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This article has been withdrawn as it was published elsewhere and accidentally duplicated. The original article can be seen here: 10.1108/09576059610123097. When citing the article, please cite: Zeinab A. Karake, (1996), “An empirical investigation of the relationship between institutional ownership and information technology”, Logistics Information Management, Vol. 9 Iss 4 pp. 5 - 10.

Utilizes an objective measure of the levels of investment/ performance in information technology (IT) and tests a number of hypothesized relationships between IT performance and company′s control, governance and managerial characteristics; this measure is called the relative information technology index (RITI). Is founded, theoretically, on both agency and upper echelon theories; empirically, suggests meaningful relationships between IT investment/performance and management ownership, the ratio of outside to inside directors, and the age of the CEO.

Using a sample of 198 Fortune 500 companies, explores the differential effects of a number of characteristics, grounded in a broad agency theory framework, on the decision to create a chief information office (CIO) position, where the CIO acts as an informational control agent. Companies were more likely to create a top CIO position if: (1) top management′s equity were large; (2) the company had a large number of outside directors on the board; (3) the company′s technological level was advanced. Examines the role of the CIO as managing information technology as it pertains to enhancing the control function of management.

Using a sample of large industrial firms from two industries with differing external turbulence ‐ commercial banking and pharmaceutical ‐ hypothesizes that the need for a senior manager of information technology is essential in high‐turbulence industries (commercial banking). This hypothesis was tested by evaluating the performance (as measured by return on investment (ROI) of 50 commercial banking firms and 39 pharmaceutical firms, and the presence of a top level information manager. In the commercial banking industry, statistical analysis did not support the hypothesis of significant differences in performance between those companies with a top‐level information manager and those without. States that, in the pharmaceutical industry, the statistical test supported the hypothesis of significant differences in performance between companies with top‐level information managers and those without.

Investigates the relationship between the level of institutional ownership in a corporation and the magnitude of a company’s investment in information technology resources as measured by the relative information index (RITI) developed by the author in a previous paper. By studying 64 publicly held corporations in the USA, the statistical analysis revealed a strong relationship between the level of institutional ownership and the company’s RITI.

Examines ‐ in a study involving 92 large publicly‐held organizations ‐ the relationships between information technology (IT) structure, control and industry turbulence. Notes that despite the fact that some have called centralized systems electronic dinosaurs, many companies are turning to this traditional approach because it does offer one thing that decentralized systems generally lack, namely, control. Cites results indicating that information technology structure (centralized versus decentralized) is strongly related to management equity ownership, concentration of stock holdings, and the level of turbulence which firms face. Notes, for example, that an organization where top executives and managers own a relatively high percentage of the company’s stock possesses a more centralized IT structure than an organization with a relatively lower percentage of management ownership. Points out that this means that user departments in the latter have more control over their IT functions than do users in the former, but that, on the other hand, companies with high levels of stock concentration have more decentralized IT structures. In addition, concludes that the research revealed a statistically positive significant relationship between the level of turbulence firms face and the degree of IT centralization.