The Impact of IT Governance on Organizational Performance

Abstract

IT governance, as a subset of corporate governance, consists of organizational structures and processes that ensure theorganization’s IT can sustain and extend the organization’s strategies and objectives. In previous research, different types ofIT governance have been proposed. However, it is not clear how different governance types affect firm performance andwhat are the theories underlying the causal relationships. Drawing from strategic alignment and coordination theories, aresearch model is proposed for investigating how intra-organizational coordination could help build goal congruence throughstrategic alignment and hence achieve higher organizational performance. The purpose of this research is to examine therelationship between IT governance, strategic alignment, and organizational performance. Data collected from 167Taiwanese firms were used to empirically evaluate the theoretical relationships proposed in the research model, and theresults show that strategic alignment is a major factor that mediates the effect of IT governance on firm performance.

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