We examined the relationship between information technology (IT) and organizational performance in the U.S. life/health insurance industry by applying and testing Galbraith's information processing theory and strategic contingency theory. Rather than focusing on resource allocations in IT, we instead examined the manner in which IT is deployed in organizations through information processing design choices. Our results suggest that while some information processing design choices are generally related to organizational performance, others should be matched to a specific strategic posture. For example, we found that all organizations benefit from using IT to increase cost-effectiveness. However, other uses of IT should be more closely aligned with an organization's strategy. In particular, domain offensive organizations should align their IT systems to focus on the front end of their operations and understanding customer needs, which will spur further innovation.
|Number of pages||27|
|Journal||Journal of Management Information Systems|
|State||Published - 2006|
Bibliographical noteFunding Information:
Acknowledgments: The authors thank IBM, Inc., and LIMRA International for their financial support of this research. They also thank David Cummins, Amrit Tiwana, Vladimir Zwass, and two anonymous referees for their helpful suggestions. In addition, they thank Gerald I. Susman, James B. Thomas, Charles C. Snow, John M. Stevens, David V. Day, David P. Lepak, Shawn M. Clark, Mark B. Philhower, and Sunny Badiga for their assistance at an early stage of this research.
- Information processing
- Information technology
- Risk management performance
- Strategic contingency
ASJC Scopus subject areas
- Management Information Systems
- Computer Science Applications
- Management Science and Operations Research
- Information Systems and Management