Governance Inhibitors in IT Strategy and Management: An Empirical Study of Korean Enterprises

Abstract

In recent years, increasing numbers of businesses worldwide have standardized their governance practices in an attempt to improve control over their corporate assets. The term “IT Governance (ITG)” indicates businesses’ growing need to find a balance between the conformance (or conformity to regulatory standards) and performance goals mandated by their boards. Many leading organizations have turned to ITG to pursue gains in efficiency, accountability, and compliance; they have not, however, succeeded in implementing coherent information technology (IT) schemes on account of a number of challenging issues. Korean companies in particular face an urgent need to formulate workable modes of ITG, as the disproportion between Korea's extremely high IT capability and poor ITG practices is especially marked. Despite academics and practitioners’ growing interest in ITG, few studies to date have characterized the practical inhibitors frustrating the implementation of effective ITG. This paper, therefore, aims to examine empirically how inhibiting features associated with ITG affect the maturity level of IT activities. A survey of 96 leading enterprises in Korea, who generally saw ITG as an innovative enabler but lacked a good ITG structure themselves, showed a strong relationship at a causal level between an enterprise's “lack of IT principles and policies” and its ITG success.