The Evolution of IT Governance Structure in Dynamic Environments

Abstract

Information technology (IT) governance structures focuses on the distribution of the IT decision-making process throughout the enterprise to achieve the strategic IT goals of the organization. The development of an effective IT governance structure that is flexible and will meet the needs of a complex and dynamic environment is a challenging task. This is particularly the case in organizations that have achieved growth through mergers and acquisitions. When the acquired organizations are geographically located in different regions than the host enterprise, the factors affecting this integration and the choice of IT governance structures are quite different than when this situation does not exist. This study performs an exploratory examination of the factors that affect the choice of IT governance structures in organizations that grow through mergers and acquisitions in developing countries with transitional economies using the results of a case study of an international telecommunications company. In addition to the commonly recognized factors such as government regulation, competition and market stability, organizational culture, and IT competence, top management’s predisposition toward a specific business strategy and governance structure can profoundly influence the initial choice of IT governance in organizations. The case also finds that IT governance structures are not static, but are continuously evolving in dynamic environments. Managerial implications are discussed.