Managing strategic investments decisions : the impacts of their IT content, the effectiveness of decisions and a protocol for evaluation

• Main Author: Chou, Tzu-Chuan
• Published: University of Warwick 1998
• Subjects: 658; HJ Public Finance
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.327554

The strategic potential of information technology (IT) is now well recognised, but strategic IT projects have high failure rates. The present study proposes the concept of the degree of IT intensity of SIDs and aims to answer the question of whether the degree of IT intensity matters in relation to the decision process, decision content, decision outcome and evaluation methods. Furthermore, critical factors which impact on the effectiveness of SIDs are explored, and a protocol is proposed by mapping the quantitative findings to state-of-art evaluation approaches. A structured questionnaire was developed, and empirical work was undertaken among Taiwanese manufacturers. Experts in two professional associations, the Chinese Association for Industrial Technology Advancement and the Chinese Productivity Centre, helped to identify organisations considered to be representative of the population. 270 organisations were selected and 94 responded. Of these, 80 were valid for further analysis. Several variables are found to be significantly correlated to IT intensity. The Hypotheses testing shows that interaction, the accuracy of information and strategic considerations are mediators in the linkage of IT involvement and the effectiveness of SIDs but the direct link from IT intensity to the effectiveness of SIDs proved to be weak. Consequently, the stepwise variable selecting procedure was employed to reveal the critical variables which impact significantly on the effectiveness of SIDs. The present study seeks to develop a protocol which addresses the practical aspect of SIDs and SITIDs in terms of rules and to integrate these rules to form a model for evaluation. Five major mechanisms of this model are discussed: the scanning mechanism, the strategic flexibility mechanism, the evaluation mechanism, the proactive mechanism, and the feedback mechanism.