Causal Structure of IT Management Effectiveness in Japanese Companies

Abstract

The purpose of this paper is to clarify the mechanism of how IT creates business value, particularly from the viewpoint of IT management effectiveness. To do this, we developed a hypothetical structural model that consists of six performance indicators, such as awareness and actions of top management, linkage between management and IT, IT development capability, IT investment and deployment, IT readiness, and business value creation from IT. Based on the analyses of data collected from five hundred and nine major companies comprising various types of businesses in Japan, we found that awareness and actions of top management lead to business value creation from IT via other interim factors, e.g., linkage between management and IT. Also, we found that the causal structure of IT management effectiveness remains largely stable regardless of scales and types of business of the companies.