Management Science and Financial Engineering

The Korean Operations Research and Management Science Society (한국경영과학회)
권호 표지

Firm Size and Different Behaviors in IT Investment Decisions

  • Shim, Seon-Young (Dept. of Business Administration, College of Social Science, Sungshin Women's University) ;
  • Lee, Byung-Tae (Graduate School of Management, Korea Advanced Institute of Science and Technology)
  • Received : 2008.03.15
  • Accepted : 2009.12.20
  • Published : 2010.09.30
Download PDF
⟨ Previous Next ⟩

Abstract

The influencing factors of large-scale IT investment decisions are rarely investigated in an empirical perspective. We find out different behaviors in IT investment decisions according to the size of organization. Large scale IT-investment decisions (e.g. system downsizing) can be the outcome of decision-makers' motivation to adopt and control new IT systems- However, this phenomenon is salient in the large-sized organization rather than small-sized ones. Based on our investigation, we predict general IT decision-making behaviors in organizations when making IT investment decisions.

Keywords

References

  1. Abrhamson, E. and L. Rosenkopf, "Institutional and Competitive Bandwagons: Using Mathematical Modeling as a Tool to Explore Innovation Diffusion," The Academy of Management Review 18, 3 (1993), 487‐517.
  2. Adeleye, B. C., F. Annansingh and M. B. Nunes, "Risk management practices in IS outsourcing: an investigation into connercial banks in Nigeria," International Journal of Information Management 24 (2004), 167‐180. https://doi.org/10.1016/j.ijinfomgt.2003.10.004
  3. Alter, S., "Implementation Risk Analysis," TIMS Studies in Management Science 13, 2 (1979), 103‐119.
  4. Anderson, J. and R. Narashimhan, "Assesing Project Implementation Risk: A Methodological Approach," Management Science 25, 6 (1979), 512‐521. https://doi.org/10.1287/mnsc.25.6.512
  5. Arrow, K. J., "Aspects of the Theory of Risk Bearing," Yrjo Jahnsson Lectures, Helsinki, Reprinted in 1971, Essays in the Theory of Risk Bearing (Chicago: Markham) 1965.
  6. Bisbal, J. et al., "An Overview of Legacy System Downsizing," apsec, Fourth Asia‐Pacific Software Engineering and International Computer Science Conference (APSEC '97 / ICSC '97), 1997.
  7. Chau, P. Y. K. and K. Y. Tam, "Factors Affecting the Adoption of Open Systems: An Exploratory Study," MIS Quarterly 21, 1 (1997), 1‐24. https://doi.org/10.2307/249740
  8. Davis‐Blake, A. and J. Pfeffer, "Just a Mirage: The Search for Dispositional Effects in Organizational Research," Academy of Management Review 14 (1989), 385‐400.
  9. Davis, G., "Strategies for Information Requirements Determination," IBM Systems Journal 21, 1 (1982), 4‐30. https://doi.org/10.1147/sj.211.0004
  10. DDaily, "Why only in Korea: Declining IBM mainframe," 2007, available at http://www.ddaily.co.kr/news/?fn = view&article_num = 21536.
  11. Dedrick, J. and J. West, "Why Firms Adopt Platform Standards: A Ground Theory of Open Source Platforms," Standard Making: A Critical Research Frontier for Information Systems, MIS Quarterly Special Issue Workshop, Seattle , WA, 2003.
  12. Demsetz, R. S. and P. E. Strahan, "Diversification, Size, and Risk at Bank Holding Companies," Journal of Money, Credit and Banking, 1997.
  13. DiMaggio, P. J. and W. W. Powell, "The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields," American Sociological Review 42, 2 (1983), 147‐160.
  14. Ellram, L. M., "A Taxonomy of Total Cost of Ownership Models," Journal of Business Logistics 15, 1 (1994), 171‐192.
  15. Fink, D., "Guidelines for the Successful Adoption of Information Technology in Small and Medium Enterprises," International Journal of Information Management 18, 4 (1998), 243‐253. https://doi.org/10.1016/S0268-4012(98)00013-9
  16. Fornell C. and D. F. Larcker, "Structural Equation Models with Unobservable Variables and Measurement Errors," Journal of Marketing Research 18, 2 (1981), 39‐50. https://doi.org/10.2307/3151312
  17. Gibbs, W. W., "Software's Chronic Crisis," Scientific American 271, 3 (1994), 86‐95. https://doi.org/10.1038/scientificamerican0994-86
  18. Greenbaum, J., "Grasp the Limitations of Total Cost of Ownership, or else you'll be misled," Management Automation 20, 5 (2005), 20.
  19. HiTech Information, "Special Report on Mainframe Downsizing," 2004/0701, available at http://www.hitech.co.kr.
  20. IDC "Global Enterprise Server Tracker, Q4 2006," 2006, available at www.idc.com.
  21. Jiang, J. J. and G. Klein, "Risks to Different Aspect of System Success," Information and Management 35 (1999), 263‐272.
  22. Kahneman D. and A. Tversky, "Prospect Theory: An Analysis of Decision Under Risk," Econometrica 47 (1979), 263‐291. https://doi.org/10.2307/1914185
  23. Kankanhalli A. et al., "An Integrative Study of Information Systems Security Effectiveness, " International Journal of Information Systems 12, 4 (1996), 35‐53.
  24. MacCrimmon, K. R. and D. A. Wehrung, "Characteristics of Risk‐taking executives," 36, 4 (1990), 422‐435. https://doi.org/10.1287/mnsc.36.4.422
  25. March, J. G., "Variable Risk Preferences and Adaptive Aspirations," Journal of Economic Behavior and Organization 9 (1988), 5‐24.
  26. March, J. G. and W. Shapira, "Managerial Perspectives on Risk and Risk Taking," Management Science 33, 11 (1987), 1404‐1418. https://doi.org/10.1287/mnsc.33.11.1404
  27. McCready, S., "TCO, NPV, EVA, IRR, ROI Getting the Terms Right," CIOVeiw White Paper, 2005.
  28. McFarlan, F. W., "Portfolio Approach to Information Systems," Harvard Business Review 81510 (1981), 142‐150.
  29. Mentzer, M. S., "Corporate Downsizing and Profitability in Canada," Canadian Journal of Administrative Science 13, 3 (1996), 237‐250.
  30. Moynihan, T., "How Experienced Project Mangers Assess Risk," IEEE Software (1997), 35‐41.
  31. OTR Group, "Report Detailed in Computer Weekly," Dec., 1992.
  32. Parker, M., R. Benson, and E. Trainor, "Information Economics:Linking Business Performance to Information Technology," Prentice Hall, Englewood Cliffs, NJ, 1988.
  33. Schmidt, R. et al., "Identifying Software Project Risks: An International Delphi Study," Journal of Management Information Systems 17, 4 (2001), 5‐36. https://doi.org/10.1080/07421222.2001.11045662
  34. Schwarzer, R., "Optimism, Vulnerability, and Self‐beliefs as Health‐related cognitions: A Systematic Overview," Psychology and Health 9 (1994), 161‐180. https://doi.org/10.1080/08870449408407475
  35. Tornatzky, L. G. and M. Fleischer, "The Processes of Technological Innovation," Lexington, MA: Lexington Books, 1990.
  36. Vitale, M. R. "The Growing Risks of Information Systems Success," Mis Quartely 10, 4 (1986), 327‐334. https://doi.org/10.2307/249185
  37. Weill P. and J. Ross, "IT Governance: How Top Performers Manage IT Decision Rights for Superior Results," Harvard Business School Press, 2005.
  38. Whisler, T. L., The Impact of Computers on Organizations, Praeger Publishers, New York, New York (1970), 188.
  39. Willcocks, L. and H. Margetts, "Risk Assessment and Information Systems," European Journal of Information Systems 3, 2 (1994), 127‐138. https://doi.org/10.1057/ejis.1994.13
  40. Wold, H., "Systems Under Indirect Observation Using PLS," C. Fornell(Ed.), Praeger, New York (1982), 325‐347.
  41. Xu, S., K. Zhu, and J. Gibbs, "Global Technology, Local Adoption: A Cross‐ Country Investigation of Internet Adoption by Companies in the United Sates and China," Electronic Markets 14, 1 (2004), 13‐24. https://doi.org/10.1080/1019678042000175261
  42. Yap, C. S., C. P. P. Soh, and K. S. Raman, "Information Systems Success factors in Small Business," International Journal of Management Science 5, 6 (1992), 197‐ 609.
  43. Zmud, R. W., "Diffusion of Modern Software Practices: Influence of Centralization and Formalization," Management Science 28, 2 (1982), 1421‐1431. https://doi.org/10.1287/mnsc.28.12.1421
  44. Zmud, R. W., "Individual Differences and MIS Success: A Review of the Empirical Literature," Management Science 25, 10 (1979), 966‐979. https://doi.org/10.1287/mnsc.25.10.966
  45. ZDNet Korea, "Is Mainframe Wandering?," 2006, available at http://www.zd net.co.kr/news/enterprise/server/0,39031193,39151308,00.htm.
  46. Corbitt, B. J., T. Thanasankit, and H. Yi, "Trust and e‐Commerce: a Study of Consumer Perceptions," Electronic Commerce Research and Applications 2 (2003), 203‐215. https://doi.org/10.1016/S1567-4223(03)00024-3
  47. DeLone, W. H., "Firm Size and the Characteristics of Computer Use," MIS Quarterly 5, 4 (1981), 65‐77. https://doi.org/10.2307/249328