Information technology strategy and organization structure relationship in companies listed on the Nairobi Stock Exchange'
Kariuki, Felix M
MetadataShow full item record
Proceeding from the school of thought that strategy is implemented through organization structure, the study sought to establish the management's perception of the value ofICT to the business in companies listed on the Nairobi Stock Exchange (NSE) and thereby determine the relationship between the perceived strategic value of ICT and the placement of the ICT functions in their organization structures. The research was carried out on 45 companies listed on the NSE with data being collected using structured questionnaires. Self-addressed mailing and drop (personally and through email) and pick methods of questionnaire administration were employed. A total of 35 responses were received representing 78% response rate. Of these, 80% were duly completed while 20% were returned uncompleted (as they had been sent) thereby offering an overall valid response rate of 62%. Analysis of the data collected revealed the existence of a formal ICT function in 89.3% of the companies surveyed. In 72% of the companies, the head of the ICT function are positioned at a senior management level in the organization structure but their independent ; '.I decision making is limited. In only in 16% of the companies does the head of ICT make independent decisidns. lCT function is perceived highly with 86% of the respondents rating it at a value between 2.5 and 5(highest). l~ 96% of the companies, IT's performance is critical (at a level of 4.75 out of 5) to the success of business strategy. In the majority (96%) of the companies, K'T strategy is highly influenced by the business strategy with the two strategies being aligned and mainly developed in-house (72%); 75% of the companies studied perceived IT Xl to be strategic. In 71 % of the companies, the development and implementation of the ICT strategy is charged to the head of the ICT function with minimal involvement of the Executive Management (15%) and the Board of Directors (18%). Even though in 96% of the companies, the' need for ICT in the business is high and that there is a high level (an average score of 3.4 out of 5) of adoption of ICT in the business processes and products, determination of the strategic value of ICT to the business is hampered by the absence of ICT value measures; only 48% of the companies have these metrics in place. Determination of the strategic value based on the strategic and process value of ICT showed that the 76% of the companies had high strategic value (between 3.5 and 5) of ICT. On the basis of the perceived value parameters, the perceived strategic value of ICT was determined with a paltry 10% of the companies having high value of between 3.5 and 5. On inclusion of the perceived value ofICT in the determination of the strategic value, only 33% of the companies had a high strategic ICT value. The study therefore reveals a difference between the management's perception ofICT to the business and the determined perceived value of ICT to the business; 86% and 33% of the companies respectively. The basis of the organization structure positioning in 85% of the companies is the strategic value of the function. 33% of the companies perceive and value ICT highly and 76% of them position ICT high in their organization structures. The study concludes that there is no relationship between the perceived strategic value of ICT function to the business and the positioning of the 1CT function in the organization structure.