Journal of Management Information Systems

Volume 30 Number 1 2013 pp. 15-56

The Effect of Social Capital of the Relationship Between the CIO and Top Management Team on Firm Performance

Karahanna, Elena and Preston, David S

ABSTRACT: The paper empirically examines the effects of social capital of the relationship between the chief information officer (CIO) and top management team (TMT) on organizational value creation based on responses from CIOs and matched TMT respondents from 81 hospitals in the United States. Specifically, we theorize how the three dimensions of social capital-structural, cognitive, and relational social capital-facilitate knowledge exchange and combination between the CIO and TMT resulting in the alignment between the organization's information systems (IS) strategy and business strategy. Results show that IS alignment significantly influences the firm's financial performance and mediates the relationship between CIO-TMT social capital and performance. The findings also indicate that cognitive and relational social capital influence information systems strategic alignment but that structural social capital exerts its influence through its effects on cognitive social capital. Recommendations are provided as to how organizations can develop CIO-TMT structural, cognitive, and relational social capital to positively influence firm performance via IS strategic alignment.

Key words and phrases: chief information officer, cognitive social capital, financial performance, information systems, IS leadership, relational social capital, social capital, strategic alignment, structural social capital, top management team