Exploring IT Governance Effectiveness: Identifying Sources of Divergence through the Adoption of a Behavioural-Based Organizational Routines Perspective By Allen E. Brown B.A. University of Western Ontario M.B.A McMaster University A thesis submitted to the Faculty of Graduate and Postdoctoral Affairs in partial fulfillment of the requirements for the degree of Doctor of Philosophy In Management Carleton University Ottawa, Ontario © 2014/2015 Allen E. Brown ABSTRACT This research seeks to broaden and strengthen the holistic understanding of IT governance effectiveness by specifically examining why IT governance systems often fail to produce appropriate or desired IT and organizational behaviours. To address this objective, we investigate and develop a theoretical framework for understanding and explaining the varied sources of divergence that occur during the enactment of IT governance mechanisms. Defined as the difference between desired behaviours and actual behaviours, we argue that the acceptance and consideration of all sources of divergence within the enactment of IT governance mechanisms, is not only necessary, but critical to the appropriate design and maintenance of an effective IT governance system. Traditional IT governance perspectives, heavily rooted in the structural and normative aspects of oversight and control (i.e. structures), have limited our ability to adequately and fully understand how IT governance performs in practice. Framing IT governance mechanisms as routines, we draw on institutional theory and organizational routines theory as an alternative lens for understanding why organizational behaviours are not always aligned to those expected by IT governance owners. Based on Pentland and Feldman`s (2008) generative model of organizational routines, we establish a novel conceptualization for IT governance divergence that posits and delineates three primary sources of IT governance divergence: Representational Divergence, Translational Divergence and Performative Divergence. Through the in-depth examination of the IT investment planning, prioritization and selection routines within two exploratory case studies, we inductively propose a model for explaining IT governance divergence. We apply a narrative networks approach to frame and analyse qualitative data captured through semi-structured interviews, archival and document review and direct observation. Pattern- matching and emergent themes analysis is performed to identify and define first-order and second- order constructs, along with 15 relational propositions. Given the dearth of theoretically-grounded research in this domain, the central contribution of this study rests in the establishment of a robust theoretical framework of IT governance divergence upon which further cumulative empirical study can be undertaken. For the practitioner community, the recognition of divergence is necessary for designing IT governance systems that reduce and control negative actor divergence while simultaneously embracing and reacting to instances of positive divergence. In most organizations, significant investment is being made into the implementation of formal IT governance structures and processes despite little empirical evidence as to their effectiveness. By adopting and highlighting a behavioural-based perspective of IT governance effectiveness, we hope to encourage practitioners to move away from the strict normative view of IT governance towards an alternative conceptualization that accepts and accounts for the complex social and individual environments in which IT governance systems are enacted. From this perspective, we argue that IT governance effectiveness can be improved and IT investment failures can be reduced. Keywords: IT Governance, IT Governance effectiveness, Organizational Routines Theory, Divergence PhD Thesis – Allen E Brown Page | ii ACKNOWLEDGEMENTS “It does not matter how slowly you go as long as you do not stop” -Confucius This journey, as long as it was, would not have been possible without the unwavering support of a number of selfless and dedicated individuals. First and foremost, I would like to thank my wife, Elvan, for putting her life on hold while I pursued my academic dreams, and for holding down the fort during all those countless evenings and weekends I spent hidden away writing and researching. I would also like to thank my three children, Taydan, Devran and Derya for accepting and understanding that Daddy couldn’t always be around to play, even though he desperately wanted to be. Thank you also to my parents and sister for their constant words of encouragement, proofreading, late night counselling and babysitting support. I am deeply in debt to my amazing supervisor, Dr. Gerald Grant, for his endless professionalism, patience and understanding. He knew exactly when to push and when to sit back and let me vent, something I probably did way too often. Thank you to the members of my committee, Dr. Shaobi Ji, Dr. David Cray, Dr. Benoit Aubert and Dr. Muriel Mignerat for their thoughtful (and very time consuming) review and feedback. Thank you to the graduate committee registrar, Joanne Bree, for her understanding and support. Finally, thank you the organizational sponsors who opened their doors to my research effort and went above and beyond to provide access to their organizations to make this research possible. PhD Thesis – Allen E Brown Page | iii TABLE OF CONTENTS Abstract ................................................................................................................................ ii Acknowledgements ............................................................................................................. iii List of Tables ....................................................................................................................... ix List of Figures ....................................................................................................................... x List of Appendices ............................................................................................................... xi Chapter 1 – Introduction .................................................................................................... 1 The Rise of IT Governance ............................................................................................... 1 The (In) Effectiveness of IT Governance ......................................................................... 7 Research Motivation and Research Contribution ......................................................... 13 Research Purpose and Contribution .......................................................................... 17 Chapter 2 – Theoretical Background ................................................................................ 22 Defining IT Governance Success and Failure................................................................. 22 Divergence as an Indicator of IT Governance Effectiveness ..................................... 25 IT Governance as a set of Mechanisms ..................................................................... 28 IT Governance and Sources of Divergence ................................................................ 29 The Epistemological Blinders of IT Governance Research ............................................ 33 Necessity of a Different Approach............................................................................. 36 The Diverse Theoretical Perspectives of Divergence .................................................... 38 Formal and Informal Institutions ............................................................................... 40 Divergence within Institutional Theory ..................................................................... 43 The Various Levels of Analysis in Institutional Theory .............................................. 47 Organizational Routines as a Theoretical Perspective .................................................. 54 Routines as Rules ....................................................................................................... 56 PhD Thesis – Allen E Brown Page | iv Routines as Behaviour Patterns ................................................................................ 57 Routines as Collective Dispositions ........................................................................... 59 Organization Routines Conceptualization – Dyadic and Triadic perspectives .............. 63 Including Rules and Artefacts .................................................................................... 68 Organizational Routines as a Level of Analysis ............................................................. 74 Chapter 3 - Conceptual Framework .................................................................................. 79 IT Governance Mechanisms and Organizational Routines ........................................... 79 Organizational Routines and Information Technology Research .............................. 80 Introducing IT governance routines .......................................................................... 82 Organizational Routines and Divergence – Towards a Conceptual Framework ........... 84 A Conceptual Framework for Explaining Divergence within IT Governance Routines . 90 Representational Divergence .................................................................................... 94 Translational Divergence ........................................................................................... 99 Performative