Corporate knows best (maybe): The impact of global versus local IT capabilities on business unit agility

Abstract

The relationship between the corporate unit and its strategic business units (SBUs) has been variously described in the IS literature as either antagonistic or affable. At a time when corporate units are considering how to share platform-based capabilities (dubbed global IT) with SBUs, some SBUs may feel a loss of control while others see it as a chance to focus local IT on solving problems that are best handled by SBUs. Using data from an international survey of CIOs in the U.S., Germany, and Australia, we find that platform or global IT capabilities are associated with higher SBU agility notably when SBUs operate in a relatively stable environment. We also find that local IT influences SBU agility, particularly if SBUs have high levels of IT autonomy. Thus, the search for SBU agility may prompt corporate units to balance use of local and global IT resources and capabilities.