Advertisement

IT Governance Practices in Small and Medium-Sized Enterprises: Recommendations from an Empirical Study

Conference paper
Part of the IFIP Advances in Information and Communication Technology book series (IFIPAICT, volume 301)

Abstract

Much has been learned through IT governance research about the nature of IT-related decisions, the location of decision rights for these decisions, and governance mechanisms applied to facilitate associated decision processes in large organisations. Our knowledge about IT governance structures in small and medium-sized enterprises (SME), on the other hand, is quite limited. Adopting a qualitative and inductive approach, this study examines the nature and influence of IT governance in SMEs through interviews with executives from three SMEs. Our results demonstrate that IT decision authority was centralized in all three SMEs but that senior management involvement in governance procedures and communication practices about governance policies were observed to explain differences in these organisations’ IT use. We propose recommendations based on the findings of this study.

Keywords

Operational Executive Governance Structure Senior Management Steering Committee Governance Mechanism 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Bianchi, C.: Introducing SD modeling into planning and control systems to management SME’s growth: a learning-oriented perspective. Systems Dynamics Review 18(3), 403–429 (2002)MathSciNetCrossRefGoogle Scholar
  2. Blau, P.M., Schoenherr, R.A.: The Structure of Organisations. Basic Books, New York (1971)Google Scholar
  3. Bourgeois, L.J., Eisenhardt, K.M.: Strategic Decision Processes in High Velocity Environments: Four Cases in the Mircrocomputer Industry. Management Science 34(7), 816–835 (1988)CrossRefGoogle Scholar
  4. Brown, A.E.: Framing the frameworks: A review of IT governance research. Communication of the Association for Information Systems 15, 696–712 (2005)Google Scholar
  5. Brown, C.V.: Examining the Emergence of Hybrid IS Governance Solutions: Evidence from a Single Case Site. Information Systems Research 8(1), 69–94 (1997)CrossRefGoogle Scholar
  6. Brown, C.V., Magill, S.L.: Reconceptualizing the Context-Design Issue for the Information Systems Function. Organisation Science 9(2), 176–194 (1998)CrossRefGoogle Scholar
  7. Carlson, J.R., Zmud, R.W.: Channel Expansion Theory and the Experiential Nature of Media Richness Perceptions. Academy of Management Journal 42(2), 153–170 (1999)CrossRefGoogle Scholar
  8. Child, J.: Organisational Structure, Environment and Performance: The Role of Strategic Choice. Sociology 6(1), 1–22 (1972)CrossRefGoogle Scholar
  9. Cross, J., Earl, M.J., Sampler, J.L.: Transformation of the IT function at British Petroleum. MIS Quarterly 21(4), 401–424 (1997)CrossRefGoogle Scholar
  10. Daft, R.L., Lengel, R.H.: Organisational Information Requirements, Media Richness and Structural Design. Management Science 32(5), 554–571 (1986)CrossRefGoogle Scholar
  11. Doll, W.J.: Avenues for top management involvement in successful MIS development. MIS Quarterly 9(1), 17–35 (1985)CrossRefGoogle Scholar
  12. Doll, W.J., Torkzadeh, G.: The Relationship of MIS Steering Committeteo Size of Firm and Formalization of MIS Planning. Communications of the ACM 30(11), 7 (1987)CrossRefGoogle Scholar
  13. Dubé, L., Paré, G.: Rigor in Information Systems Positivist Case Research: Current Practices, Trends, and Recommendations. MIS Quarterly 27(4), 597–635 (2003)Google Scholar
  14. Earl, M.J., Feeny, D.F.: Is Your CIO Adding Value. Sloan Management Review 35(3), 10 (1994)Google Scholar
  15. Edmondson, A.C., Winslow, A.B., Bohmer, R.M., Pisano, G.P.: Learning How and Learning What: Effects of Tacit and Codified Knowledge on Performance Improvement Following Technology Adoption. Decision Science 34(2), 197–223 (2003)CrossRefGoogle Scholar
  16. Ein-Dor, P., Segev, E.: Organisational Context and MIS Structure: Some Empirical Evidence. MIS Quarterly 6(3), 55–68 (1982)CrossRefGoogle Scholar
  17. Eisenhardt, K.M.: Building Theories from Case Study Research. Academy of Management Review 14(4), 532–550 (1989)Google Scholar
  18. Feldman, D.C.: The Multiple Socialization of Organisation Members. The Academy of Management Review 6(2), 309–318 (1981)CrossRefGoogle Scholar
  19. Foong, S.Y.: Effect of end user personal and systems attributes on computer based information system success in Malaysian SMEs. Journal of Small Business Management 37(3), 81–87 (1999)Google Scholar
  20. Ghobadian, A., Gallear, D.N.: Total quality management in SMEs. Omega 24(1), 83–106 (1996)CrossRefGoogle Scholar
  21. Granovetter, M.: Economic Action and Social Structure: The Problem of Embeddedness. American Journal of Sociology 91, 481–510 (1985)CrossRefGoogle Scholar
  22. Granovetter, M.: Problems of explanation in economic sociology. In: Nohria, N., Eccles, R.G. (eds.) Networks and Organisations: Structure, Form, and Action, pp. 25–56. Harvard Business School Press, Boston (1992)Google Scholar
  23. Gulati, R.: Alliances and networks. Strategic Management Journal 19(4), 293–317 (1998)CrossRefGoogle Scholar
  24. Hadjimanoulis, A.: A resource-based view of innovativeness in small firms. Technology Analysis and Strategic Management 12(2), 263–281 (2000)CrossRefGoogle Scholar
  25. Hagmann, C., McCahon, C.: Strategic information systems and competitiveness: are firms ready for an IST-driven competitive challenge? Information & Management 25, 183–192 (1993)CrossRefGoogle Scholar
  26. Hall, R.H.: Organisations, Structure and Process. Prentice-Hall, Englewood Cliffs (1972)Google Scholar
  27. Hay, M., Kamshad, K.: Small firm growth: intentions, implementation and impediments. Business Strategy Review 5(3), 49–68 (1994)CrossRefGoogle Scholar
  28. Huber, G.P.: A Theory of the Effects of Advanced Information Technologies on Organisational Design, Intelligence, and Decision Making. Academy of Management Review 15(1), 47–71 (1990)Google Scholar
  29. Jenkins, J.M., Santos, R.F.: Centralization vs. Decentralization of Data Processing Functions. In: Goldberg, R., Lorin, H. (eds.) The Economics of Information Processing, pp. 62–67. Whiley-Interscience, New York (1982)Google Scholar
  30. Jones, C., Hesterly, W.S., Borgatti, S.P.: A General Theory of Network Governance: Exchange Conditions and Social Mechanisms. Academy of Management Review 22(4), 911–945 (1997)Google Scholar
  31. Kale, P., Singh, H., Perlmutter, H.: Learning and Protection of Proprietary Assets in Strategic Alliances: Building Relational Capital. Strategic Management Journal 21, 217–237 (2000)CrossRefGoogle Scholar
  32. Kaplan, B., Maxwell, J.A.: Qualitative Research Methods for Evaluating Computer Information Systems. In: Anderson, J.G., Aydin, C.E. (eds.) Evaluating Health Care Information Systems: Methods and Applications, pp. 45–68. Sage, Thousand Oaks (1994)Google Scholar
  33. Keasey, K., Watson, R.: Small firm management. Blackwell, Cambridge (1993)Google Scholar
  34. Krishnan, M.S., Rai, A., Zmud, R.W.: Editorial Overview: The Digitally Enabled Extended Enterprise in a Global Economy. Information Systems Research 18(3), 233–236 (2007)CrossRefGoogle Scholar
  35. Lengel, R.H., Daft, R.L.: The selection of communication media as an executive skill. Academy of Management Executive 2, 225–232 (1988)CrossRefGoogle Scholar
  36. Levy, M., Powell, P.: Strategies for growth in SMEs. Elsevier, Burlington (2005)Google Scholar
  37. Lewis, W., Agarwal, R., Sambamurthy, V.: Sources of Influence on Beliefs about Information Technology Use: An Empirical Study of Knowledge Workers. MIS Quarterly 27(4), 657–678 (2003)Google Scholar
  38. Lind, M., Zmud, R.W.: Improving Interorganisational Effectiveness through Voice Mail Facilitation of Peer-to-Peer Relationships. Organisation Science 6(4), 445–461 (1995)CrossRefGoogle Scholar
  39. Lybaert, N.: The information use in a SME: its importance and some elements of influence. Small Business Economics 10, 171–191 (1998)CrossRefGoogle Scholar
  40. McKeen, J.D., Guimaraes, T.: Selecting MIS Projects by Steering Committee. Communications of the ACM (December 9, 1985)Google Scholar
  41. Meyer, M.W.: Size and the Structure of Organisations: A Causal Model. American Sociological Review 37(4), 434–440 (1972)CrossRefGoogle Scholar
  42. O’Reilly, C.A.: Variations in Decision Makers’ Use of Information Sources: The Impact of Quality and Accessibility of Information. Academy of Management Journal 25(4), 756–771 (1982)CrossRefGoogle Scholar
  43. Porter, M.E.: Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, New York (1985)Google Scholar
  44. Pugh, D.S., Hickson, D.J., Hinings, C.R., Turner, C.: Dimensions of Organisation Structure. Administrative Science Quarterly 13(1), 65–105 (1968)CrossRefGoogle Scholar
  45. Reich, B.H., Benbasat, I.: Factors That Influence the Social Dimension of Alignment between Business and Information Technology Objectives. MIS Quarterly 24(1), 81–113 (2000)CrossRefGoogle Scholar
  46. Ross, J.W., Beath, C.M., Goodhue, D.L.: Develop Long-Term Competitiveness through IT Assets. Sloan Management Review 11 (Fall 1996)Google Scholar
  47. Rowley, T., Behrens, D., Krackhardt, D.: Redundant governance structures: an analysis of structural and relational embeddedness in the steel and semiconductor industries. Strategic Management Journal 21(3), 369–386 (2000)CrossRefGoogle Scholar
  48. Rumelt, R.P.: How Much Does Industry Matter? Strategic Management Journal 12(3), 167–185 (1991)CrossRefGoogle Scholar
  49. Sambamurthy, V., Bharadwaj, A., Grover, V.: Shaping Agility through Digital Options: Reconceptualizing the Role of Information Technology in Contemporary Firms. MIS Quarterly 27(2), 237–263 (2003)Google Scholar
  50. Sambamurthy, V., Zmud, R.W.: Managing IT for success: The empowering business partnership. Financial Executive Research Foundation, New Jersey (1992)Google Scholar
  51. Sambamurthy, V., Zmud, R.W.: Arrangements for Information Technology Governance: A Theory of Multiple Contingencies. MIS Quarterly 23(2), 261–290 (1999)CrossRefGoogle Scholar
  52. Schmitz, J., Fulk, J.: Organisational colleagues, media richness, and electronic mail: A test of the social influence model of technology use. Communication of the Association for Information Systems 18, 487–523 (1991)Google Scholar
  53. Segars, A.H., Grover, V.: Strategic Information Systems Planning Success: An Investigation of the Construct and Its Measurement. MIS Quarterly 22(2), 139–163 (1998)CrossRefGoogle Scholar
  54. Starbuck, W.H.: Handbook of Organisations. Rand-McNally, Chicago (1965)Google Scholar
  55. Storey, D.: Understanding the Small Business Sector. Routledge, London (1994)Google Scholar
  56. Storey, D., Sykes, N.: Uncertainty, innovation and management. In: Burns, P., Dewhurst, J. (eds.) Small Business and Entrepreneurship, pp. 73–93. Macmillan, London (1996)CrossRefGoogle Scholar
  57. Street, C.T., Meister, D.B.: Small Business Growth and Internal Transparency: The Role of Information Systems. MIS Quarterly 28(3), 473–506 (2004)Google Scholar
  58. Tallon, P.P., Kraemer, K.L., Gurbaxani, V.: Executives’ Perceptions of the Business Value of Information Technology: A Process-Oriented Approach. Journal of Management Information Systems 16(4), 145–173 (2000)CrossRefGoogle Scholar
  59. Te’eni, D.: Review: A Cognitive-Affective Model of Organisational Communication for Designing IT. MIS Quarterly 25(2), 251–312 (2001)CrossRefGoogle Scholar
  60. Thong, J.Y.L.: Resource constraints and information systems implementation in Singaporean small businesses. Omega 29(2), 143–156 (2001)CrossRefGoogle Scholar
  61. Thong, Y.L.: An Integrated Model of Information Systems Adoption in Small Businesses. Journal of Management Information Systems 15(4), 187–214 (1999)CrossRefGoogle Scholar
  62. Torkzadeh, G., Xia, W.: Managing Telecommunications by Steering Committee. MIS Quarterly 16(2), 13 (1992)CrossRefGoogle Scholar
  63. Uzzi, B.: The Sources and Consequences of Embeddedness for the Economic Performance of Organisations: The Network Effect. American Sociological Review 61(4), 674–698 (1996)CrossRefGoogle Scholar
  64. Vadapalli, A., Mone, M.A.: Information technology project outcomes: user participation structures and the impact of organisation behavior and human resource management issue. Journal of Engineering and Technology Management 17(2), 25 (2000)CrossRefGoogle Scholar
  65. Walker, G., Kogut, B., Shan, W.: Social Capital, Structural Holes and the Formation of an Industry Network. Organisation Science 8(2), 109–125 (1997)CrossRefGoogle Scholar
  66. Weill, P.: Don’t just lead, govern: How top-performing firms govern IT. MIS Quarterly Executive 3(1), 1–17 (2004)Google Scholar
  67. Weill, P., Ross, J.W.: IT Governance: How Top Performers Manage IT Decision Rights for Superior Results. Harvard Business School Press, Boston (2004)Google Scholar
  68. Weill, P., Ross, J.W.: A Matrixed Approach to Designing IT Governance. Sloan Management Review 46(2), 9 (2005)Google Scholar
  69. Wilensky, H.: Hierarchical Control and Optimum Firm Size. Journal of Political Economy 75(2), 123–138 (1967)CrossRefGoogle Scholar
  70. Yin, R.: Case Study Research. Sage Publications, Beverly Hills (1984)Google Scholar
  71. Zmud, R.W., Boynton, A.C., Jacobs, G.C.: The Information Economy: A New Perspective for Effective Information Systems Management. Data Base 18(1), 17–23 (1986)CrossRefGoogle Scholar

Copyright information

© IFIP International Federation for Information Processing 2009

Authors and Affiliations

  1. 1.School of ManagementState University of New York at BinghamtonUSA
  2. 2.Michael F. Price College of BusinessUniversity of OklahomaUSA

Personalised recommendations