Abstract:
Purpose – Though prior studies have attempted to explore the various effects of managing information
technology (IT) investment on firmperformance, themechanismthrough which management of IT impact
on firm performance rests less clear. The purpose of this study is to examine the impact of managing IT
and business-IT alignment on firm performance.
Design/methodology/approach – Drawing on the resource-based theory and process theory, this
study examines how managing IT impacts business-IT alignment and firm performance. The primary
survey of 182 responses from IT and businessmanagers fromSri Lanka was empirically examined.
Findings – The findings reveal that managing IT has a positive and strong impact on business-IT
alignment and firm performance. Further, business-IT alignment partially mediates between managing IT
investment and firmperformance relationships.
Research limitations/implications – Today, businesses have invested a massive amount of money in
IT investment, and the return on this investment is always a serious concern for managers and industry
practitioners. This study finding proposes meaningful insights on managing IT, business-IT alignment
and firm performance.
Originality/value – This study opens up the black box on the above nomological linkage and contributes
to the literature by extending the theoretical lenses while suggesting insightful and practical implications.
