Sustainability of a Firm's Reputation for IT Capability: The Role of Senior IT Executives

Journal of Management Information Systems, Forthcoming

46 Pages Posted: 11 Feb 2013 Last revised: 20 Jul 2014

See all articles by Jee-Hae Lim

Jee-Hae Lim

University of Hawaii, Manoa

Theophanis C. Stratopoulos

University of Waterloo - School of Accounting and Finance

Tony S. Wirjanto

University of Waterloo - School of Accounting and Finance; University of Waterloo, Department of Statistics & Actuarial Science

Date Written: February 11, 2013

Abstract

This study investigates the development and sustainability of a firm’s IT capability reputation from an IT executive’s standpoint. Building on institutional theory, we argue that IT executives will try to achieve external legitimacy - i.e., project an image of superior IT capability to external stakeholders - in the hope that top management team and board members will reciprocate by elevating the internal legitimacy of IT executives. Firms that develop such a culture of reciprocity with their IT executives are more likely to sustain their IT capability reputation. Econometric results based on panel data for 1,326 large US firms from a wide spectrum of industries over a 13-year period (1997-2009) validate these predictions. More specifically, we find that IT executives with greater structural power (e.g., IT executives with higher job titles) or IT-related expert power (e.g., IT-related education or experience) are more likely to attract public recognition for their firm’s IT capability. Firms that build such an IT capability reputation are more likely to promote their IT executives, and IT executives who are promoted are more likely to stay longer with their firms. This continuity in IT strategic leadership is positively associated with the firm’s ability to sustain its IT capability reputation. Our findings have important practical implications related to a firm’s IT reputation strategy as well as the motivation and career of IT executives. Firms wanting to develop and sustain their IT capability reputation would do well to foster the creation of a cycle of positive reciprocity with their IT executives. IT executives hoping to increase their power within their firm’s top management team and improve the legitimacy of the firm’s IT organization need to project an image of IT superiority to external stakeholders.

Keywords: IT capability reputation, IT executives, IT strategic leadership, structural power, institutional theory, external legitimacy, internal legitimacy, reciprocity

Suggested Citation

Lim, Jee-Hae and Stratopoulos, Theophanis C. and Wirjanto, Tony S., Sustainability of a Firm's Reputation for IT Capability: The Role of Senior IT Executives (February 11, 2013). Journal of Management Information Systems, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2215001

Jee-Hae Lim

University of Hawaii, Manoa ( email )

2404 Maile Way
Honolulu, HI Honolulu 96822
United States
(808) 956-8503 (Phone)
(808) 956-9888 (Fax)

HOME PAGE: http://shidler.hawaii.edu/directory/jee-hae-lim/soa

Theophanis C. Stratopoulos (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada
519-888-4567 x35943 (Phone)

Tony S. Wirjanto

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x35210 (Phone)

HOME PAGE: http://https://uwaterloo.ca/statistics-and-actuarial-science/people-profiles/tony-wirjanto

University of Waterloo, Department of Statistics & Actuarial Science ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x35210 (Phone)
519-746-1875 (Fax)

HOME PAGE: http://math.uwaterloo.ca/statistics-and-actuarial-science/people-profiles/tony-wirjanto

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