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Abstract
It is broadly believed that Chief information officers (CIO) should be formal members of their firms’ top management teams (TMT) for information systems to have a valuable contribution towards a firm’s performance. The CIO presence in the TMT promises several important benefits for the CIO position itself, and for IT and the firm in general. However, this belief is problematic. CIO presence does not always yield good business outcomes. Historically, the CIO position is not a core function in the TMT. Many CIOs lack the business background necessary to be part of the C-suite. This is mainly due to the dominance of knowledge specialization at the top level. Moreover, in the last few years, CIOs have been facing new pressures and uncertainties due to evolutions in the technology landscape and new organizational demands for digitalization and transformation.In this dissertation, we theoretically propose that for the CIO to generate valuable organizational contributions, the CIO presence in the TMT is not enough. There should overlap in domain knowledge between CIOs and TMT executives to elevate CIO presence impact. More specifically, we propose that TMT digital savviness will augment the contribution of CIO business savviness on relative firm performance for those CIOs who are part of the TMT. To achieve that, we study two ideas related to the impact of the CIO presence. First, we directly examine the CIO presence in the TMT impact on relative firm performance. Second, we examine how to increase the CIO presence impact on relative firm performance by proposing that TMT digital savviness will augment the CIO’s business savviness impact on relative firm performance. Data about public U.S. firms in the period 2015-2018 were collected and analyzed by utilizing a lagged cross-sectional design and using econometric techniques.
The results show that the CIO presence has a negative impact on relative firm performance. However, for those CIOs in the TMT, their business savviness impact on relative firm performance is augmented with high TMT digital savviness. Such an impact is only significant when CIO business savviness is low. Our findings challenge the IS field’s current dominant view that the CIO presence would result in positive outcomes and show that TMT executives should be digitally savvy for CIOs to show greater influence. Moreover, we show how to measure the CIOs and TMTs shared domain knowledge using archival data. We theoretically contribute to the knowledge-based view of the firm, knowledge specialization, and the information processing perspective.