IT Business Value: Pygmalion Effect, In-Group Favouritism, and Illusory Correlation

Abstract

The transformative power of Information Technology (IT) presents many exciting opportunities for organizations to use IT to achieve business success. While some CEOs of leading organizations are taking advantage of IT’s transformative potential, others are not due to their lingering doubt concerning the potential of IT and the ability of IT executives to contribute to business value and competitive advantage. These expectancies of IT and IT executives, held by CEOs, are believed to be instrumental in decisions regarding the eventual deployment of IT. To examine this important organizational phenomenon, this dissertation studies the existence and nature of CEOs’ expectancies of IT and their IT executives in increasing business value and strategic advantage, and investigates the antecedents and consequences of these value expectancies using data of large- and medium- sized Canadian organizations. Based on prominent social and cognitive theories, the research frameworks can provide a powerful lens for examining this organizational phenomenon. Through this lens, the dissertation contributes to the theoretical underpinnings and empirical findings about CEOs’ value expectancies of IT and IT executives, their performance implications, their social and cognitive antecedents, and ultimately suggesting how managers can leverage IT resources and capabilities to enhance their organizational performance.