A Trend Toward More Centralized Information Technology (IT) Management

Prevailing research on IT governance suggests that a large and increasing majority of multi-divisional organizations utilize a federal model of organization. Contingencies that influence a choice of centralized, decentralized or federal model include the organizational structure, business unit scope and the absorptive capacity of the business unit (Sambamurthy & Zmud 1999). Given the attention to flexibility and responsiveness in a sense and respond world, one would expect that flatter organizations, more diverse business unit scope and improved absorptive capacity lead to the predominance of federal and decentralized models of IT governance. Surprisingly, the results of our survey study of large, multibusiness unit companies shows a strong majority of CIO respondents describing their structure as centralized and desiring it to become even more so. Given our recent interactions with IT organizations and our empirical findings, we develop a generalized explanation that integration is a dominating force driving a more centralized approach to IT governance.