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Journal Article

Impact of IS/IT Investments on Firm Performance: Does Stakeholder Orientation Matter?  pp99-111

António Guerreiro

© May 2016 Volume 19 Issue 2, ECIME 2015, Editor: Elias Pimenidis, pp83 - 134

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Abstract: This research project addresses a central question in the IS business value field: Does IS/IT investments impact positively on firm financial performance? IS/IT investments are seen as having an enormous potential impact on the competitive posit ion of the firm, on its performance, and demand an active and motivated participation of several stakeholder groups. Actual research conducted in the Information Systems field, relating IS/IT investments with firm performance use transactions costs econom ics and resource‑based view of the firm to try to explain and understand that relationship. However, it lacks to stress the importance of stakeholder management, as a moderator variable in that relationship. Stakeholder theory sees the firm as the hub cen tric to the spokes representing various stakeholders who were in essence equidistant to the firm, and survival and continuing profitability of the corporation depend upon its ability to fulfil its economic and social purpose, which is to create and distri bute wealth or value sufficient to ensure that each primary stakeholder group continues as part of the corporation⠒s stakeholder system. Stakeholder theory in its instrumental version, argues that if a firm pays attention to the stakes of all stakeholde r groups (and not just shareholders), it will obtain higher levels of financial performance. With this premise in mind, the aim of this paper is to discuss and test the use of stakeholder theory in the IS business value stream of research, in order to a chieve a better understanding of the impact of IS/IT investments on firm performance (moderated by stakeholder management). To achieve the expected impact from an IS/IT investment, it is argued that firms need a strong commitment from those stakeholder groups, which lead us to the need of a corporate ⠜stakeholder orientation⠀. When firm financial performance is measured by returns on assets (ROA), returns on investments (ROI) and returns on sales (ROS), the results show that ⠜stakeholder ori entation⠀ impact positively in the relation between


Keywords: Keywords: IS/IT investments, impacts, financial performance, stakeholder orientation, return on investments, IS business value


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