ALLOCATION OF IT DECISION RIGHTS IN MULTIBUSINESS ORGANIZATIONS: WHAT DECISIONS, WHO MAKES THEM, AND WHEN ARE THEY TAKEN?

Abstract

Effective IT governance is an important requirement for strategic IT-based change. The extant literature focuses on which IT decisions should be governed and who is accountable for them. However, in multi-business organizations there is little theoretical guidance on which decisions should be made at the corporate and strategic business unit (SBU) levels, or when such decisions should be made as part of the corporate and SBU strategy processes. This paper draws on the strategic management literature to develop a theoretical framework for allocating IT decision rights between business and IT at the corporate and SBU levels. Importantly, the framework also unbundles corporate IT platform and SBU IT decision making across the corporate investment cycle. This is achieved by adopting a real options-based pricing investment model to reduce risk, uncertainty and complexity. The theoretical framework is illustrated with in-depth longitudinal case study and compared against existing normative IT governance prescriptions.

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