The Impact of Shadow IT Systems on Perceived Information Credibility and Managerial Decision Making

49 Pages Posted: 7 Oct 2013 Last revised: 31 Dec 2016

See all articles by Noah Myers

Noah Myers

Brigham Young University

Matthew Starliper

Texas A&M University-Corpus Christi-College of Business

Scott L. Summers

Brigham Young University - School of Accountancy

David A. Wood

Brigham Young University - School of Accountancy

Date Written: December 30, 2016

Abstract

Business trends show that more and more employees are creating shadow IT systems — IT systems that are not sanctioned or monitored by the IT department. This paper examines how the use of shadow IT in product costing impacts managers’ perceptions of information credibility and managerial decision-making. Using two experiments, we find that participants view information from shadow IT systems as less credible and they are less impacted by and less willing to rely on costing reports produced from shadow IT systems versus non-shadow IT systems. We also find that although participants are concerned about the credibility of shadow IT systems, they are not more likely to find simple mathematical errors embedded in shadow IT costing reports relative to non-shadow IT reports. This suggests that although concerned about shadow IT systems, managers still do not exercise sufficient care in evaluating reports created using these systems. The results of our study should prove informative as shadow systems become more prevalent in organizations.

Keywords: Shadow IT, ERP, Excel, Manager Decisions, Quantification

JEL Classification: M4, M41, M49, C91, M1, O3, O33

Suggested Citation

Myers, Noah and Starliper, Matthew and Summers, Scott L. and Wood, David A., The Impact of Shadow IT Systems on Perceived Information Credibility and Managerial Decision Making (December 30, 2016). Available at SSRN: https://ssrn.com/abstract=2334463 or http://dx.doi.org/10.2139/ssrn.2334463

Noah Myers

Brigham Young University ( email )

Provo, UT 84602
United States

Matthew Starliper

Texas A&M University-Corpus Christi-College of Business ( email )

6300 Ocean Drive
Corpus Christi, TX 78412
United States

Scott L. Summers

Brigham Young University - School of Accountancy ( email )

516 TNRB
Provo, UT 84602
United States
801-422-9790 (Phone)
801-422-0621 (Fax)

David A. Wood (Contact Author)

Brigham Young University - School of Accountancy ( email )

518 TNRB
Brigham Young University
Provo, UT 84602
United States
801-422-8642 (Phone)
801-422-0621 (Fax)

HOME PAGE: http://marriottschool.byu.edu/employee/employee.cfm?emp=daw44

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