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An empirical examination of information systems expenditure: a stage hypothesis using the information processing and organizational life cycle approaches

Department of Management, School of Business, University of Louisville, Louisville, KY 40292, USA

David C.W. Chin

The Management Information Systems Division, Faculty of Commerce and Business Administration, 2053 Main Mall, Vancurer. British Columbia V6T IY8, Canada

In this paper. we propose a model for information systems expenditure. based on the concepts of information processing and organisational life cycle. From a sample of 105 companies, our study shows that as an organisation becomes more mature, information systems expenditures increase This may be due to the need to process more information to cope with the increasing environmental and task complexity facing mature organisations. Our results suggest that when an organisation is undergoing periods of uncertainty such as de mand fluctuations, increasing hostility from competitors and industry-wide declines they should increase spending instead of implementing measures of budget control in information systems.

Journal of Information Science, Vol. 17, No. 2, 105-117 (1991)
DOI: 10.1177/016555159101700204


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