Discriminating IT Governance

The information technology (IT) governance literature predominantly explains firms’ IT governance choices, but not their strategic consequences. We develop the idea that a firm’s IT governance choices induce adeptness at strategically exploiting IT only when they are discriminatingly aligned with its departments’ knowledge outside their specialty. Discriminating means that governing the two undertheorized classes of IT assets—apps and infrastructure—requires “peripheral” knowledge in different departments. Analyses of data from 105 firms support our middle-range theory.