ABSTRACT:
Organizations increasingly depend on information technology (IT) applications (apps) for competitive positioning. Governance of IT apps presents a unique set of challenges, particularly as organizations turn to shared IT apps across business units (IT apps relatedness). Shared IT apps can foment IT misalignment within business units, while also creating opportunities for learning-related synergies. This study develops the idea that an organization’s efforts to increase IT apps relatedness influence business unit agility and that this relationship is U-shaped. Analysis of data from 120 organizations provides support for a convex, U‐shaped, relationship. Furthermore, the U-shaped curve flattens under conditions of increased market uncertainty. This relationship highlights the need for IT governance to balance tension between business unit interests that seek autonomy over certain IT app choices and corporate interests that push for synergies based on shared IT apps. Failure to create this balance could impede business unit agility and hurt the broader organization.
Key words and phrases: IT applications, IT governance, synergy, organizational alignment, business unit, organization agility, market uncertainty