The Inclusion of CIOs in Top Management Teams: A Longitudinal Study of the Strategic Role of IT

The Inclusion of CIOs in Top Management Teams: A Longitudinal Study of the Strategic Role of IT

Wenhong Luo (Villanova School of Business, Villanova University, Villanova, PA, USA)
Copyright: © 2016 |Pages: 16
DOI: 10.4018/IRMJ.2016070103


The inclusion of the CIO in the top management team (TMT) is one indicator of how top executives view the role of IT within their firms. This study draws upon the upper echelons theory to examine the organizational factors contributing to the CIO inclusion. A panel data set is used to empirically test the hypotheses. The results show that TMT age and firm diversification are found to be linked to the CIO inclusion. The study contributes to an understanding of the relationship between the CIO and TMT and provides a potential measure of IT importance within firms.
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As Information Technology (IT) has increasingly become one of the most critical and expensive resources employed by firms, the position of Chief Information Officer (CIO) has received a lot of attention from both academics and practitioners over the past two decades (Banker, Hu, Pavlou, & Luftman, 2011; Enns, McFarlin, & Huff, 2007; Karahanna & Preston, 2013; Li, Tan, Teo, & Tan, 2006; Peppard, 2010; Preston, Chen, & Leidner, 2008; Smaltz, Sambamurthy, & Agarwal, 2006). Since a CIO is the top ranked executive in charge of IT and has the overall responsibility for corporate IT strategies and operations, one cannot underestimate the impact of CIOs on how effectively a firm deploys IT resources and realizes IT values. At the same time, the role of CIO is evolving in response to the changes associated with technology advancements and IT management practice (Chun & Mooney, 2009; Peppard, 2010).

While early research on CIOs has focused on identifying the characteristics of a successful CIO with the underlying assumption that the role of a CIO in a firm is shaped by the individual occupying the CIO position, recent studies suggest that having outstanding qualifications is a necessary but not sufficient condition for CIOs to drive the strategic vision and use of IT within firms (Peppard, 2010, Gerth & Peppard, 2015). CIO effectiveness is also constrained by such factors as CIO reporting structure (Banker et al., 2011), strategic decision rights (Preston et al., 2008), and relationships with the CEO and other members of the Top Management Team (TMT) (Johnson & Lederer, 2005; Johnson & Lederer, 2010; Preston, Karahanna, & Rowe, 2006), which has been empirically defined as the board of directors, top tiers executives, the executives with a title of senior vice president or above, the executives listed in the SEC filings, the highest paid executives, and so on.

IT strategies and directions are not decided by the CIO alone. In fact, most CIOs are hired based on the job requirements and expectations set by the CEO and the TMT. Arguably, the views and attitudes of the CEO and other TMT members could have as significant impact on the firm’s IT strategy as the CIO. Although researchers have recognized the importance of the TMT and frequently advised CIOs to seek support from and establish mutual understanding with TMT members, few studies have assessed how CEOs and other executives in the C-suite determine what the role of IT should be for the firm, partly because it is difficult to directly measure the attitude and perceptions of top executives and board of directors about IT (Huff, Maher, & Munro, 2006).

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