Understanding IT Governance Effectiveness in Asia: An Event Study

Abstract

The study seeks to examine the impact of Information technology (IT) governance structure, process and relational mechanisms on firm performance. Using an event study, we collected a sample of 70 announcements of IT governance adoption investments. We found that most firms adopt all three types of IT governance mechanisms. IT governance structural mechanisms have a positive impact on firm's profitability. In contrast, IT governance process and relational mechanisms have a negative association with firm performance. More interestingly, the findings provide insight for organizations that they should realize the potentially negative impact of the controls requirements of Sarbanes-Oxley Act Section 404 and IT leadership on firm performance.

IT Governance as Drivers of Dynamic Capabilities to Gain Corporate Performance Under the Effects of Environmental Dynamism

“…There are a lot of interesting definitions and also sources of information on IT Governance [see the IT Governance Institute (www.itgi.org)] that provides a series of toolkits, audit guidelines, and education offerings to focus on operational implementation and control of IT use; or firm capacity to formulate, implement, execute, and control IT strategy related with the board, executive management, and IT management (Chong & Duong, 2017;Muammar & Nicho, 2019;Parry & Lind, 2016;Weill & Ross, 2004).…”

The Impact of It Governance Practices on Profitability: Mediating Role of Financial Technology Adoption

“…Vugee et al (2017Vugee et al ( ), using longitudinal data (2005Vugee et al ( -2015, measure ITGOV practice based on the number of board members with IT education background. The result supported by Chong & Duong (2017) is that the ITGOV practice mechanism shows mixed results on profitability. Thus, there are still differences in the results of previous studies related to the effect of ITGOV on profitability.…”

“…Research results from Hamdan et al (2019) and Awwad and Khoury (2021) show that ITGOV positively impacts company profitability. Meanwhile, Chong and Duong (2017) show that several ITGOV mechanisms positively and negatively impact profitability. Based on this description, there still needs to be consistent research results, and by using a comprehensive proxy of ITGOV practice, this study predicts a positive impact on profitability.…”

“…Previous studies that analyze ITGOV practice use a short data period of 1 year (Chong & Duong, 2017). In addition, ITGOV practice is proxied based on the old COBIT standard (Hamdan et al, 2019;Awwad & Khoury, 2021;Alansari et al, 2021).…”

Impacts of IT Governance in Expanding Market Shares of Online Stores

“…The reflection is that such the governance controls responsibilities of the commissioner board, leaders, and IT management in developing management of businesses, IT organization structures, strategy of businesses and IT, and processes in IT management to reach organizational goals through proper application [28]. The only effort to strengthen organizational relationships with IT governance is through linkage of structures, processes, and mechanisms [29]. Again, it is clarified that it also becomes the capability of the top management to control formulation and implementation of IT strategy through organizational structures and processes in producing desired behavioras certaining continual use of IT and expanding strategy and goals of organizations.…”