an appearance suggestive of a melanoma. It was surgically excised with 3 mm margins using a local anesthetic and sent to the pathology laboratory for histologic analysis. The biopsy came back Stage II melanoma.
1. How is Stage II melanoma treated and according to the research how effective is this treatment?
250 words.
.
Moving members of the organization through the change process ca.docxaudeleypearl
Moving members of the organization through the change process can be quite difficult. As leaders take on this challenge of shifting practice from the current state to the future, they face the obstacles of confidence and competence experienced by staff. Change leaders understand the importance of recognizing their moral purpose and helping others to do the same. Effective leaders foster moral purpose by building relationships, considering other’s perspectives, demonstrating respect, connecting others, and examining progress (Fullan & Quinn, 2016). For this Discussion, you will clarify your own moral perspective and how it will impact the elements of focusing direction.
To prepare:
· Review the Adams and Miskell article. Reflect on the measures taken in building capacity throughout the organization.
· Review Fullan and Quinn’s elements of Focusing Direction in Chapter 2. Reflect on aspects needed to build capacity as a leader.
· Analyze the two case examples used to illustrate focused direction in Chapter 2.
· Clarify your own moral purpose, combining your personal values, persistence, emotional intelligence, and resilience.
A brief summary clarifying your own moral imperative.
· Using the guiding questions in Chapter 2 on page 19, explain your moral imperative and how you can use your strengths to foster moral imperative in others.
· Based on Fullan’s information on change leadership, in which areas do you feel you have strong leadership skills? Which areas do you feel you need to continue to develop?
Learning Resources
Required Readings
Fullan, M., & Quinn, J. (2016).
Coherence: The right drivers in action for schools, districts, and systems
. Thousand Oaks, CA: Corwin.
Chapter 2, “Focusing Direction” (pp. 17–46)
Florian, L. (Ed.). (2014).
The SAGE handbook of special education
(2nd ed.). London, England: Sage Publications Ltd.
Chapter 23, “Researching Inclusive Classroom Practices: The Framework for Participation” (389–404)
Chapter 31, “Assessment for Learning and the Journey Towards Inclusion” (pp. 523–536)
Adams, C.M., & Miskell, R.C. (2016). Teacher trust in district administration: A promising line of inquiry. Journal of Leadership for Effective and Equitable Organizations, 1-32. DOI: 10.1177/0013161X1665220
Choi, J. H., Meisenheimer, J. M., McCart, A. B., & Sailor, W. (2016). Improving learning for all students through equity-based inclusive reform practices effectiveness of a fully integrated school-wide model on student reading and math achievement. Remedial and Special Education, doi:10.1177/0741932516644054
Sailor, W. S., & McCart, A. B. (2014). Stars in alignment. Research and Practice for Persons with Severe Disabilities, 39(1), 55-64. doi: 10.1177/1540796914534622
Required Media
Grand City Community
Laureate Education (Producer) (2016c).
Tracking data
[Video file]. Baltimore, MD: Author.
Go to the Grand City Community and click into
Grand City School District Administration Offices
. Revie.
Mr. Friend is acrime analystwith the SantaCruz, Califo.docxaudeleypearl
Mr. Friend is a
crime analyst
with the Santa
Cruz, California,
Police
Department.
Predictive Policing: Using Technology to Reduce Crime
By Zach Friend, M.P.P.
4/9/2013
Nationwide law enforcement agencies face the problem
of doing more with less. Departments slash budgets
and implement furloughs, while management struggles
to meet the public safety needs of the community. The
Santa Cruz, California, Police Department handles the
same issues with increasing property crimes and
service calls and diminishing staff. Unable to hire more
officers, the department searched for a nontraditional
solution.
In late 2010 researchers published a paper that the
department believed might hold the answer. They
proposed that it was possible to predict certain crimes,
much like scientists forecast earthquake aftershocks.
An “aftercrime” often follows an initial crime. The time and location of previous criminal activity helps to
determine future offenses. These researchers developed an algorithm (mathematical procedure) that
calculates future crime locations.1
Equalizing Resources
The Santa Cruz Police Department has 94 sworn officers and serves a population of 60,000. A
university, amusement park, and beach push the seasonal population to 150,000. Department personnel
contacted a Santa Clara University professor to apply the algorithm, hoping that leveraging technology
would improve their efforts. The police chief indicated that the department could not hire more officers.
He felt that the program could allocate dwindling resources more efficiently.
Santa Cruz police envisioned deploying officers by shift to the most targeted locations in the city. The
predictive policing model helped to alert officers to targeted locations in real time, a significant
improvement over traditional tactics.
Making it Work
The algorithm is a culmination of anthropological and criminological behavior research. It uses complex
mathematics to estimate crime and predict future hot spots. Researchers based these studies on
In Depth
Featured Articles
- IAFIS Identifies Suspect from 1978 Murder Case
- Predictive Policing: Using Technology to Reduce
Crime
- Legal Digest Part 1 - Part 2
Search Warrant Execution: When Does Detention Rise to
Custody?
- Perspective
Public Safety Consolidation: Does it Make Sense?
- Leadership Spotlight
Leadership Lessons from Home
Archive
- Web and Print
Departments
- Bulletin Notes - Bulletin Honors
- ViCAP Alerts - Unusual Weapons
- Bulletin Reports
Topics in the News
See previous LEB content on:
- Hostage Situations - Crisis Management
- School Violence - Psychopathy
About LEB
- History - Author Guidelines (pdf)
- Editorial Staff - Editorial Release Form (pdf)
Patch Call
Known locally as the
“Gateway to the Summit,”
which references the city’s
proximity to the Bechtel Family
National Scout Reserve. More
The patch of the Miamisburg,
Ohio, Police Department
prominently displays the city
seal surroun.
Mr. E is a pleasant, 70-year-old, black, maleSource Self, rel.docxaudeleypearl
Mr. E is a pleasant, 70-year-old, black, male
Source: Self, reliable source
Subjective:
Chief complaint:
“I urinate frequently.”
HPI:
Patient states that he has had an increase in urination for the past several years, which seems to be worsening over the past year. He estimates that he urinates clear/light yellow urine approximately every 1.5-2 hours while awake and is up 2-4 times at night to urinate. He states some urgency and hesitancy with urination and feeling of incomplete voiding. He denies any pain or blood. Denies any head trauma. Denies any increase in thirst or hunger. He denies any unintentional weight loss.
Allergies
: NKA
Current Mediations
:
Multivitamin, daily
Aspirin, 81 mg, daily
Olmesartan, 20 mg daily
Atorvastatin, 10 mg daily
Diphenhydramine, 50 mg, at night
Pertinent History:
Hypertension, hyperlipidemia, insomnia
Health Maintenance. Immunizations:
Immunizations up to date
Family History:
No cancer, cardiac, pulmonary or autoimmune disease in immediate family members
Social History:
Patient lives alone. He drinks one cup of caffeinated coffee each morning at the local diner. He denies any nicotine, alcohol or drug use.
ROS:
Incorporated into HPI
Objective:
VS
– BP: 118/68, HR: 86, RR: 16, Temp 97.6, oxygenation 100%, weight: 195 lbs, height: 70 inches.
Mr. E is alert, awake, oriented x 3. Patient is clean and dressed appropriate for age.
Cardiac: No cardiomegaly or thrills; regular rate and rhythm, no murmur or gallop
Respiratory: Clear to auscultation
Abdomen: Bowel sounds positive. Soft, nontender, nondistended, no hepatomegaly
Neuro: CN 2-12 intact
Renal/prostate: Prostate enlarged, non-tender. No asymmetry or nodules palpated
Labs:
Test Name
Result
Units
Reference Range
Color
Yellow
Yellow
Clarity
Clear
Clear
Bilirubin
Negative
Negative
Specific Gravity
1.011
1.003-1.030
Blood
Negative
Negative
pH
7.5
4.5-8.0
Nitrite
Negative
Negative
Leukocyte esterase
Negative
Negative
Glucose
Negative
mg/dL
Negative
Ketones
Negative
mg/dL
Negative
Protein
Negative
mg/dL
Negative
WBC
Negative
/hpf
Negative
RBC
Negative
/hpf
Negative
Lab
Pt’s Result
Range
Units
Sodium
137
136-145
mmol/L
Potassium
4.7
3.5-5.1
mmol/L
Chloride
102
98-107
mmol/L
CO2
30
21-32
mmol/L
Glucose
92
70-99
mg/dL
BUN
7
6-25
mg/dL
Creat
1.6
.8-1.3
mg/dL
GFR
50
>60
Calcium
9.6
8.2-10.2
mg/dL
Total Protein
8.0
6.4-8.2
g/dL
Albumin
4.5
3.2-4.7
g/dL
Bilirubin
1.1
<1.1
mg/dL
Alkaline Phosphatase
94
26-137
U/L
AST
25
0-37
U/L
ALT
55
15-65
U/L
Pt’s results
Normal Range
Units
WBC
9.9
3.4 - 10.8
x10E3/uL
RBC
4.0
3.77 - 5.28
x10E6/uL
Hemoglobin
11.5
11.1 - 15.9
g/dL
H.
Motor Milestones occur in a predictable developmental progression in.docxaudeleypearl
Motor Milestones occur in a predictable developmental progression in young children. They begin with reflexive movements that develop into voluntary movement patterns. For the motor milestone of independent walking, there are many precursor reflexes that must first integrate and beginning movement patterns that must be learned. Explain the motor progression of walking in a child, starting with the integration of primitive reflexes to the basic motor skills needed for a child to walk independently. Discuss at which time frame each milestone occurs from birth to walking (12-18 months of age). What are some reasons why a child could be delayed in walking? At what age is a child considered delayed in walking and in need of intervention? What interventions are available to children who are having difficulty walking? Please be sure to use APA citations for all sources used to formulate your answers.
.
Most women experience their closest friendships with those of th.docxaudeleypearl
Most women experience their closest friendships with those of the same sex. Men have suffered more of a stigma in terms of sharing deep bonds with other men. Open affection and connection is not actively encouraged among men. Recent changes in society might impact this, especially with the advent of the meterosexual male. “The meterosexual male is less interested in blood lines, traditions, family, class, gender, than in choosing who they want to be and who they want to be with” (Vernon, 2010, p. 204).
In this week’s reading material, the following philosophers discuss their views on this topic: Simone de Beauvoir, Thomas Aquinas, MacIntyre, Friedman, Hunt, and Foucault. Make sure to incorporate their views as you answer each discussion question. Think about how their views may be similar or different from your own. In at least 250 words total, please answer each of the following, drawing upon your reading materials and your personal insight:
To what extent do you think women still have a better opportunity to forge deeper friendships than men? What needs to change to level the friendship playing field for men, if anything?
How is the role of the meterosexual man helping to forge a new pathway for male friendships?
.
Most patients with mental health disorders are not aggressive. Howev.docxaudeleypearl
Most patients with mental health disorders are not aggressive. However, it is important for nurses to be able to know the signs and symptoms associated with the five phases of aggression, and to appropriately apply nursing interventions to assist in treating aggressive patients. Please read the case study below and answer the four questions related to it.
Aggression Case Study
Christopher, who is 14 years of age, was recently admitted to the hospital for schizophrenia. He has a history of aggressive behavior and states that the devil is telling him to kill all adults because they want to hurt him. Christopher has a history of recidivism and noncompliance with his medications. One day on the unit, the nurse observes Christopher displaying hypervigilant behaviors, pacing back and forth down the hallway, and speaking to himself under his breath. As the nurse runs over to Christopher to talk, he sees that his bedroom door is open and runs into his room and shuts the door. The nurse responds by attempting to open the door, but Christopher keeps pulling the door shut and tells the nurse that if the nurse comes in the room he will choke the nurse. The nurse responds by calling other staff to assist with the situation.
1. What phase of the aggression cycle is Christopher in at the beginning of this scenario? What phase is he in at the end the scenario? (State the evidence that supports your answers).
2. What interventions could have been implemented to prevent Christopher from escalating at the beginning of the scenario?
3. What interventions should the nurse take to deescalate the situation when Christopher is refusing to open his door?
4. If a restrictive intervention (restraint/seclusion) is used, what are some important steps for the nurse to remember?
SCHOLAR NURSING ARTICLE>>>APA FORMAT>>>
.
Most of our class readings and discussions to date have dealt wi.docxaudeleypearl
Most of our class readings and discussions to date have dealt with the issue of ethics and ethical behavior. Various philosophers have made contributions to jurisprudence including how to apply ethical principles (codes of conduct?) to ethical dilemma.
Your task is to watch the Netflix documentary ‘The Social Dilemma.’ If you cannot currently access Netflix it offers a free trial opportunity, which you can cancel after viewing the documentary. Should this not be an option for whatever reason, then please email me and we will create an alternative ethics question.
DUE DATE: Tuesday, Sept. 29, 2020 by noon
SEND YOUR NO MORE THAN 5 PAGE DOUBLE SPACED RESPONSE TO MY EMAIL ADDRESS. LATE PAPERS SUBJECT TO DOWNGRADING
As critics have written, the documentary showcases ways our minds are twisted and twirled by social media companies like Facebook, Twitter, and Google through their platforms and search engines, and the why of what they are doing, and what must be done to stop it.
After watching the movie, respond to the following questions in the order given. Use full sentences and paragraphs, and start off each section by stating the question you are answering. Be succinct.
What are the critical ethical issues identified?
What concerns are raised over the polarization of society and promulgation of fake news?
What is the “attention-extraction model” of software design and why worry?
What is “surveillance capitalism?”
Do you agree that social media warps your perceptions of reality?
Who has the power and control over these social media platforms – software designers, artificial intelligence (Ai), CEOs of media platforms, users, government?
Are social media platforms capable of self-regulation to address the political and ethical issues raised or not? If not, then should government regulate?
What other actions can be taken to address the basic concern of living in a world “…where no one believes what’s true.”
.
Most people agree we live in stressful times. Does stress and re.docxaudeleypearl
Stress may contribute to illness according to some research cited in textbooks. The question asks whether stress and reactions to stress can lead to health issues, and opinions should be supported by evidence from course materials. References in APA format are required.
Most of the ethical prescriptions of normative moral philosophy .docxaudeleypearl
Most of the ethical prescriptions of normative moral philosophy tend to fall into one of the following three categories: deontology, consequentialism, and virtue ethics. These categories in turn put an emphasis on different normative standards for judging what constitutes right and wrong actions.
Moral psychologists and behavioral economists such as Jonathan Haidt and Dan Ariely take a different approach: focusing not on some normative ethical framework for moral judgment, but rather on the psychological foundations of moral intuition and on the limitations that our human frailty places on real-world honesty, decency, and ethical commitments.
In this context, write a short essay (minimum 400 words) on what you see as the most important differences between the traditional normative philosophical approaches and the more recent empirical approach of moral psychology when it comes to ethics. As part of your answer also make sure that you discuss the implications of these differences.
Deadline reminder:
this assignment is
due on June 14th
. Any assignments submitted after that date will lose 5 points (i.e., 20% of the maximum score of 25 points) for each day that they are submitted late. Accordingly, after June 14th, any submissions would be worth zero points and at that time the assignment inbox will close.
.
Most healthcare organizations in the country are implementing qualit.docxaudeleypearl
Most healthcare organizations in the country are implementing quality improvement programs to save lives, enhance customer satisfaction, and reduce the cost of healthcare services. Limited human and material resources often undermine such efforts. Zenith Hospital in a rural community has 200 beds. Postsurgical patients tend to contract infections at the surgical site, requiring extended hospitalization. Mr. Jones—75 years old—was admitted to Zenith Hospital for inguinal hernia repairs. He was also hypertensive, with a compromised immune system. Two days after surgery, he acquired an infection at the surgical site, with elevated temperature, and then he developed septicemia. His condition worsened, and he was moved to isolation in the intensive care unit (ICU). A day after transfer to the ICU, he went into ventricular arrhythmia and was placed on a respirator and cardiac monitoring machine. Intravenous fluids, antibiotics, and antipyretics could not bring the fever down, and blood analysis continued to deteriorate.
The hospital infection control unit got involved. The team confirmed that postsurgical infections were on the increase, but the hospital was unable to identify the sources of infection. The surgery unit and surgical team held meetings to understand possible sources of infection. The team leader had earlier reported to management that they needed to hire more surgical nurses, arguing that nurses in the unit were overworked, had to go on leave, and often worked long hours without break.
Mr. Jones’ family members were angry and wanted to know the source of his infection, why he was on the respirator in isolation, and why his temperature was not coming down. Unfortunately, his condition continued to deteriorate. His daughter invited the family’s legal representative to find out what was happening to her father and to commence legal proceedings.
Then, the healthcare manager received information that two other patients were showing signs of postsurgical infection. The healthcare manager and care providers acknowledged the serious quality issues at Zenith Hospital, particularly in the surgical unit. The healthcare manager wrote to the Chairman of the Hospital Board, seeking approval to implement a quality improvement program. The Board held an emergency meeting and approved the manager’s request. The healthcare manager has invited you to support the organization in this process.
Please address the following questions in your response:
What are successful approaches for gaining a shared understanding of the problem?
How can effective communication be implemented?
What is a qualitative approach that helps in identifying the quality problem?
What tools can provide insight into understanding the problem?
In quality improvement, what does appreciative inquiry help do?
What is a benefit of testing solutions before implementation?
What is a challenge that is inherent in the application of the plan, do, study, act (PDSA) method?
What .
More work is necessary on how to efficiently model uncertainty in ML.docxaudeleypearl
More work is necessary on how to efficiently model uncertainty in ML and NLP, as well as how to represent uncertainty resulting from big data analytics.
Pages - 4
Excluding the required cover page and reference page.
APA format 7 with an introduction, a body content, and a conclusion.
No Plagiarism
.
Mortgage-Backed Securities and the Financial CrisisKelly Finn.docxaudeleypearl
Mortgage-Backed Securities and the Financial Crisis
Kelly Finn
FNCE 4302
Mortgage-Backed Securities (MBS) are “pass-through” bundles of housing debt sold as investment vehicles
A mortgage-backed security, MBS, is a type of asset-backed security that pays investors regular payments, similar to a bond. It gets the title as a “pass-through” because the security involves several entities in the origination and securitization process (where the asset is identified, and where it is used as a base to create a new investment instrument people can profit off of).
Key Players involved in the MBS Process
[Mortgage] Lenders: banks who sell mortgages to GSE’s
GSE: Government Sponsored Entities created by the US Government to make owning property more accessible to Americans
1938: Fannie Mae (FNMA): Federal National Mortgage Assoc.
1970: Freddie Mac (FHLMC): Federal Home Loan Mortgage Corp.
Increase mortgage borrowing
Introduce competitor to Fannie Mae
1970: Ginnie Mae (GNMA): Government National Mortgage Assoc.
US Government: Treasury: implicit commitment of providing support in case of trouble
The several entities involved in the process make MBS a “pass-through”. Here we have 3 main entities that we’ll call “Key Players” for the purpose of this presentation which aims to provide you with a basic and simple explanation of MBS and their role in the financial crisis.
GSE’s created by the US Government in 1938
Part of FDR’s New Plan during Great Depression
Purpose: make owning property more accessible to more Americans
GSE (ex. Fannie Mae) buys mortgages (debt) from banks, & then pools mortgages into little bundles investors can buy (securitization)
Bank’s mortgage is exchanged with GSE’s cash
Created liquid secondary market for mortgages
Result:
1) Bank has more cash to lend out to people
2) Now all who want to a house (expensive) can get the money needed to buy one!
Where MBS came from & when
Yay for combatting homelessness and increasing quality of life for the common American!
Thanks Uncle Sam!
MBS have been around for a long time. Officially in the US, they have their origins in government. During the Great Depression in the 1930s, President Franklin Delano Roosevelt signed into creation Fannie Mae that was brought about to help ease American citizen’s difficulty in becoming homeowners. The sole purpose of a GSE thus was to not make profit, but to promote citizen welfare in regards to housing. Seeing that it was created by regulatory government powers, it earned the title of Government Sponsored Entity, which we will abbreviate as GSE. 2 other GSE’s in housing were created in later decades like Freddie Mae, to further stimulate the mortgage market alongside Fannie, and Ginnie which did a similar thing but only for certain groups of people (Veterans, etc) and to a much smaller scale.
How MBS works: Kelly is a homeowner looking to borrow a lot of money
*The Lender, who issued Kelly the mor.
Moral Development Lawrence Kohlberg developed six stages to mora.docxaudeleypearl
Moral Development:
Lawrence Kohlberg developed six stages to moral behavior in children and adults. Punishment and obedience orientation, interpersonal concordance, law and order orientation, social contract orientation, and universal ethics orientation. All or even just one of these stages will make a good topic for your research paper or you could just do the research paper on Kohlberg.
.
CapTechTalks Webinar Slides June 2024 Donovan Wright.pptxCapitolTechU
Slides from a Capitol Technology University webinar held June 20, 2024. The webinar featured Dr. Donovan Wright, presenting on the Department of Defense Digital Transformation.
Elevate Your Nonprofit's Online Presence_ A Guide to Effective SEO Strategies...TechSoup
Whether you're new to SEO or looking to refine your existing strategies, this webinar will provide you with actionable insights and practical tips to elevate your nonprofit's online presence.
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
A Visual Guide to 1 Samuel | A Tale of Two HeartsSteve Thomason
These slides walk through the story of 1 Samuel. Samuel is the last judge of Israel. The people reject God and want a king. Saul is anointed as the first king, but he is not a good king. David, the shepherd boy is anointed and Saul is envious of him. David shows honor while Saul continues to self destruct.
Gender and Mental Health - Counselling and Family Therapy Applications and In...PsychoTech Services
A proprietary approach developed by bringing together the best of learning theories from Psychology, design principles from the world of visualization, and pedagogical methods from over a decade of training experience, that enables you to: Learn better, faster!
RESEARCH NOTEHOW INFORMATION TECHNOLOGY STRATEGY ANDINVE.docx
1. RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]}
{[email protected]}
In this paper, we develop conjectures for understanding how
information technology (IT) strategy and IT
investments jointly influence profitability and the market value
of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to
emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are
pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT
investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with
a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT
strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm
performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-
emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis
2. firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between
revenue expansion and cost reduction, but at
higher levels of IT investment, dual-emphasis in IT strategy or
IT strategic ambidexterity increasingly pays off.
Keywords: Information technology strategic emphasis, IT
ambidexterity, IT strategic ambidexterity, firm
performance, profitability, IT investments, revenue growth, cost
reduction, dual emphasis
Introduction1
Firms spend significant sums of money on information tech-
nology (IT) resources, yet they are often challenged in
developing appropriate strategies to direct these resources to
realize business value (for a discussion, see Kohli and
Devaraj 2004). Previous research has studied either the im-
pact of IT investments on firm performance (e.g., Barua and
Mukhopadhyay 2000; Dedrick et al. 2003; Hoadley and Kohli
2014; Kohli and Devaraj 2003; Kohli et al. 2012) or the effect
of IT strategic emphasis on firm performance (e.g., Leidner et
al. 2011; Oh and Pinsonneault 2007; Tallon 2007; Tallon et
al. 2000). However, few studies focus on the effect of IT
investments and IT strategic emphasis simultaneously. Given
that profit is equal to revenue minus cost, it is clear that there
are three strategic paths from IT to firm performance: IT can
be used to (1) reduce costs by improving productivity and
efficiency; (2) increase revenues by fully exploiting oppor-
tunities through existing customers, channels, and products/
services and by finding or creating new customers, channels,
and products/services; or (3) reduce costs and increase
revenues simultaneously. What is not clear is the relative
degree to which these strategies and IT investments jointly
influence firm performance. In other words, despite signifi-
3. cant progress in the literature with regard to understanding the
business value of IT, little is known about how IT strategy
moderates the relationship between IT investments and firm
performance.
1Rajiv Kohli was the accepting senior editor for this paper.
Andrew Burton-
Jones served as the associate editor.
MIS Quarterly Vol. 40 No. 1, pp. 223-245/March 2016 223
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
This study seeks to answer the following research question:
How do IT strategic emphasis and investments in IT resources
affect firm performance? To answer this question, we pro-
pose conjectures that link IT strategy and IT investments with
firm performance. Although firm performance is a multi-
dimensional concept (Richard et al. 2009), following recent
work (Kohli et al. Ow 2012), we use two complementary
measures of firm performance in this study (profitability and
market value) which relate to both fundamentals and stock
market assessment (for a discussion, see Blanchard et al.
1993; Henwood 1997). We empirically test the conjectures
using archival data from more than 300 U.S. firms.
Our work is related to but distinct from prior research linking
IT investments with profitability and Tobin’s Q (Bharadwaj
et al. 1999; Kohli et al. 2012; Mithas et al. 2012; Tafti et al.
2013) because we also consider the effect of IT strategy, per-
haps for the first time using a data set that has information on
both IT investments and IT strategy. Our contribution is to
show that the firm’s IT strategic emphasis moderates the
4. relationship between IT investments and firm performance;
firms with a dual emphasis have higher profitability and
market value at higher levels of IT investments. In other
words, successful dual IT emphasis appears to require higher
levels of IT investments. A key insight from our results is
that IT investments and IT strategy should not be viewed
separately from each other and that firms need to synchronize
their IT investment levels and their IT strategies for improved
performance. The study has implications for firms as they
consider adopting dual strategies in increasingly turbulent
markets. Thus, this study not only answers an interesting and
managerially relevant empirical research question but also
provides directions for motivating a program of research to
clarify and elaborate the findings through further theoretical
or empirical work.
Background and Theory
Background
Our review of prior literature suggests that despite much pro-
gress in the business value of IT literature, two opportunities
for contributions remain. First, although prior studies have
discussed the relationship between IT strategy and perfor-
mance, and IT investments and performance, few studies
focus on how IT strategic emphasis and investment level
jointly affect performance. We define IT strategic emphasis
as the dominant strategic objective that the firm chooses to
emphasize in its IT strategy, which can be revenue expansion,
cost reduction, or a dual-emphasis in which both goals are
pursued. Other studies have used other terms such as IT
strategic orientation and IT strategic focus to refer to similar
ideas. Among prior information systems (IS) research on the
direct effects of strategic emphasis on firm performance,
Tallon et al. (2000) find that executives in firms with more
5. focused IT goals (e.g., operations focus, market focus, dual
focus) perceive greater payoffs from IT across the value
chain. Subsequently, Tallon (2007) uses Treacy and
Wiersema’s (1993) typology (operational excellence,
customer intimacy, and product leadership) and finds that IT
business value is the highest in firms with a multifocused
business strategy and lowest in those with a single focus. Oh
and Pinsoneault (2007) study the strategic value of IT in terms
of the deployment of IT applications (cost reduction, quality
improvement, and revenue growth) and find that contingency
approaches better explain the impact of cost-related
applications while a resource-centered perspective better
predicts the impact of IT on revenue and perceived
profitability; however, they do not study the effect of dual or
mixed emphases. Leidner et al.’s (2011) exploratory results
suggest that IS ambidextrous firms (firms pursuing an IS
innovator and an IS conservative strategy at the same time)
had higher perceived organizational performance. None of
these studies investigates how IT strategic focus moderates
the relationship between IT investments and firm
performance, which is the focus of the current study.
Second, although prior research in marketing provides useful
insights for the effect of strategic emphases in terms of quality
strategy or customer focus on firm performance, the extent to
which their findings apply to IT strategy is an open empirical
question. For example, Rust et al. (2002) show that firms
with a revenue growth emphasis in their quality strategy
outperform firms with a cost reduction emphasis, and firms
with a primary emphasis on either revenue growth or cost
reduction outperform firms that attempt a dual emphasis.
Further research (Rust et al. 2016) shows that a revenue
emphasis and cost emphasis are cultivated in different ways,
with a revenue emphasis propagating “bottom up” and a cost
emphasis propagating “top down.” These results illustrate the
complexities of quality management, and are generally con-
6. sistent with the notion of trade-offs among different strategic
emphases in the strategy literature (Porter 1980). Mittal et al.
(2005) study the moderating effect of dual emphasis on the
association between customer satisfaction and long-term
performance and report that association between customer
satisfaction and Tobin’s Q is positive and relatively stronger
for firms that successfully achieve a dual emphasis.
With this backdrop, our work seeks to advance our under-
standing of how IT strategic emphasis and investments in IT
resources affect firm performance. We conceptualize IT
strategy in terms of revenue focus and cost focus. Our
approach is consistent with recent studies that have articulated
224 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
strategic focus in terms of objective metrics, such as revenues
or costs in a firm’s income statement, to more directly assess
the impact of such cost- or revenue-focused strategies on firm
performance (Kohli 2007; Oh and Pinsonneault 2007; Rust et
al. 2002). Chief information officers (CIOs) also find this
revenue and cost typology more useful, as reflected in
comments by AstraZeneca’s CIO (Hickins 2012):
The key to winning approval from executive man-
agement and boards…is to talk about IT projects in
terms of the business opportunities they afford.
“Are you going to generate additional revenue or are
you going to reduce the cost structure” of the
organization.
7. Recent IS research has acknowledged this need to use
business-oriented metrics as IT increasingly takes on a more
strategic role in corporations, and research suggests that use
of business terms “helps IT personnel focus even more clearly
on business value” (Mitra et al. 2011, p. 57). Besides, such
objective metrics lend themselves for better target-setting and
monitoring of progress to enable timely corrective actions that
are directly tied to firm performance.
Although IT, being a general-purpose technology, can be
viewed as being capable of both increasing revenues and
reducing costs, does this mean that firms no longer have to
choose a strategic emphasis? Choosing a particular strategy
implies making some trade-offs (Hindo 2007; Skinner
1986)—that is, choosing some goals and functionalities while
forsaking others in the hope that the overall combination of
choices will ensure a better fit for organizational activities in
the value chain and will make that fit less replicable for com-
petitors (Porter 1996). Accordingly, firms often choose
between revenue expansion or cost reduction in their strategic
IT emphasis. For example, the CIO of FedEx, Robert Carter,
contrasts FedEx’s approach to IT with that of UPS in the
following way:
We tend to focus slightly less on operational tech-
nology. We focus a little more on revenue-gener-
ating, customer-satisfaction-generating, strategic-
advantage technology. The key focus of my job is
driving technology that increases the top line
(Colvin 2006).
In other words, in Carter’s view, FedEx has a revenue
emphasis while UPS has a cost emphasis. Kohli’s (2007)
work with UPS suggests that the company may be using IT
for revenue growth as well. However, at the 2014 Frontiers
in Service Conference, Romaine Seguin, President of UPS
8. Americas Region, indicated in a question-and-answer session
following her keynote presentation that the FedEx (revenue
emphasis) versus UPS (cost emphasis) distinction was
essentially correct, lending credence to Carter’s view. There
are other firms, such as Johnson & Johnson (Mithas and
Agarwal 2010) and Coca-Cola (see Levin 2013), in which
CIOs have tried to emphasize revenue growth in their IT
strategy. As we have noted, FedEx and UPS do not have to
restrict themselves to either revenue growth or cost reduction;
alternatively, they can adopt a dual emphasis.
Consider some examples. While customer relationship man-
agement (CRM) systems can enable some cost savings if they
help reduce the costs of maintaining customer relationships,
the primary reason for deploying these systems is often to
increase revenues by either attracting new customers or
enabling cross-selling, upselling, or repeat sales from existing
customers (Mithas et al. 2005, 2016; Saldanha et al. 2016).
If firms use CRM systems to help with revenue growth and
cost reduction in equal measure, then such an approach could
be characterized as a dual-focus investment. Likewise, in an
academic setting, systems used to maintain alumni develop-
ment and relationships may be characterized primarily as
revenue enhancing, while systems related to the automation
of class scheduling or course bidding systems (as opposed to
manual processes) can be viewed as cost reducing (Kohli and
Melville 2009).
Among cost-focused applications, firms often use reverse
auctions and many other supply chain management appli-
cations primarily to reduce their procurement costs (Mithas
and Jones 2007). As another example of a cost-focused
project, UPS linked bar-code data on its packages (called
Package Level Detail) but retained the capability to provide
seamless tracking information to its customers while out-
9. sourcing some rural deliveries to the U.S. Postal Service
(USPS) to lower its overall costs (Kohli 2007). A similar
opportunity for cost reduction was provided by UPS’s Geo-
graphical Information Systems, which enabled the firm to get
its customers to do some data entry themselves, further
reducing UPS’s costs. UPS also used its integrated supply
chain assets to do customers’ work for them, which helped
realize revenue opportunities; in this case, we could charac-
terize the investment as being revenue-focused (Kohli 2007).
It is also likely that some systems can initially be deployed for
their cost-saving potential or to streamline internal processes,
but later they may provide revenue benefits. For example,
UPS’s Delivery Intercept Service, which has the capability to
locate and intercept any package within 15 minutes, was ini-
tially deployed to improve UPS’s internal processes through
the use of XML, but it also enabled revenue growth over time
through additional fee-based services (Kohli 2007).
We argue that it is not so much which applications firms use
but rather what their strategic objectives are for deploying
MIS Quarterly Vol. 40 No. 1/March 2016 225
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
those applications, in that managerial beliefs and strategic
posture shape an organization’s IT governance and manage-
ment of IT projects to create business value. This logic
applies to IT assets, which are mostly general in nature and,
with some customization and appropriate changes in business
processes, training, and incentive structures, can be targeted
to achieve strategic objectives defined by managers. These
changes in business processes and reengineering efforts are
10. often shaped by the firm’s overarching IT strategic objectives
(Barua et al. 1996; Cederlund et al. 2007; Kohli and Grover
2008; Kohli and Hoadley 2006; Kohli and Johnson 2011). In
other words, while any individual IT system presents potential
opportunities to reduce costs or to enhance revenue, or both,
we argue that it is perhaps more useful to think of the
portfolio of IT applications that firms want to create to
operationalize their strategic emphasis by instantiating
necessary configurations of individual IT applications.
Why IT Strategic Emphasis Moderates the
Relationship Between IT Investments and
Firm Performance
To understand how IT strategic emphasis and IT investments
jointly influence profitability and market value, we first
articulate why we expect a firm’s IT strategic emphasis to
affect firm performance at typical levels of IT investments.
A firm’s strategic emphasis affects the firm’s choices with
respect to the types of technologies and applications it
acquires and the types of governance processes and firm
performance metrics it uses. The comment of the CIO of
FedEx, referred to previously, provides support for this idea
(see Colvin 2006). We recognize that, ultimately, any
strategy needs to be instantiated through appropriate combina-
tions of IT systems to result in firm performance. In other
words, strategy execution can be viewed as the actualization
of a specific configuration of systems.
We argue that a dual emphasis in IT strategy may lead to
better firm performance than a single emphasis in IT strategy,
despite some risks in executing a dual-emphasis strategy. We
draw on prior theories in the IS literature such as the resource-
based view, the accounting literature (Dehning et al. 2006),
and the emerging literature on ambidexterity which empha-
sizes the power of stretch targets (Bartlett and Ghoshal 1995;
11. Birkinshaw and Gibson 2004; Gibson and Birkinshaw 2004;
Im and Rai 2008; Markides 2013; Raisch and Birkinshaw
2008) to frame our arguments (see Table 1). We use a
broader conceptualization of ambidexterity here, similar to
such usage by Markides (2013) and Kude et al. (2015), as a
way to frame the simultaneous pursuit of two seemingly
opposing ideas.
First, following RBV (Barua et al. 1996; Barua and Mukho-
padhyay 2000; Piccoli and Ives 2005), a dual-emphasis IT
strategy (compared with either a revenue- or a cost-emphasis
IT strategy) is likely to lead to potentially superior firm per-
formance due to (1) greater social complexity, (2) greater
causal ambiguity, (2) greater path dependence, and (4) organi-
zational learning. Let us consider these four mechanisms
(social complexity, causal ambiguity, path dependence, and
organizational learning) based on RBV in turn.
• Social Complexity: The social complexity of a dual-
emphasis strategy comes from its relatively ambitious
scope of trying to achieve two goals at the same time.
Because of the complexity and breadth of applications
that a dual-emphasis strategy requires, it is much more
difficult for competitors to replicate the successful execu-
tion of such a strategy than it is to replicate a revenue- or
a cost-emphasis strategy. Prior research in the quality
management literature provides support for this idea. As
Flynn et al. (1995, p. 666) note, “simultaneous pursuit”
of several competitive advantages can lead to a stronger
performance because competing on “several fronts
simultaneously” makes it more difficult for competitors
to replicate such configurations. In addition to the
breadth and variety of IT applications needed in a dual-
emphasis IT strategy, it also requires much more recon-
figuration or restructuring of business processes, thus
contributing to the greater social complexity inherent in
12. such an emphasis.
• Causal Ambiguity: It may be more difficult to disen-
tangle and attribute the advantages resulting from a dual-
emphasis IT strategy from publicly available information
because firms following a dual-emphasis strategy defy
conventional logic and their initiatives and resulting
competitive advantages are harder to classify or are more
ambiguous to decipher for competitors.
• Path Dependence: A dual strategic emphasis may have
an inherent path dependence that is relatively more diffi-
cult to replicate compared with that in either a revenue or
a cost emphasis. For example, for a firm employing a
dual strategic emphasis, cost-reduction efforts may pro-
vide opportunities to target new market segments, such
as the bottom of the pyramid, which in turn could enable
the firm to realize higher revenue growth than if it were
to focus only on cost reduction without a link to its
revenue growth strategy or only on revenue growth by
focusing on premium market segments. Tighter coupling
between strategic options, such as revenue growth and
cost reduction, is much less replicable by competitors
than only one such option. Likewise, firms with a dual
226 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Table 1. Risks and Rewards of a Dual IT Strategic Emphasis
Key Mechanisms Rewards of a Dual IT Strategic Emphasis
Risks of a Dual IT
13. Strategic Emphasis
Relevant
literature
1. Resource-based
view (RBV)
• Social Complexity Much higher social complexity of IT
because
of its role in enhancing the breadth and depth
of relationships. For example, firms will need
to work on both the front end with customers
to create one-to-one customer relationships
through CRM and on the back end with
suppliers to create highly responsive yet low-
cost delivery mechanisms.
Firms may not be able to
realize complex interrela-
tionships among IT
systems.
Resource-based
view (RBV)
(Barney 1991)
• Barriers to the Ero-
sion of Competitive
Advantage
The scope of activities spanning business
processes that touch customers and
suppliers create higher barriers to erosion
along several dimensions simultaneously due
to the cross-functional nature of IT initiatives
14. Cross-functional IT
projects are more prone to
coordination problems.
RBV (Cederlund
et al. 2007;
Grover et al.
2009; Piccoli and
Ives 2005)
• Path Dependence
and/or Asset Stock
Accumulation
Much greater path dependence and/or asset
stock accumulation because IT capabilities
that evolve gradually through integration with
many business processes are likely to be
more tacit and sustainable over a longer time.
Firms may get locked into
poor and incompatible
systems due to inertia.
RBV (Eisenhardt
and Martin 2000;
Teece et al. 1997)
• Organizational
Learning
Higher levels of organizational learning
because learning spans many more inter-
related business processes, routines, and IT
systems that are more tacit, complex, and
15. novel than that for a single-emphasis
strategy.
The organization may
suffer from information
overload, leading to
reduced learning.
RBV (Bharadwaj
2000; Cederlund
et al. 2007;
Dierickx and Cool
1989)
2. Reduced
Diminishing Returns
in Opportunity
Space
Plentiful “low-hanging fruit” to increase
revenues and reduce costs.
Firms may lose the ability
to spot fundamental trans-
formations or avoid
reaching for “higher-
hanging fruit” that may be
rewarding in the long run.
Accounting
literature
(Dehning et al.
2006)
3. Stretch Targets Stretch targets can motivate managers
toward high performance.
16. Too much stretch can be
debilitating.
Ambidexterity
literature (e.g.,
Bartlett and
Ghoshal 1995;
Gibson and
Birkinshaw 2004)
strategic emphasis can use outsourcing and offshoring for
both cost reduction (through arbitrage) and revenue
expansion (through sales in foreign markets by adapting
offerings in those markets) (Ghemawat 2007).
• Organizational Learning: Dual emphasis firms may
have higher levels of organizational learning because
learning spans many more interrelated business pro-
cesses, routines, and IT systems that are more tacit,
complex, and novel than that for a single-emphasis stra-
tegy (Cederlund et al. 2007). Together, the greater social
complexity, causal ambiguity, path dependence, and
organizational learning of a dual-emphasis IT strategy
can provide effective ex post limits to competition and
can protect a firm against resource imitation, transfer,
and substitution (Barney 1991; Wade and Hulland 2004),
thereby making firms with a dual strategic emphasis
more profitable and more valuable.
MIS Quarterly Vol. 40 No. 1/March 2016 227
Mithas & Rust/Influence of IT Strategy and Investments on
17. Firm Performance
Second, a dual emphasis opens up many more “low-hanging”
positive-return investment opportunities than either single
emphasis would, thereby creating more options for profitable
growth (see Dehning et al. 2006). Firms with a dual emphasis
are likely to have lower cycle times in product development,
supply chain management, and customer relationship manage-
ment processes for realizing their revenue and cost targets and
thereby have accelerated cash flows. Finally, dual-emphasis
firms may have less variability in cash flows because their IT-
enabled cash flows have two sources (both revenue growth
and cost reduction), while firms with a primary emphasis on
either revenue growth or cost reduction have only one source
of IT-enabled cash flow (Porter 1985).
Third, a dual strategic emphasis, being more ambitious in its
scope, might provide stretch targets to employees and imple-
mentation partners for higher revenues and lower costs,
thereby improving the chances of getting more from the same
levels of investments (Gibson and Birkinshaw 2004; Kaplan
and Norton 2006). In turn, that will lead to higher levels of
cash flows, profits, and market value.
There are, however, potential risks inherent to a dual strategic
emphasis, and despite the potential of IT to enable firms to
achieve both revenue growth and cost reduction goals, there
are reasons firms may be better off focusing on only one of
these overarching goals. Compared with revenue expansion
or cost reduction strategic emphases, it may be more difficult
for firms to follow a dual strategic emphasis because the latter
entails greater complexity and risk in ensuring fit between all
of the IT-related decisions the firm must make. First,
focusing on two goals simultaneously can be confusing in
terms of target setting and performance metrics that managers
across business units pursue. Second, dual-emphasis firms
18. may end up having a portfolio of IT systems that do not allow
seamless integration of data and information flow. One
example of this comes from the financial services industry:
Some observers argue that one reason for the credit crisis may
be that while firms were pursuing revenue growth from a
business perspective as reflected in their quest for additional
revenues, even with some disregard for prudent risk manage-
ment, they were emphasizing cost reduction in the IT function
(Sviokla and McGilloway 2008). Finally, focusing on two
goals simultaneously can make it difficult for managers to
agree on prioritizing IT projects (Ross and Beath 2002).
Ultimately, whether the advantages of a dual strategic
emphasis outweigh the disadvantages and risks is largely an
empirical question; we do not make a specific prediction at
typical levels of IT investments because we argue that a more
complete understanding of the effect of IT strategic emphasis
requires taking into consideration how a dual strategic
emphasis moderates the relationship between IT investments
and firm performance.
We first consider profitability. Why will a firm’s strategic
emphasis affect the relationship between IT investments and
firm profitability? As we noted previously, a firm’s strategic
emphasis affects its choices with respect to the types of
technologies and applications it acquires, its IT governance
mechanisms, and its metrics for firm performance. Firms with
a dual emphasis may have more diverse IT resources for
revenue growth as well as cost reduction. Managing these
diverse resources requires hiring a larger number of IT em-
ployees and having greater managerial expertise in managing
diverse projects, which in turn may require using a more
diverse network of external IT implementation partners.
Together, managing diverse IT infrastructure elements and IT
human resources in dual-emphasis firms will require a higher
degree of management attention, bandwidth, and focus than
19. if the firm were to focus on only revenue growth or cost
reduction. However, despite these challenges and risks, firms
are likely to benefit more from IT spending if they adopt a
dual strategic emphasis (than if they adopt only a revenue
growth or a cost reduction emphasis) because of differences
in expectations and targets that managers set for their IT
implementations.
Next, we consider the moderating effect of a firm’s strategic
emphasis on the relationship between IT investments and
market value (measured by Tobin’s Q). The strategic em-
phasis of a firm can moderate the influence of IT investments
on market value because of the types of technologies and risks
associated with each strategic emphasis. We argue that firms
with a dual emphasis are likely to have lower cycle times in
product development, supply chain management, and cus-
tomer relationship management processes for realizing their
revenue and cost targets and thereby have accelerated cash
flows. Dual-emphasis firms may also have higher levels of
cash flows because of simultaneous targets for higher
revenues and lower costs. Finally, dual-emphasis firms may
have less variability in cash flows because their IT-enabled
cash flows have two sources (both revenue growth and cost
reduction), while firms with a primary emphasis on either
revenue growth or cost reduction have only one source of IT-
enabled cash flow (Porter 1985). Due to the diversification of
sources of cash flows, the overall variability of cash flows is
likely to be lower for dual-emphasis firms.
On the basis of the foregoing discussion, we offer the fol-
lowing formal conjectures: We expect that (1) IT investments
will have a stronger positive association with profitability for
firms with a dual strategic emphasis than for firms with a
single strategic emphasis, and (2) IT investments will have a
stronger positive association with Tobin’s Q for firms with a
dual strategic emphasis than for firms with a single strategic
20. emphasis. As a corollary, we also expect these effects to
apply when we disaggregate single strategic emphasis into
revenue or cost emphasis.
228 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Method
Data
We obtained our independent and dependent variables from
separate sources: an InformationWeek survey and Compustat.
We obtained data collected by InformationWeek, a leading
and widely circulated IT publication in the United States,
from their survey of top IT managers (e.g., vice presidents,
CIOs, directors) of more than 300 Fortune 500 firms in North
America. InformationWeek has published reports of its
annual surveys since 1986. Although in the initial years these
reports provided firm-level IT spending data, since 1997, due
to confidentiality reasons, InformationWeek publishes only
aggregate data at the industry level. The data used in this
study include information about firms’ IT spending and IT
strategic emphases during the 2003–2004 period. Information
Week is considered a reliable source of information, and prior
academic studies have also used data from InformationWeek
surveys (e.g., Bharadwaj et al. 1999; Mithas et al. 2005; Rai
et al. 1997). We complemented the InformationWeek data
with firm performance (Tobin’s Q, profitability) and industry
data from Compustat.
Table 2 provides the definitions, variable constructions, and
21. sources for all of the variables used in this research.
Table 3 provides descriptive statistics by IT strategic em-
phasis. It shows that, on average, firms spend approximately
4.1 percent of their revenue on IT investments and have a
profitability (operating income before depreciation as a per-
centage of sales revenue) of approximately 17 percent and a
Tobin’s Q of 1.4 during the study period. In addition, approx-
imately 90 percent of the firms have either a dual emphasis or
a cost reduction emphasis in their IT strategy (with almost
equal distribution of firms among these emphases) while the
remaining firms have a revenue-enhancing emphasis. On
average, firms with a revenue or dual emphasis have higher
values of Tobin’s Q, profitability, and IT expenses (as a
percentage of revenue) than firms with a cost emphasis.
Table 4 shows correlations among variables. As expected, IT
investments show a positive correlation with profits and
Tobin’s Q. We also observe that a dual emphasis has a
positive correlation with Tobin’s Q but a statistically insigni-
ficant correlation with profit.
Empirical Models and Econometric
Considerations
We specify standard cross-sectional models of the following
form:
Yi= Xiβ + εi (1)
where Y represents endogenous variables such as Tobin’s Q
or profitability; X represents a vector of firm characteristics,
such as IT strategic emphasis, IT investments, and control
variables, β is a vector of the parameters to be estimated; and
ε is the error term associated with each observation i.
22. We follow relevant prior literature subject to availability of
data and use parsimonious models similar to Oh and Pinson-
neault (2007), Rust et al. (2002), Tallon (2007), and Tallon et
al. (2000) to retain comparability of findings to the extent
possible and for clear interpretation of results. We account
for firm-level heterogeneity by including relevant factors such
as firm size, industry sector, industry concentration, and time
period in our models, and we provide an extensive discussion
of other robustness checks to provide confidence in our
findings. We implicitly control for firm size in our models
because we use IT investments normalized by sales revenues
of firms as our measure of IT Investments. We control for
sector differences (manufacturing versus services) to account
for sectoral differences in IT investments, IT strategies, and
firm performance. We also include a dummy for the year
2004 to account for any systematic difference across the two
years studied (2003 and 2004) in InformationWeek survey
data or firm performance. Subsequently, we report robustness
checks when we include additional and/or alternative control
variables in our models such as research-and-development
(R&D) and advertising intensity; non-IT sales; selling,
general, and administrative (SG&A) expenditures; industry
concentration; and one-digit North American Industry Classi-
fication System (NAICS) industry dummies (instead of a
service-sector dummy variable), which indirectly account for
many industry-level variables, such as industry capital inten-
sity, industry concentration, average Tobin’s Q, and industry
regulation.
Accordingly, we specify our empirical models for testing our
conjectures for a dual versus single strategic emphasis as
follows:
Profitabilityt = β10 + β11Dual Emphasist + β12IT
Investmentst-1 × Dual Emphasist + β13IT
Investmentst-1 + β14Service + β15Year Dummy + g1
23. (2)
Tobin’s Qt = β20 + β21Dual Emphasist + β22IT
Investmentst-1 × Dual Emphasist + β23IT
Investmentst-1 + β24Service + β25Year Dummy + g2
(3)
We disaggregate the single IT strategic emphasis further into
revenue or cost strategic emphasis to test our conjectures at a
more granular level:
MIS Quarterly Vol. 40 No. 1/March 2016 229
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Table 2. Variable Definitions and Data Sources
Variable
Name
Variable Construction/ Definition Source
Tobin’s Q Ratio of the market value of the firm divided by the
replacement cost of assets. We
calculated the market value of a firm by adding the market
value of its common
equity, the liquidated value of preferential stock, and total debt.
We used total assets
as a measure of replacement cost of assets.
Compustat
24. Profit Operating income before depreciation divided by sales
(expressed in percentage) Compustat
IT
Investment
The level of IT investment as a percentage of the firm’s sales
revenue InformationWeek
IT Strategic
Emphasis
“Has your organization’s business-technology strategy in the
past 12 months
been primarily focused on generating new revenue, or on cost
cutting and
streamlining operations?” (choose one)
• Cost emphasis = 1 if the firm chooses “cost
cutting/streamlining operations” and
zero otherwise.
• Revenue emphasis = 1 if the firm chooses “generating new
revenue” and zero
otherwise.
• Dual emphasis = 1 if the firm chooses “about the same
emphasis on both” and zero
otherwise.
InformationWeek
Service Whether the firm belongs to the manufacturing or the
services sector (services = 1,
manufacturing = 0).
25. Based on NAICS
classification
Table 3. Descriptive Statistics by IT Strategic Emphasis
Tobin’s Q Profit IT Investment Service
Revenue Emphasis Mean 1.65 20.45 6.97 0.79
SD 0.86 19.39 15.06 0.41
N 43 61 61 61
Cost Emphasis Mean 1.18 15.53 3.25 0.48
SD 0.79 11.75 5.31 0.5
N 188 210 210 210
Dual Emphasis Mean 1.53 17.97 4.09 0.65
SD 1.04 14.3 3.86 0.48
N 185 240 240 240
Total Mean 1.38 17.26 4.09 0.6
SD 0.94 14.12 6.82 0.49
N 416 511 511 511
Table 4. Pairwise Correlations Among Variables
1 2 3 4 5 6
27. (5)
We use ordinary least squares (OLS) to estimate Equations
2–5 because the focal explanatory variables (i.e., IT strategic
emphasis and IT investments) are exogenous in an
econometric sense (Wooldridge 2003b).
We do not assume that IT strategic emphasis and IT invest-
ments are independent of each other, and our models account
for any potential correlation between these variables. These
correlations are relatively small in our sample. Table 4 shows
that the correlation between a dual-emphasis strategy and
profitability is zero and between a dual-emphasis strategy and
Tobin’s Q is 0.14. Such correlations do not create endo-
geneity, because regression models account for correlations
among explanatory variables (including the variables involved
in interaction terms).
Because of the presence of interaction terms in our models,
we mean-centered the value of IT investments for easier
interpretation of results. To estimate Equations 4 and 5,
instead of omitting one of the dummy variables for a strategic
emphasis (as is commonly done in estimating regression
models with dummy variables), we retain all three dummy
variables and the interactions involving IT investments with
these dummy variables in Equations 4 and 5, but we suppress
the constant term. This estimation strategy lends itself to a
more direct interpretation of results without affecting param-
eter estimates or their statistical significance (for a similar
approach, see Anderson et al. 2006). Note that suppression of
constant results in increased R-squared value for models in
Table 5 but it does not affect hypothesis tests for our key
parameters of interest.
Table 5 shows the results of our estimation of Equations 2 and
28. 3, and Table 6 shows the results of our estimation of Equa-
tions 4 and 5. We used heteroskedasticity-consistent robust
standard errors for statistical tests (Froot 1989; Rogers 1993;
Williams 2000; Wooldridge 2003a). Use of the robust stan-
dard errors, coupled with a large sample size to justify the
assumption of asymptotic normality of residuals, is likely to
yield conservative tests of statistical significance. We tested
for multicollinearity by computing the variance inflation
factors and condition indices. The highest variation inflation
factor and condition index in our models were less than 2.7
and 4.3, respectively, indicating that multicollinearity is not
a serious concern.
We performed several diagnostic and robustness checks to
ascertain the stability of our results. First, although we use
conservative heteroskedasticity-consistent robust standard
errors for statistical testing, we nevertheless evaluated kernel
density plots of residuals, and while they show positive
skewness and kurtosis, they appear to be approximately
normally distributed.
Second, we evaluated the stability of our results by removing
approximately 1 percent of observations that have IT invest-
ments in excess of three standard deviations. While this leads
to a loss in efficiency of estimates as one would expect, the
results remain qualitatively similar to the ones reported
previously. Third, we included a squared term for IT invest-
ments in our profitability models to avoid omitted variable
bias due to exclusion of higher-order terms of independent
variables. Because we obtained broadly similar results, albeit
with higher standard errors due to the presence of a quadratic
term, we report our main results without higher-order terms
for easier interpretation of results.
Fourth, we also assessed the stability of our results by
29. estimating the models after log-transforming the dependent
variables. Because these estimates yielded essentially similar
results, we continue with interpreting the results from original
nontransformed dependent variables for a simpler and more
managerially relevant interpretation. Finally, because the
error terms of the profitability and Tobin’s Q equations may
be correlated for the same firm, we allowed for these poten-
tially correlated errors to obtain consistent and efficient
estimates of parameters by using the seemingly unrelated
regression (SUR) estimation technique (Zellner 1962). Note
that gains in efficiency do not accrue if equations in the SUR
model use same regressors, as is the case here (as the esti-
mated coefficients are identical to OLS); thus, the SUR
estimation technique is used only as a robustness check here.
These SUR models use only those observations for which
both profitability and Tobin’s Q measures are available.
Although this caused the loss of observations for which we
had only the profitability measure but not the Tobin’s Q
measure, we obtained broadly similar results as reported
previously. In summary, we used several tests to assess the
stability of our results, and broadly similar results across our
tests provide confidence in the robustness of our results.
MIS Quarterly Vol. 40 No. 1/March 2016 231
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Table 5. How a Dual Versus Single Strategic Emphasis
Influences Profits and Tobin’s Q
(1)
Profit
30. (2)
Tobin’s Q
Dual Emphasis β11 0.762 β21 0.308***
(0.263) (0.001)
Dual Emphasis × Mean-Centered IT Investmentst-1 β12
1.115*** β22 0.0432**
(0.006) (0.047)
IT Investmentst-1 β13 0.295* β23 0.0139**
(0.083) (0.014)
Service β14 4.284*** β24 -0.214*
(0.003) (0.074)
Year Dummy for 2004 β15 0.660 β25 -0.0270
(0.315) (0.642)
Constant β10 12.84*** β20 1.329***
(0.000) (0.000)
Observations 511 416
R-squared 0.126 0.056
Robust p-values are in parentheses. ***p < 0.01, **p < 0.05, *p
< 0.1 (one tailed tests for IT investments and IT strategy, and
two-
tailed tests for other variables).
32. Service β37 3.938*** β47 -0.260**
(0.006) (0.028)
Year Dummy for 2004 β38 0.470 β48 -0.0597
(0.501) (0.316)
Observations 511 416
R-squared 0.652 0.716
Robust p-values are in parentheses. ***p < 0.01, **p < 0.05, *p
< 0.1 (one tailed tests for IT investments and IT strategy, and
two-
tailed tests for other variables).
232 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Results
Before presenting the results of the tests of our conjectures,
we first discuss how IT strategic emphasis affects firm
performance at the mean levels of IT investments. We find
that at the mean value of IT investments, firms with a dual
emphasis do not have higher profitability than firms with a
revenue or cost emphasis (see Table 5; β11 = 0.762, n.s.).
However, we find that firms with a primary emphasis on
revenue or cost with respect to their IT investments will have
lower market value than firms with a dual emphasis, at the
33. mean value of IT investments (Table 5; β21 = 0.308, p < 0.01).
The effects are not only statistically significant but also
appear to be economically significant because dual emphasis
firms have Tobin’s Q that is 0.31 higher than single-emphasis
firms (see Table 5), which is a very large value considering
that it implies about one-third increase in market value over
the replacement cost of assets of firms in our sample (this
magnitude is about one-third of the standard deviation of
Tobin’s Q in our sample). Taken together, the market appears
to value dual-emphasis firms higher than revenue- or cost-
emphasis firms, even though these firms have similar profit-
ability at the mean levels of IT investments.
We now describe the results of the tests of our conjectures.
We find support for the first conjecture, which predicted that
dual-emphasis firms will have a stronger positive association
between IT investments and profitability than firms with
either a revenue emphasis or a cost emphasis alone. Indeed,
we find that IT investments have a positive and statistically
significant association with profitability for dual-emphasis
firms (refer to column 1 of Table 5; β12 = 1.115, p < 0.01);
this result is higher than that for revenue- or cost-emphasis
firms.
We also find support for the second conjecture, which pre-
dicted that dual-emphasis firms will have a stronger positive
association between IT investments and Tobin’s Q than firms
with either a revenue emphasis or a cost emphasis alone.
Indeed, we find that IT investments have a positive and
statistically significant association with Tobin’s Q for dual-
emphasis firms (Table 5; β22 = 0.043, p < 0.05).
We find support for the corollaries based on the results of our
Wald tests (refer to Table 7). IT investments have a positive
and statistically significant association with profitability for
dual-emphasis firms (refer to column 1 of Table 6; β34 =
34. 1.417, p < 0.01), which is higher than that for revenue-
emphasis firms (β35 = .211, n.s.) or cost-emphasis firms (β36 =
.426, p < 0.05). Likewise, Table 7 shows support for our
prediction that IT investments have a greater impact on
market value (as measured by Tobin’s Q) for dual-emphasis
firms than for cost-emphasis firms. IT investments have a
positive and statistically significant association with Tobin’s
Q for dual-emphasis firms (refer to column 2 of Table 6; β44
= 0.058, p < 0.05), a nonsignificant association with Tobin’s
Q for revenue-emphasis firms (β45 = 0.001, n.s.), and a
positive and statistically significant association with Tobin’s
Q for cost-emphasis firms (β46 = 0.047, p < 0.01). Dual-
emphasis firms have a steeper and more statistically
significant IT–Tobin’s Q relationship than revenue-emphasis
firms (see Table 6). However, we did not find support for the
prediction that IT investments have a greater impact on
market value (as measured by Tobin’s Q) for dual-emphasis
firms than for cost-emphasis firms (see Table 7).
We plotted the results in Tables 5 and 6 to show how the
effect of IT investments on firm performance varies by IT
strategic emphasis. Figure 1 shows that at the mean value of
IT investments (shown by a vertical line), dual-emphasis
firms do not have higher profitability than single-emphasis
firms (i.e., revenue or cost). This figure suggests that al-
though profitability is approximately the same at the mean
value of IT investments, the differences can be much larger at
higher levels of IT investment. In particular, at higher levels
of IT investment, dual-emphasis firms can significantly out-
perform single-emphasis firms (i.e., revenue or cost).
Conversely, at low levels of IT investments, single-emphasis
firms (i.e., revenue or cost) may have higher profitability than
dual-emphasis firms.
Figure 2 shows that at the mean value of IT investments
35. (shown by a vertical line), dual-emphasis firms have a signifi-
cantly higher market value than single-emphasis firms (i.e.,
revenue or cost). As with profitability, the market values
dual-emphasis firms even higher than single-emphasis firms
(i.e., revenue or cost) when firms spend significantly more
than the mean levels of IT investments. Notably, the market
values dual-emphasis firms more than single-emphasis firms
even at lower levels of IT investments, despite the lower
profitability of dual-emphasis firms.
While Figures 1 and 2 show how profitability and market
value vary for dual- or single-emphasis firms, Figures 3 and 4
disaggregate the single strategic emphasis into its constituent
elements (i.e., revenue and cost) to glean deeper insights.
Specifically, Figure 3 shows that at the mean value of IT
investments (shown by a vertical line), revenue-emphasis
firms and dual-emphasis firms have approximately the same
profitability as cost-emphasis firms. Again, although profit-
ability may be approximately the same at the mean value of
IT investments, the differences can be much larger at higher
levels of IT investment. In particular, at higher levels of IT
investments, dual-emphasis firms can significantly outperform
revenue- and cost-emphasis firms. Figure 4 shows that at the
mean value of IT investments (shown by a vertical line),
MIS Quarterly Vol. 40 No. 1/March 2016 233
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Table 7. Summary of Results
Conjectures and Corollaries Test Supported
36. Conjectures: Single Versus Dual Emphasis
Conjecture 1: IT investments have a stronger positive
association with profitability for dual-
emphasis firms than for single-emphasis firms (revenue growth
or cost reduction).
β12 = 0 Yes**
Conjecture 2: IT investments have a stronger positive
association with Tobin’s Q for dual-
emphasis firms than for single-emphasis firms (revenue growth
or cost reduction).
β22 = 0 Yes**
Corollaries: Disaggregating Single Strategic Emphasis into
Revenue or Cost Emphasis
Corollary 1a: IT investments have a greater impact on
profitability for dual-emphasis firms
than for cost-emphasis firms.
β34–β36 = 0 Yes**
Corollary 1b: IT investments have a greater impact on
profitability for dual-emphasis firms
than for revenue-emphasis firms.
β34–β35 = 0 Yes***
Corollary 2a: IT investments have a greater impact on market
value (as measured by Tobin’s
Q) for dual-emphasis firms than for cost-emphasis firms.
β44–β46 = 0 n.s.
37. Corollary 2b: IT investments have a greater impact on market
value (as measured by Tobin’s
Q) for dual-emphasis firms than for revenue-emphasis firms.
β44–β45 = 0 Yes**
n.s. = not statistically significant, ***p < 0.01, **p < 0.05, *p
< 0.1 (all one-tailed tests).
revenue-emphasis firms and dual-emphasis firms have a
higher market value than cost-emphasis firms. From this
figure, it appears that the market has a generally favorable
assessment of dual- and revenue-emphasis firms over a
significantly large range of IT investments.
Among other results for which we did not pose specific
conjectures, firms in the service sector appear to have higher
profitability but a lower Tobin’s Q compared with firms in the
manufacturing sector (see Tables 5 and 6). As the coefficient
of the year dummy indicates, we fail to observe any
statistically significant differences in firm performance in
2004 compared with 2003.
We conducted additional analyses for robustness. First, we
included R&D and advertising investments (as percentage of
sales) as additional control variables in the models. However,
because many firms do not report R&D and advertising
investments, to avoid data loss, we used the mean value of
R&D and advertising intensity for missing data. These
models provide broadly similar results. Second, because
SG&A expenditures may be correlated with IT investments
and because they may also affect outcome variables, we
included a variable we refer to as non-IT SG&A (= SG&A –
IT) in our models. Because of missing data for the SG&A
variable in Compustat, the sample size in these models is less
38. than the sample size in the models without this control vari-
able, thus affecting the statistical significance of the variables.
Nonetheless, on the whole, the results are broadly similar to
those we report in Table 6, with some minor differences. In
these models, the stock market values dual- and revenue-
emphasis firms more than cost-emphasis firms at the mean
value of IT investments, even though the differences in
profitability are not significant at the mean value of IT invest-
ments. Again, dual-emphasis firms have a steeper IT–
profitability relationship than cost-emphasis firms.
Third, we conducted our analyses using raw (i.e., untrans-
formed) and standardized values of IT investments and
obtained qualitatively similar results. Fourth, we controlled
for industry concentration (using the Herfindahl Index) in our
models and obtained broadly similar results. Finally, instead
of using a service-sector dummy variable, we also used one-
digit NAICS industry dummies in the models. Use of these
industry dummies accounts for many variables that are calcu-
lated at the industry level, such as industry capital intensity,
industry concentration, average Tobin’s Q, and industry
regulation, and these models also yielded broadly similar
results, thus providing confidence in the robustness of results.
Discussion
Main Findings
Our goal in this study was to conceptualize why a revenue,
cost, or dual strategic emphasis in IT strategy will affect firm
performance and moderate the returns to IT investments. We
test the resulting conjectures using archival data from more
than 300 large U.S. firms. We found that firms with a dual
234 MIS Quarterly Vol. 40 No. 1/March 2016
39. Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Figure 1. IT–Profitability Relationship for Dual- Versus
Single-Emphasis Firms (Revenue or Cost) (other
variables are at their mean value)
Figure 2. IT–Tobin’s Q Relationship for Dual- Versus Single-
Emphasis Firms (Revenue or Cost) (other
variables are at their mean value)
MIS Quarterly Vol. 40 No. 1/March 2016 235
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Figure 3. IT–Profitability Relationship by Dual, Revenue, and
Cost IT Strategic Emphasis (other variables
are at their mean value)
Figure 4. IT–Tobin’s Q Relationship by Dual, Revenue, and
Cost IT Strategic Emphasis (other variables
are at their mean value)
236 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
40. emphasis in their IT strategy have a higher Tobin’s Q than
firms with a revenue or a cost emphasis at the mean value of
IT investments; these differences in market value arise despite
no statistically significant differences in profitability.
Why does the market reward dual strategies over single focus
strategies? We believe that the possible reasons may be
because markets may perceive dual strategies to be less repli-
cable because of (1) RBV mechanisms such as greater social
complexity, causal ambiguity, path dependence, and organiza-
tional learning, (2) reduced diminishing returns and plentiful
low-hanging fruits in opportunity space, and (3) stretch
targets in two key areas related to revenues and costs, as we
argued in the “Background and Theory”section. Together
these mechanisms may allow dual emphasis firms to have
more sustainable, higher, and accelerated cash flows because
of simultaneous targets for higher revenues and lower costs,
with less variability in cash flows because cash flows have
two sources (both revenue growth and cost reduction), while
firms with a primary emphasis on either revenue growth or
cost reduction have only one source of IT-enabled cash flow.
Taken together, these findings foreground the importance of
IT strategic emphasis because such strategies influence
market valuations even if they do not yield measurable profit-
ability differences at the mean value of IT investments. Of
greater importance, IT strategic emphasis plays a significant
role in moderating the relationship between IT investments
and firm performance. We find that dual-emphasis firms have
a stronger IT–profitability relationship than single-emphasis
(revenue or cost emphasis) firms. Dual-emphasis firms also
have a stronger IT–Tobin’s Q relationship than revenue-
emphasis firms. In general, our findings and plots show that
a dual IT strategic emphasis yields better profitability and
market value outcomes when such a strategic emphasis is
combined with high levels of IT investments. At the same
41. time, a dual emphasis can backfire if not supported by ade-
quate levels of IT investments because at lower levels of IT
investments, it is outperformed by other strategic emphases.
Our results are consistent with the view that firms can realize
significant performance benefits when they combine higher
levels of IT investments with the more sophisticated manage-
ment and governance capabilities that firms may need to
realize the dual strategic emphasis of both cost reduction and
revenue enhancement (Aral and Weill 2007; Weill and Ross
2009). These findings extend prior literature by showing, for
the first time, how IT investments and IT strategic emphasis
jointly influence firm performance. They also provide impor-
tant implications for practice, while suggesting the need for
developing stronger theory (e.g., in the area of IT strategic
ambidexterity) and more precise empirical tests in further
work.
Before considering implications, however, we discuss some
limitations. First, our study uses a cross-sectional analysis
and, although we performed an extensive set of analyses, we
do not claim causality and treat our results as associational;
longitudinal studies with several years of panel data would
help validate our findings to increase their generalizability
and to enable stronger claims related to causality. Longi-
tudinal studies could also help sort out the extent to which the
stock market is efficient in recognizing the improvements in
fundamentals due to managerial interventions and strategic
choices. Second, although we used a perceptual single-item
measure for primary emphasis in IT strategy—which is not a
major limitation per se, as other studies have also used similar
measures (Rust et al. 2002; Tallon 2007, 2008) and such
measures can be preferred in certain contexts to elicit appro-
priate response behavior and clearer interpretation of findings
(Drolet and Morrison 2001; Rossiter 2002; Wanous et al.
1997)—further studies with alternative operationalizations
using multi-item scales might be helpful.
42. Third, we used two of many possible measures of organi-
zational performance, future research should use a more
comprehensive approach for assessing the effect of IT
strategies and IT investments on performance (see Richard et
al. 2009). In particular, although some may question whether
Tobin’s Q, developed in 1969, is a relevant metric in today’s
dynamic business environment, to the extent that a large share
of top managers’ compensation is tied to stock performance,
focusing on Tobin’s Q is still informative and is in line with
recent research linking IT with firm performance (e.g., Tafti
et al. 2013). Fourth, although this study provides useful
insights by leveraging data on both IT investments and IT
strategic emphasis, richer conceptualizations and theorizing
along the lines in other studies (e.g., Oh and Pinnsonneault
2007; Tallon 2007) can be illuminating. Fifth, our findings
are more likely to apply to single-business firms or strategic
business units where a dominant IT strategic emphasis can be
clearly identified because it may be harder to identify a
dominant IT strategic emphasis in conglomerates or multi-
business firms that are much more dominant in emerging
economies but are sometimes considered relevant even in the
West as reflected in Google’s reorganization in 2015 (The
Economist 2014, 2015; Mithas 2015). Nevertheless, the
findings are still useful for the strategic business units within
such conglomerates. Finally, and perhaps most importantly,
although we provide plausible arguments for the likely mech-
anisms that drive our results, we did not directly test those
mechanisms; we discuss this issue in the research implications
section to motivate a program of research.
MIS Quarterly Vol. 40 No. 1/March 2016 237
Mithas & Rust/Influence of IT Strategy and Investments on
43. Firm Performance
Implications for Research
Several important conclusions result from the conjectures
motivated by Table 1 and tested in our empirical analyses.
These conclusions generate implications for developing a
program of research that explains, extends, or clarifies our
findings. First, our findings suggest that the overall effect of
IT strategic emphasis on firm performance depends on the
type of strategic emphasis, levels of IT investments, and
specific measures of firm performance. Unlike Rust et al.
(2002), who report the effect of strategic quality emphasis on
profitability, our findings show that IT strategic emphasis
does not influence profitability at the mean level of IT invest-
ments, and no one strategic emphasis is unconditionally
superior in terms of profitability at all levels of IT invest-
ments. While Rust et al. do not investigate the effect of
quality-based strategic emphasis on Tobin’s Q, we find that
firms with a revenue or dual IT strategic emphasis have a
higher Tobin’s Q than firms with a cost emphasis, at the mean
value of IT investments. These differences in findings across
studies investigating an emphasis on quality and IT strategy
highlight the need for similar investigations of emphases in
other functional strategies or governance processes such as
exploitation versus exploration (O’Reilly and Tushman 2004),
prospector versus defender (Miles et al. 1978), autonomy
versus control (Tafti et al. 2007), centralization versus decen-
tralization (Xue et al. 2014), regulation- versus consensus-
based governance (Lazic et al. 2014), standardization versus
integration (Weill and Ross 2009), focused versus broad
search (Leiponen and Helfat 2010), flexibility versus effi-
ciency (Adler et al. 1999) and their implications for firm
performance. We recognize that some functional strategies
may not have a dual focus in the sense of the revenue and cost
emphases used in this paper.
44. Second, although our focus in this study was on IT strategic
emphasis, IT strategic emphasis is not completely indepen-
dent of the overall strategy of a firm and strategic emphases
in other areas (e.g., marketing, operations, capital projects).
There is a need for further research to better understand the
linkages and interactions between strategic emphases across
functional areas, how they relate to IT strategy and the overall
strategy of firm, and the implications for firm performance.
Third, although we find that the dual strategic emphasis alone
is associated with a higher Tobin’s Q, and stronger IT–
Tobin’s Q and IT–profitability relationships, there remains the
need to quantify the risks associated with adopting dual
strategies and higher IT investments. The complexities and
path dependence of a dual-emphasis strategy can also make
firms more rigid and reduce their flexibility to compete
successfully if the environment changes suddenly.
Fourth, in terms of implications for future theoretical work,
our study suggests a need for analytical work on the one hand
and a deeper unpacking of the notion of IT ambidexterity and
its implications on the other hand, beyond some nascent work
in the IS literature that has begun to examine various notions
of ambidexterity at multiple levels (Cao et al. 2013-14;
Gregory et al. 2015; Im and Rai 2008; Khuntia et al. 2014;
Kude et al. 2015; Lee et al. 2015; Schmidt et al. 2014; Tiwana
2010). In particular, theorizing and testing how diversity of
IT systems, stretch targets, and specific combinations or
configurations of specific IT systems allow firms to develop
IT ambidexterity is an attractive area of inquiry. There are
also opportunities to study IT ambidexterity at the project or
application level, perhaps using a case study approach
(Cederlund et al. 2007; Kohli and Hoadley 2006; Ramasubbu
et al. 2014). Such case studies might facilitate better oppor-
tunities for theory-building and for understanding the perfor-
45. mance implications of fit between strategic objectives of that
project and the application capabilities. It is also likely that
some projects that initially offer cost reduction opportunities
might subsequently provide revenue growth opportunities.
For example, UPS introduced its Delivery Intercept Service
because its existing IT infrastructure enabled them to do so.
While the original system facilitated cost reduction, the same
technology enabled UPS to increase revenue subsequently.
Such options (previously unknown) provide opportunities
from existing infrastructures that cannot be easily classified
into a narrow bucket. Although we recognize that theory-
building is an important undertaking in and of itself, we call
for an equally important consideration of operational issues,
such as how theoretical constructs will be measured in a prac-
tical and unobtrusive manner to test theories and to generate
insights for practitioners.
Finally, we call for further research to articulate the boundary
conditions of when dual-emphasis is likely to be rewarding
and when it may be deleterious, in the spirit of “pursuing
failure” to prune theories (Gray and Cooper 2010). Although
the jury is still out on some of the arguments that Gray and
Cooper make as they themselves acknowledge, we can add
that scientific enterprise is just as well served by curiosity-
and problem-driven research (Lawrence 1992) in a context
where organizations are best viewed as tools instead of
natural objects that are susceptible to laws, experimental
controls are lacking, and regularities are often context and
time-dependent (Davis 2010). How might one go about
testing as to which theory or mechanism (or a combination of
mechanisms) among those listed in Table 1 provides the best
explanation for why dual-emphasis in IT strategy and its
interaction with IT investments is associated with superior
performance? We can envision a research program for opera-
tionalizing the mechanisms, collecting data on them from
secondary or primary sources and then testing their relative
46. 238 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
explanatory power. While prior literature on RBV may pro-
vide guidance for operationalizing some of these mechanisms,
some new measures may have to be developed for opera-
tionalizing reduced diminishing returns (for example, by
counting total number and types of revenue expansion and
cost reduction IT projects that are part of an organization’s
consideration set in a year) and stretch targets across revenue
and cost domains (for example, number of revenue and cost
metrics used by the IT department of an organization).
Although creating new scales will be useful, in some cases,
researchers may come across archival but unobtrusive data
that may proxy for some of the underlying ideas in Table 1 for
initial tests of competing mechanisms. Like other tests of
organizational theories (for a discussion, see Davis 2010), it
is unlikely that any one study or method of enquiry can pro-
vide a definitive test of the conjectures or implications arising
from our research or the ideas listed in Table 1. However, we
hope that multiple studies across varying contexts with dif-
fering approaches will give us a vantage point to make sense
of the contours of the richness and complexity of organiza-
tional strategies, resources, and associated performance
outcomes to develop useful insights and generalizations.
Implications for Practice
Our most important managerial implication is that a dual or
revenue emphasis in IT strategy pays off in terms of firm
valuation, as measured by Tobin’s Q, even though profit-
47. ability is not improved at the mean level of IT investments.
We also find that firms with a dual emphasis in IT strategy are
more profitable and have a higher Tobin’s Q when they invest
more in IT. At lower IT budget levels, it is best for the firm
to choose one strategy or the other—either revenue expansion
or cost cutting—as its primary IT emphasis. How would
Tobin’s Q vary if a dual-emphasis firm did not spend higher
amounts on IT? The answer to this counterfactual question
would require a randomized field trial involving the assign-
ment of low and high IT investments to dual-emphasis firms.
However, in the absence of such a field trial, our observa-
tional study leverages variation in IT investments across dual-
emphasis firms in our sample to provide a preliminary answer.
Figures 1–4 show that at lower levels of IT investments, dual-
emphasis firms do about as well as single-emphasis firms in
terms of profitability, although they do slightly better than
single-emphasis and particularly cost-emphasis firms in terms
of Tobin’s Q (see Figure 4).
In a broader sense, our study provides an assessment of the
implications of IT strategic emphasis for multiple measures of
firm performance. Our results suggest that IT strategic
emphases have a significant impact on market value at the
mean value of IT investments, despite no differences in
profitability at those levels of IT investments. Our results are
not only statistically but also economically or practically
significant because Tobin’s Q for dual-emphasis firms is 0.31
higher (because these are large firms, a Tobin’s Q of 0.31
means 31 percent of replacement cost of assets of the large
firms in our sample which is an economically large quantity)
at the mean level of IT investments (see Aguinis et al. [2010]
for further discussion of statistical versus practical signi-
ficance; see also Fornell et al. [2009]). Managers need to
understand the trade-offs involved in pursuing a particular
strategic emphasis in a functional area, and depending on the
48. strategic goals, they can choose a particular IT strategic
emphasis that meets their needs. In particular, because adop-
tion of a particular strategic emphasis affects market value
without affecting profitability, managers need to consider the
market value implications of their actions and strategic
choices carefully even if they do not appear to affect profit-
ability (Kohli et al. [2012] make similar observations). It is
also possible that strategic emphases in different functional
areas have different implications for managing profitability
and Tobin’s Q, and by combining the strategic choices across
various functional areas, managers may be able to select a
portfolio of strategic options to meet their desired perfor-
mance objectives.
Another managerial implication of our findings pertains to
tactical actions and investments in discretionary expenditures
such as advertising, R&D, and IT investments to operation-
alize the strategic emphasis in a functional area. Although
managers can view IT investments as providing the firm with
the capabilities to become ambidextrous and agile for im-
proved firm performance, this does not mean that all IT
systems and applications can help with revenue growth or
cost reduction. As we argue in the “Background” section, it
is not so much which applications firms use but rather what
their overall strategic objectives are for deploying the appli-
cations that is more critical, because we argue that managerial
beliefs, mental models, and strategic posture shape an organi-
zation’s IT governance and management of IT projects to
create business value (Mithas et al. 2013). This means that
managers can choose a suitable portfolio or combinations of
appropriate IT applications (each of which may only provide
either revenue growth or cost benefits to a greater degree,
with some exceptions such as business analytics systems that
may provide dual capabilities) that are consistent with their
strategic objective. For example, while CRM systems may
help firms improve customer satisfaction (Mithas et al. 2005,
49. 2016) and, in turn, repurchase intentions and sales (Lariviere
et al. 2016); eProcurement and RFID (radio-frequency identi-
fication) systems may help firms reduce costs (Mithas and
Jones 2007; Whitaker et al. 2007). Thus, managers need to
synchronize their IT strategic emphasis with related IT
applications to achieve their strategic objectives.
MIS Quarterly Vol. 40 No. 1/March 2016 239
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Conclusion
To conclude, this research empirically tested the effect of IT
strategic emphases and IT investments on firm profitability
and market value. Using archival data from a broad cross-
section of more than 300 U.S. firms, we find that at the mean
value of IT investments, dual-emphasis firms have a higher
Tobin’s Q than firms with a revenue or a cost emphasis,
without any statistically significant differences in profitability
due to strategic emphases. Of greater importance, IT strategic
emphasis plays a significant role in moderating the relation-
ship between IT investments and firm performance. Dual-
emphasis firms have a stronger IT–profitability relationship
than single-emphasis firms, and dual-emphasis firms have a
stronger IT–Tobin’s Q relationship than revenue-emphasis
firms. Overall, while this research provides useful insights
into the effects of IT-related strategic emphasis on firm
performance, the findings imply that the effects of strategic
emphasis (revenue growth, cost reduction, or a dual emphasis)
on firm performance can vary significantly and are condi-
tional on levels of IT investments. For typical levels of IT
expenditure, a dual emphasis in IT strategy pays off in terms
50. of a higher firm valuation, and a higher level of IT invest-
ments makes a dual emphasis increasingly attractive, with
respect to both profitability and Tobin’s Q. These findings
should help managers craft their IT strategies and better
allocate resources for IT systems to achieve or sustain
competitive advantage.
Acknowledgments
We thank Rajiv Kohli (the senior editor), Andrew Burton-Jones
(the
associate editor), the three anonymous reviewers of MIS
Quarterly,
and seminar participants at the Marketing Strategy Meets Wall
Street Workshop (January 24-29, 2009) at Goizueta Business
School, Emory University, for helpful comments to improve this
work. We also acknowledge helpful discussions with Andrew
Baer,
former CIO of Comcast, to inform our thinking and arguments.
References
Adler, P. S., Goldoftas, B., and Levine, D. I. 1999.
“Flexibility
Versus Efficiency? A Case Study of Model Changeovers in the
Toyota Production Systems,” Organization Science (10:1), pp.
43-68.
Aguinis, H., Werner, S., Abbott, J. L., Angert, C., Park, J. H.,
and
Kohlhausen, D. 2010. “Customer-Centric Science: Reporting
Significant Research, Results with Rigor, Relevance, and
Practical Impact in Mind,” Organizational Research Methods
(13:3), pp. 515-539.
Anderson, M. C., Banker, R. D., and Ravindran, S. 2006.
51. “Value
Implications of Investments in Information Technology,”
Management Science (52:9), pp. 1359-1376.
Aral, S., and Weill, P. 2007. “IT Assets, Organizational Capa-
bilities, and Firm Performance: How Resource Allocations and
Organizational Differences Explain Performance Variation,”
Organization Science (18:5), pp. 763-780.
Barney, J. B. 1991. “Firm Resources and Sustained
Competitive
Advantage,” Journal of Management (17), pp. 99-120.
Bartlett, C. A., and Ghoshal, S. 1995. “Rebuilding Behavioral
Context: Turn Process Reengineering into People
Rejuvenation,”
MIT Sloan Management Review (37:2), pp. 11-23.
Barua, A., Lee, C. H. S., and Whinston, A. B. 1996. “The
Calculus
of Reengineering,” Information Systems Research (7:4), pp.
409-428.
Barua, A., and Mukhopadhyay, T. 2000. “Information
Technology
and Business Performance: Past, Present, and Future,” in
Framing the Domains of Information Technology Management:
Projecting the Future...Through the Past, R. W. Zmud (ed.),
Cincinnati, OH: Pinnaflex Press, pp. 65-84.
Bharadwaj, A. 2000. “A Resource-Based Perspective on Infor-
mation Technology Capability and Firm Performance: An
Empirical Investigation,” MIS Quarterly (24:1), pp. 169-196.
Bharadwaj, A. S., Bharadwaj, S. G., and Konsynski, B. R.
1999.
52. “Information Technology Effects on Firm Performance as Mea-
sured by Tobin’s q,” Management Science (45:7), pp. 1008-
1024.
Birkinshaw, J., and Gibson, C. 2004. “Building
Ambidexterity,”
MIT Sloan Management Review (50:2), pp. 47-55.
Blanchard, O., Rhee, C., and Summers, L. 1993. “The Stock
Market, Profit, and Investment,” Quarterly Journal of
Economics
(108:1), pp. 115-136.
Cao, L., Mohan, K., Ramesh, B., and Sarkar, S. 2013-14.
“Evolu-
tion of Governance: Achieving Ambidexterity in IT Out-
sourcing,” Journal of Management Information Systems (30:3),
pp. 115-140.
Cederlund, J., Kohli, R., Sherer, S. A., and Yao, Y. 2007.
“How
Motorola Put CPFR into Action,” Supply Chain Management
Review (10), pp. 28-35.
Colvin, G. 2006. “The FedEx Edge,” Fortune, March 20
(available
at http://money.cnn.com/2006/03/17/magazines/fortune/csuite_
fedex_fortune_040306/index.htm).
Davis, G. F. 2010. “Do Theories of Organizations Progress?,”
Organizational Research Methods (13:4), pp. 690-709.
Dedrick, J., Gurbaxani, V., and Kraemer, K. L. 2003.
“Information
Technology and Economic Performance: A Critical Review of
Empirical Evidence,” ACM Computing Surveys (35:1), pp. 1-
53. 28.
Dehning, B., Pfeiffer, G. M., and Richardson, V. J. 2006.
“Analysts’ Forecasts and Investments in Information Tech-
nology,” International Journal of Accounting Information
Systems (7), pp. 238-250.
Dierickx, I., and Cool, K. 1989. “Asset Stock Accumulation
and
Sustainability of Competitive Advantage,” Management Science
(35:12), pp. 1504-1512.
Drolet, A. L., and Morrison, D. G. 2001. “Do We Really Need
Multiple-Item Measures in Service Research?,” Journal of
Service Research (3:3), pp. 196-204.
Economist, The. 2014. “Avoiding the Dinosaur Trap,” May 31,
pp.
9-13 (available at http://www.economist.com/news/special-
report/21602829-state-firms-and-family-conglomerates-are-
asias-
favourite-kinds-companies-both-must).
Economist., The. 2015. “From Alpha to Omega,” August 15,
p. 61
(available at http://www.economist.com/news/business/
240 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
21660985-conglomerates-are-back-fashion-only-best-will-
thrive-
54. alpha-omega).
Eisenhardt, K. M., and Martin, J. A. 2000. “Dynamic
Capabilities:
What Are They?,” Strategic Management Journal (21), pp.
1105-1121.
Flynn, B. B., Schroeder, R. G., and Sakakibara, S. 1995. “The
Impact of Quality Management Practices on Performance and
Competitive Advantage,” Decision Sciences (26:5), pp. 659-
691.
Fornell, C., Mithas, S., and Morgeson, F. V. 2009. “The
Economic
and Statistical Significance of Stock Returns on Customer
Satisfaction,” Marketing Science (28:5), pp. 820-825.
Froot, K. A. 1989. “Consistent Covariance Matrix Estimation
with
Cross-Sectional Dependence and Heteroskedasticity in Financial
Data,” Journal of Financial and Quantitative Analysis (24:3),
pp.
333-355.
Ghemawat, P. 2007. Redefining Global Strategy: Crossing
Bor-
ders in a World Where Differences Still Matter, Boston:
Harvard Business School Press.
Gibson, C., and Birkinshaw, J. 2004. “The Antecedents,
Conse-
quences, and Mediating Role of Organizational Ambidexterity,”
Academy of Management Journal (47:2), pp. 209-226.
Gray, P. H., and Cooper, W. H. 2010. “Pursuing Failure,”
Organizational Research Methods (13:4), pp. 620-643.
55. Gregory, R. W., Keil, M., Muntermann, J., and Mahring, M.
2015.
“Paradoxes and the Nature of Ambidexterity in IT Trans-
formation Programs,” Information Systems Research (26:1), pp.
57-80.
Grover, V., Gokhale, R. A., and Narayanswamy, R. S. 2009.
“Resource-Based Framework for IS Research: Knowledge
Firms
and Sustainability in Knowledge Markets,” Journal of the
Association for Information Systems (10:4), pp. 306-332.
Han, K., and Mithas, S. 2013. “Information Technology Out-
sourcing and Non-IT Operating Costs: An Empirical Investi-
gation,” MIS Quarterly (37:1), pp. 315-331.
Henwood, D. 1997. Wall Street: How It Works and for Whom,
London: Verso.
Hickins, M. 2012. “IT Takes Charge at AstraZeneca,” CIO
Jour-
nal, Wall Street Journal Blog May 13 (http://blogs.wsj.com/
cio/2012/05/13/it-takes-charge-at-astrazeneca/).
Hindo, B. 2007. “At 3M, a Struggle Between Efficiency and
Crea-
tivity,” Business Week, June 11 (available at http://www.
businessweek.com/magazine/content/07_24/b4038406.htm;
accessed April 4, 2010).
Hitt, L. M., and Brynjolfsson, E. 1996. “Productivity, Business
Profitability, and Consumer Surplus: Three Different Measures
of Information Technology Value,” MIS Quarterly (20:2), pp.
121-142.
56. Hoadley, E., and Kohli, R. 2014. “Business Value of IS Invest-
ments,” Chapter 71 in Computing Handbook, Third Edition:
Information Systems and Information Technology, H. Topi and
A. Tucker (eds.), Boca Raton, FL: CRC Press.
Im, G., and Rai, A. 2008. “Knowledge Sharing Ambidexterity
in
Long-Term Interorganizational Relationships,” Management
Science (54:7), pp. 1281-1296.
Kaplan, R. S., and Norton, D. P. 2006. The Strategy Focused
Organization: How Balanced Scorecard Companies Thrive in
the New Business Environment, Boston: Harvard Business
School Press.
Kennedy, P. 1998. A Guide to Econometrics (4th ed.),
Cambridge,
MA: The MIT Press.
Khuntia, J., Whitaker, J. W., Mithas, S., and Kaushik, A. 2014.
“Strategic Focus, Client Satisfaction and Firm Performance:
Evidence from Offshore Business Process Outsourcing
Providers,” in Proceedings of the 2014 Annual INFORMS
Conference on Information Systems and Technology,
S. Bhattacharjee, R. Gopal, R. Rao and S. D. Smith (eds.), San
Francisco: Information Systems Society.
Kim, K., Mithas, S., Whitaker, J., and Roy, P. K. 2014.
“Industry-
Specific Human Capital and Wages: Evidence from the
Business
Process Outsourcing Industry,” Information Systems Research
(25:3), pp. 618-638.
Kohli, R. 2007. “Innovating to Create IT-Based New Nusiness
Opportunities at United Parcel Service,” MIS Quarterly
57. Executive
(6:4), pp. 199-210.
Kohli, R., and Devaraj, S. 2003. “Measuring Information
Tech-
nology Payoff: A Meta Analysis of Structural Variables in
Firm-
Level Empirical Research,” Information Systems Research
(14:2), pp. 127-145.
Kohli, R., and Devaraj, S. 2004. “Realizing the Business Value
of
Information Technology Investments: An Organization
Process,”
MIS Quarterly Executive (3:1), pp. 53-68.
Kohli, R., Devaraj, S., and Ow, T. T. 2012. “Does Information
Technology Investment Influence a Firm’s Market Value? A
Case of Non-Publicly Traded Healthcare Firms,” MIS Quarterly
(36:4), pp. 1145-1163.
Kohli, R., and Grover, V. 2008. “Business Value of IT: An
Essay
on Expanding Research Directions to Keep Up with the Times,”
Journal of the Association for Information Systems (9:1), pp.
23-39.
Kohli, R., and Hoadley, E. 2006. “Towards Developing a
Frame-
work for Measuring Organizational Impact of IT-Enabled BPR:
Case Studies of Three Firms,” The Data Base for Advances in
Information Systems (37:1), pp. 40-58.
Kohli, R., and Johnson, S. 2011. “Digital Transformation in
Late-
comer Industries: CIO and CEO Leadership Lessons from
58. Encana Oil & Gas (USA) Inc.,” MIS Quarterly Executive (10:4),
pp. 141-156.
Kohli, R., and Melville, N. P. 2009. “Learning to Build an IT
Innovation Platform,” Communications of the ACM (52:8), pp.
122-126.
Kude, T., Schmidt, C. T., Mithas, S., and Heinzl, A. 2015.
“Disci-
plined Autonomy and Innovation Effectiveness: The Role of
Team Efficacy and Task Volatility,” Academy of Management
Annual Meeting ,Vancouver, BC, Canada, August 7-11, 2015
Lariviere, B., Keiningham, T. L., Aksoy, L., Yalcin, A.,
Morgeson,
F. V., and Mithas, S. 2016. “Modeling Heterogeneity in the
Satisfaction, Loyalty Intention and Shareholder Value Linkage:
A Cross-Industry Analysis at the Customer and Firm Level,”
Journal of Marketing Research (53:1), pp. 91-109.
Lawrence, P. R. 1992. “The Challenge of Problem Oriented
Research,” Journal of Management Inquiry (1:2), pp. 139-142.
Lazic, M., Kude, T., and Heinzl, A. 2014. “Information Tech-
nology Governance and Cross-Unit Synergies Within Multi-
Business Firms,” Working Paper, University of Mannheim.
Lee, O.-K., Sambamurthy, V., Lim, K. H., and Wei, K. K.
2015.
“How Does IT Ambidexterity Impact Organizational Agility?,”
Information Systems Research (26:2), pp. 398-417.
MIS Quarterly Vol. 40 No. 1/March 2016 241
59. Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Leidner, D. E., Lo, J., and Preston, D. 2011. “An Empirical
Investigation of the Relationship of IS Strategy with Firm
Performance,” Journal of Strategic Information Systems (20),
pp.
419-437.
Leiponen, A., and Helfat, C. E. 2010. “Innovation Objectives,
Knowledge Sources, and the Benefits of Breadth,” Strategic
Management Journal (31:2), pp. 224-236.
Levin, R. 2013. “Driving the Top Line with Technology: An
Interview with the CIO of Coca-Cola,” McKinsey Insights and
Publications (available at http://www.mckinsey.com/insights/
business_technology/driving_the_top_line_with_technology_a
n_interview_with_the_cio_of_coca-cola).
Markides, C. C. 2013. “Business Model Innovation: What Can
the
Ambidexterity Literature Teach Us?,” Academy of Management
Perspectives (27:4), pp. 313-323.
Miles, R., Snow, C. C., Meyer, A. D., and Coleman, H. J. 1978.
“Organizational Strategy, Structure, and Process,” Academy of
Management Review (3:3), pp. 546-562.
Mithas, S. 2015. Making the Elephant Dance: The Tata Way
to
Innovate, Transform and Globalize, New Delhi: Penguin Port-
folio ((available at http://www.amazon.in/dp/B012G9MSCA).
Mithas, S., and Agarwal, R. 2010. “Information Technology
Governance for Revenue Growth at Johnson & Johnson,” Case
Study, Robert H. Smith School of Business, University of
60. Maryland, College Park.
Mithas, S., and Jones, J. L. 2007. “Do Auction Parameters
Affect
Buyer Surplus in E-Auctions for Procurement?,” Production and
Operations Management (16:4), pp. 455-470.
Mithas, S., and Krishnan, M. S. 2009. “From Association to
Causa-
tion Via a Potential Outcomes Approach,” Information Systems
Research (20:2), pp. 295-313.
Mithas, S., Krishnan, M. S., and Fornell, C. 2005. “Why Do
Customer Relationship Management Applications Affect Cus-
tomer Satisfaction?,” Journal of Marketing (69:4), pp. 201-209.
Mithas, S., Krishnan, M. S., and Fornell, C. 2016.
“Information
Technology, Customer Satisfaction, and Profit: Theory and
Evidence,” Information Systems Research (Forthcoming).
Mithas, S., Tafti, A. R., Bardhan, I. R., and Goh, J. M. 2012.
“Information Technology and Firm Profitability: Mechanisms
and Empirical Evidence,” MIS Quarterly (36:1), pp. 205-224.
Mithas, S., Tafti, A. R., and Mitchell, W. 2013. “How a Firm’s
Competitive Environment and Digital Strategic Posture
Influence
Digital Business Strategy,” MIS Quarterly (37:2), pp. 511-536.
Mitra, S., Sambamurthy, V., and Westerman, G. 2011.
“Measuring
IT Performance and Communicating Value,” MIS Quarterly
Executive (10:1), pp. 47-59.
Mittal, V., Anderson, E. W., Sayrak, A., and Tadikamalla, P.
61. 2005.
“Dual Emphasis and the Long-Term Financial Impact of
Customer Satisfaction,” Marketing Science (24:4), pp. 544-555.
Oh, W., and Pinsonneault, A. 2007. “On the Assessment of the
Business Value of Information Systems: Conceptual and Mea-
surement Alternatives,” MIS Quarterly (31:2), pp. 239-266.
O’Reilly III, C. A., and Tushman, M. L. 2004. “The
Ambidextrous
Organization,” Harvard Business Review (82:4), pp. 74-81.
Piccoli, G., and Ives, B. 2005. “Review: IT-Dependent
Strategic
Initiatives and Sustained Competitive Advantage: A Review
and
Synthesis of the Literature,” MIS Quarterly (29:4), pp. 747-776.
Porter, M. E. 1980. Competitive Strategy: Techniques for
Anal-
yzing Industries and Competitors, New York: Free Press.
Porter, M. E. 1985. Competitive Advantage: Creating and
Sus-
taining Superior Performance, New York: Free Press.
Porter, M. E. 1996. “What Is Strategy?,” Harvard Business
Review
(74:6), pp. 61-78.
Rai, A., Patnayakuni, R., and Patnayakuni, N. 1997.
“Technology
Investment and Business Performance,” Communications of the
ACM (40:7), pp. 89-97.
Raisch, S., and Birkinshaw, J. 2008. “Organizational Ambi-
62. dexterity: Antecedents, Outcomes and Moderators,” Journal of
Management (34:3), pp. 375-409.
Ramasubbu, N., Woodard, J., and Mithas, S. 2014.
“Orchestrating
Service Innovation Using Design Moves: The Dynamics of Fit
Between Service and Enterprise IT Architectures,” in Pro-
ceedings of the 34th International Conference on Information
Systems, Auckland, New Zealand, December 14-17.
Richard, P. J., Devinney, T. M., Yip, G. S., and Johnson, G.
2009.
“Measuring Organizational Performance: Towards Methodolo-
gical Best Practice,” Journal of Management (35:3), pp. 718-
804.
Rogers, W. H. 1993. “Regression Standard Errors in Clustered
Samples,” Stata Technical Bulletin 13 (13), pp. 19-23.
Ross, J. W., and Beath, C. M. 2002. “Beyond the Business
Case:
New Approaches to IT Investment,” MIT Sloan Management
Review (43), pp. 51-59.
Rossiter, J. R. 2002. “The C-OAR-SE Procedure for Scale
Devel-
opment in Marketing,” International Journal of Research in
Marketing (19), pp. 305-335.
Rust, R. T., Moorman, C., and Dickson, P. R. 2002. “Getting
Return on Quality: Revenue Expansion, Cost Reduction, or
Both?,” Journal of Marketing (66:4), pp. 7-24.
Rust, R. T., Moorman, C., and van Beuningen, J. 2015.
“Quality
Mental Model Convergence and Business Performance,” Inter-
63. national Journal of Research in Marketing (Forthcoming).
Saldanha, T., Mithas, S., and Krishnan, M. S. 2016.
“Leveraging
Customer Involvement for Fueling Innovation: The Role of
Relational and Analytical Information Processing Capabilities,”
MIS Quarterly (Forthcoming).
Schmidt, C. T., Kude, T., Heinzl, A., and Mithas, S. 2014.
“How
Agile Practices Influence the Performance of Software Devel-
opment Teams: The Role of Shared Mental Models and
Backup,” in Proceedings of the 34th International Conference
on
Information Systems, Auckland, New Zealand, December 14-17.
Skinner, W. 1986. “The Productivity Paradox,” Harvard
Business
Review (64:4), pp. 55-59.
Sviokla, J., and McGilloway, K. 2008. “How Technology
Ampli-
fied the Mortgage Crisis,” Harvard Business Review (available
at http://conve rsa tionsta rte r. hbsp. c om/2008/01/how_
technology_amplified_the_m.html).
Tafti, A., Mithas, S., and Krishnan, M. S. 2007. “Information
Technology and the Autonomy-Control Duality: Toward a
Theory,” Information Technology and Management (8:2), pp.
147-166.
Tafti, A., Mithas, S., and Krishnan, M. S. 2013. “The Effect of
Information Technology- Enabled Flexibility on Formation and
Market Value of Alliances,” Management Science (59:1), pp.
207-225.
64. Tallon, P. P. 2007. “Does IT Pay to Focus? An Analysis of IT
Business Value Under Single and Multi-Focused Business
Strategies,” Journal of Strategic Information Systems (16), pp.
278-300.
242 MIS Quarterly Vol. 40 No. 1/March 2016
Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Tallon, P. P. 2008. “A Process-Oriented Perspective on the
Alignment of Information Technology and Business Strategy,”
Journal of Management Information Systems (24:3), pp. 227-
268.
Tallon, P. P., Kraemer, K. L., and Gurbaxani, V. 2000.
“Execu-
tives’ Perceptions of the Business Value of Information Tech-
nology: A Process Oriented Approach,” Journal of Management
Information Systems (16:4), pp. 145-173.
Tambe, P. B., and Hitt, L. M. 2012. “The Productivity of
Informa-
tion Technology Investments: New Evidence from IT Labor
Data,” Information Systems Research (23:3, Part 1), pp. 599-
617.
Teece, D. J., Pisano, G., and Shuen, A. 1997. “Dynamic Capa-
bilities and Strategic Management,” Strategic Management
Journal (18:7), pp. 509-533.
Tiwana, A. 2010. “Systems Development Ambidexterity: Ex-
plaining the Complementary and Substitutive Roles of Formal
and Informal Controls,” Journal of Management Information
65. Systems (27:2), pp. 87-126.
Treacy, M., and Wiersema, F. 1993. “Customer Intimacy and
Other
Value Disciplines,” Harvard Business Review (71:1), pp. 84-93.
Wade, M., and Hulland, J. 2004. “Review: The Resource-
Based
View and Information Systems Research: Review, Extension,
and Suggestions for Future Research,” MIS Quarterly (28:1),
pp.
107-142.
Wanous, J. P., Reichers, A. E., and Hudy, M. J. 1997. “Overall
Job
Satisfaction: How Good Are Single-Item Measures?,” Journal
of Applied Psychology (82:2), pp. 247-252.
Weill, P., and Ross, J. 2009. IT Savvy: What Top Executives
Must
Know to Go from Pain to Gain, Boston: Harvard Business
School Press.
Whitaker, J., Mithas, S., and Krishnan, M. S. 2007. “A Field
Study
of RFID Deployment and Return Expectations,” Production and
Operations Management (16:5), pp. 599-612.
Williams, R. L. 2000. “A Note on Robust Covariance
Estimation
for Cluster-Correlated Data,” Biometrics (56:2), pp. 645-646.
Wooldridge, J. M. 2003a. “Cluster-Sample Methods in Applied
Econometrics,” American Economic Review (93:2), pp. 133-
138.
66. Wooldridge, J. M. 2003b. Introductory Econometrics: A
Modern
Approach, Mason, OH: Thomson.
Xue, L., Mithas, S., and Ray, G. 2014. “Earnings Management
and
IT Investments: An Examination of IT Infrastructure Develop-
ment,” in Proceedings of the 34th International Conference on
Information Systems, Auckland, New Zealand, December 14-17.
Zellner, A. 1962. “An Efficient Method of Estimating
Seemingly
Unrelated Regression Equations and Tests for Aggregation
Bias,”
Journal of the American Statistical Association (57), pp.
348-368.
About the Authors
Sunil Mithas is a professor at the Robert H. Smith School of
Business at the University of Maryland, where he is Research
Director for the Center for Excellence in Service and co-
director of
the Center for Digital Innovation, Technology and Strategy. He
is
the author of the books Digital Intelligence: What Every Smart
Manager Must Have for Success in an Information Age and
Dancing
Elephants and Leaping Jaguars: How to Excel, Innovate, and
Transform Your Organization the Tata Way. He was identified
as
2011 MSI Young Scholar by the Marketing Science Institute,
which
selects about 25 such scholars every two years. He has worked
on
research or consulting assignments with organizations such as
67. Johnson & Johnson, Lear, A. T. Kearney, the Tata group, the
Social
Security Administration, and the U.S. Census Bureau. His
papers
have won best paper awards and best paper nominations and
have
been featured in practice-oriented publications such as MIT
Sloan
Management Review, Bloomberg, CIO.com, Computerworld,
and
InformationWeek.
Roland T. Rust is Distinguished University Professor and David
Bruce Smith Chair in Marketing at the Robert H. Smith School
of
Business at the University of Maryland, where he is Executive
Director of the Center for Excellence in Service and the Center
for
Complexity in Business. He is Visiting Chair in Marketing
Research at Erasmus University and International Research
Fellow
at Oxford University’s Center for Corporate Reputation. He has
won top career contributions awards in services, marketing
research,
marketing strategy and advertising, as well as an honorary
doctorate
in economics. He was Editor of the Journal of Marketing,
founded
the Frontiers in Service Conference, and was founding Editor of
the
Journal of Service Research. He is currently vice president of
External Relations for the European Marketing Academy
(EMAC)
and editor of International Journal of Research in Marketing.
MIS Quarterly Vol. 40 No. 1/March 2016 243
68. Mithas & Rust/Influence of IT Strategy and Investments on
Firm Performance
Appendix
This appendix provides further discussion on why endogeneity
is not a significant concern in our analyses. We begin by noting
that
endogeneity typically arises when (1) both dependent and
independent variables are simultaneously determined, or (2)
when reverse causality
is suspected (i.e., when the dependent variable causes
independent variables). First, regarding the situation in which
endogeneity arises from
the simultaneity of IT investments and firm performance, one
way to rule this out is by conducting a formal test for
endogeneity following a
procedure suggested by Wooldridge (2003b, p. 506) and used in
prior IS research (see Mithas et al. 2012). The intuition for this
procedure is
that instrumental variable approaches to deal with endogeneity
are less efficient than OLS when the explanatory variables are
exogenous.
Therefore, Wooldridge (2003b, p. 506) suggests a test to assess
whether an explanatory variable is endogenous before making
indiscriminate
use of 2SLS. The test is based on the idea that both OLS and
2SLS are consistent if all variables are exogenous, but if 2SLS
and OLS estimates
differ significantly then we may conclude that the explanatory
variable may be endogenous. In accordance with this
procedure, we regressed
the value of IT investments on lagged values of IT investment.2
We used the predicted value of IT investments from this model