Arrangements for Information Technology Governance: A Theory of Multiple Contingencies1

Abstract

IT governance arrangements refers to the patterns of authority for key IT activities in business firms, including IT infrastructure, IT use, and project management. During the last 20 years, three primary modes of IT governance have become prevalent: centralized, decentralized, and the federal mode. These modes vary in the extent to which corporate IS, divisional IS, and line management are vested with authority for the key IT activities. While a significant volume of research has examined the influence of contingency factors on the choice of a specific mode of IT governance, most of this research has examined the singular effects of the contingency factors. The assumption underlying these studies is as though the organizational contingencies act in isolation in influencing the mode of IT governance. However, in reality, business firms are subject to the pulls and pressures of multiple, rather than singular, contingency forces. Therefore, to acknowledge this reality, this study applies the theory of multiple contingencies to examine how contingency forces influence the mode of IT governance. The theory argues that contingency forces interact with each other by either amplifying, dampening, or overriding their mutual influences on the IT governance mode. Three scenarios of multiple, interacting contingencies are identified: reinforcing, conflicting, and dominating. Each of these scenarios of multiple contingencies is hypothesized to influence a particular mode of IT governance. Utilizing rich data from case studies of eight firms, empirical evidence is presented to support these hypotheses. Implications of the multiple contingencies theory for research and for practice are presented.