Examining the Antecedents and Consequences of CIO Strategic Decision‐Making Authority: An Empirical Study*

Abstract

Despite the strategic importance of information technology (IT) to contemporary firms, chief information officers (CIO) often still have varying degrees of strategic decisionmaking authority. In this study, we apply the theory of managerial discretion to define CIO strategic decision-making authority and argue that the CIO's level of strategic decision-making authority directly influences IT's contribution to organization performance. We also draw on the power and politics perspective in the strategic decisionmaking literature to identify the direct antecedents to the CIO's strategic decisionmaking authority. A theoretical model is presented and empirically tested using survey data collected from a cross-industry sample of 174 matched pairs of CIOs and top business executives through structural equation modeling. The results suggest that organizational climate, organizational support for IT, the CIO's structural power, the CIO's level of strategic effectiveness, and a strong partnership between the CIO and top management team directly influence the CIO's level of strategic decision-making authority within the organization. The results also suggest that the CIO's strategic decision-making authority in the organization directly influences the contribution of IT to firm performance and that effective CIOs have a greater influence on IT's contribution when provided with strategic decision-making authority.

Chief information officers: an empirical study of competence, organisational positioning and implications for performance

“…Organisational position of the CIO is most often considered in terms of structural power i.e. the rank of the CIO reflected by reporting level (Banker et al, 2004;Karimi et al, 1996), and in terms of political relationships reflected by the frequency of the CIO's interaction with the chief executive of the organisation, and the CIO's active involvement in the organisation's top management team (TMT) (Armstrong & Sambamurthy, 1999;Smaltz et al, 2006;Preston, Chen & Leidner, 2008).…”

“…Power stems from authority and is inherent in the official position of managers and executives. Structural power provides the CIO with a legitimate base for influencing organisational action (Preston et al, 2008). However, since IS&T implementations are organisational in scope and affect processes and structures across organisations, it has also been suggested that CIOs need to gain commitment of fellow TMT members for IS&T induced changes (Enns, Huff & Golden, 2001 (Eisenhardt & Bourgeois, 1988).…”

“…However, since IS&T implementations are organisational in scope and affect processes and structures across organisations, it has also been suggested that CIOs need to gain commitment of fellow TMT members for IS&T induced changes (Enns, Huff & Golden, 2001 (Eisenhardt & Bourgeois, 1988). The CIO establishes these political relationships through interaction and participation with the CEO and TMT, which provides the CIO with avenues for conflict resolution, cooptation and coalition formation (Eisenhardt & Zbaracki, 1992) that can increase CIO power (Preston et al, 2008). Political relationship provides the CIO with the means to influence organisational action and the behaviour of other organisational members, to overcome resistance (Pfeffer, 1992), and become part of the 'dominant coalition' (Thompson, 1967).…”

“…CIOs with little power or political influence, CIOs who are considered low level managers, and CIOs viewed only as occasional technical consultants to the TMT will find it difficult to obtain managerial support of and input into IS&T implementation processes (Stephens et al, 1992;Enns et al, 2001;Preston et al, 2008), and consequently will be ineffective in increasing IS&T contribution to the organisation.…”

“…Yet descriptive research into the CIO role has not consistently been undertaken (Gottschalk & Taylor, 2000;Grover et al, 1993); empirical work is only just emerging into the effects of CIO background and demography (Li, Tan, Teo & Tan, 2006;Sobol & Klein, 2009); and despite some efforts, the determinants and consequences of CIO hierarchical level and engagement with the CEO and top management team are not fully understood (Feeny, Edwards & Simpson, 1992;Banker, Hu & Pavlou, 2004;Karimi, Gupta & Somers, 1996;Armstrong & Sambamurthy, 1999;Enns, Huff & Higgins, 2003;Johnson & Lederer, 2005;Preston, Karahanna & Rowe, 2006;Ranganathan & Jha, 2008). The concept of CIO role effectiveness has only recently gained attention and scholars are just beginning to ask questions about the capabilities and characteristics of CIOs that result in improved role effectiveness and consequent company performance (Ravarini, Moro, Tagliavini & Guimaraes, 2001;Pigni, Ravarini, Tagliavini, Moro & Guimaraes, 2002;Smaltz, Sambamurthy & Agarwal, 2006;Lane & Koronios, 2007;Chen & Preston, 2008;Wu, Chen & Sambamurthy, 2008).…”