Running Head: DECENTRALIZATION 1

Decentralization

Student Name

Professor Name

Course Name

March 28, 2021

DECENTRALIZATION 2

Decentralization

Definition

"Decentralization" refers to the transfer of authority from a central government to a sub-

national entity. Nevertheless, beyond this general definition, the process of decentralization is a

complex undertaking, taking on different meanings in different contexts and according to the

desires and plans of those in charge of its design and implementation.[ CITATION Lin21 \l 1033

Summary

This study's main aim was to evaluate how the relationship between the involvement of

companies in REMs and how much investment in IT infrastructure is expected through IT

decentralization and other corporate governance frameworks. This study analyzed the role of

REM or the prone existence of managers in shaping IT investments to change normal business

operations in the short term. The authors have shown that REM companies seem to fall short of

their IT investment plans. It is important to note that autonomous IT administration will

minimize REM's possible negatives. Besides, IT decentralization's positive implications will

compliment corporate governance structures such as institutional ownership and challenges to

acquisition. Overall, these results offer new perspectives into how IT decentralization can

encourage corporate contribution to IT investments and how various corporate and IT

governance processes can help optimize digital business capital investments. Ling Xue (Ph.D. in

Information Systems), Sunil Mithas (Ph.D. from the University of Michigan), and Gautam Ray

(Ph.D. from Ohio State University). The study offers valuable implications for more IT
DECENTRALIZATION 3

governance analysis by highlighting diverse interplays between corporate governance, IT

decentralization, and IT spending decisions as fertile research areas[ CITATION Lin21 \l 1033 ].

Discussion

I have selected this article as its main objective in this analysis is to understand the

relation between REM and its IT investment plans. The key point is that businesses choose IT

investment to help the production of value for money. Secondly, the structural view examines the

impact on IT investments in market standards and strategic measures.[ CITATION Lin21 \l 1033

I agree with the authors' key positions in this article as the adoption of "internal"

instruments, dependent on delayed stages of the instruments, is a core feature of the Arellano

Bond GMM strategy (i.e., predetermined and endogenous variables). The estimators Arellano–

Bond GMM often allow external instruments to be used. In our case, we follow many external

tools besides internal tools. Authors have first followed as an external instrument, in particular, a

metric of irregular accrual. This measurement records the AEM amount.[ CITATION Lin21 \l

1033 ]

The article was moderate to understand as the findings demonstrate that Hansen's J's tests

do not deny the total exogenous and thus acceptable instrument sets for use that is not easy to

understand and conclude the results. Furthermore, the homogeneity of subsets of instruments is

checked by Variance in Hansen tests. (i.e., levels, differenced, and standard IV instruments).

These experiments indicate that we cannot refuse the exogenous and therefore proper

instruments of any of these subsets. Dependence of the weight matrix on approximate parameters

in the two-step method fixes their possible downward partialities.[ CITATION Lin21 \l 1033 ]
DECENTRALIZATION 4

In my view, the authors have done as the analysis also helps explain the behavior of

anomalies in IT expenditure. The current literature acknowledges differences in IT investment

from business partners and guides managers to a deviation approach in this regard. These reports,

however, concentrate on variations from market expectations. Our emphasis on deviating from

the firm's IT investment strategy, 2, and the role of IT decentralization and other governance

structures to intensify and minimize those discrepancies gives us a new prospect.[ CITATION

Lin21 \l 1033 ]

The author could have done better with the methodology as the reader will get by these

results that will contribute to IT investment and IT study by pointing to the key functions of

REM, IT decentralization, and frameworks for corporate governance in influencing corporate IT

investment.[ CITATION Lin21 \l 1033 ]

With the control viewpoint in IT, decentralization limits the variety and difficulty of IT

choices by top management from a control. It eliminates the gap in expertise between

administrators and senior managers, making successful management supervision simpler.

Independent board members also rely upon additional IT expertise from outside the company to

rule IT decisions. Instead of basic IT routines in companies, IT is a complementary experience

that is more applicable to high-level strategic IT decisions. Determinants and implications of IT

investment were investigated in previous IS research with two prevailing outlooks; however, the

REM is not considered in any of those perspectives. Second, an approach to value development

looks at how the organizational size, scope, and borderline decisions impact an organization's

impact on IT investment[ CITATION Lin21 \l 1033 ].

The authors have used quantitative methods in the research dynamic panel model for

estimating the main analysis in Information System research. Robustness analyses were done
DECENTRALIZATION 5

using an additional hazard measure. The "Entrenchment Index (EI)" is specifically used by

authors to calculate risks of takeover. The EI is developed from 6 of the 24 original Risk Metrics

provisions, which are most relevant from a legal and organizational point of view.[ CITATION

Lin21 \l 1033 ]

The authors have focused the methodology on making the Commitment to IT investment

plans with the REM, and this result confirms the opinion that managers' proneness to adjust

regular business practices at REM will influence the actual execution of IT investment plans.

REM is, therefore, less impact on the degree to which companies are making their projected

investments in IT technology for companies with more decentralized IT decisions. Moreover, the

IT decentralization position minimizing the negative relationship between REM and the degree

to which companies accomplish their expected IT infrastructure projects is complemented by two

frameworks for corporate governance—institutional ownership and acquisition security.

[ CITATION Lin21 \l 1033 ]

The audience would benefit from the study in professional lives by understanding the

concepts of managers who may have the impulse to risk the realization of expected IT

investment by short-term interests, often motivated by self-interest. Designed IT infrastructure

capital projects help boost short-term profits by reducing the costs associated with capital

depletion. Different software and adapters, IT work, guarantees, and facilities can be expanded to

develop and extend IT infrastructure[ CITATION Lin21 \l 1033 ].

I understood the concept in the different industries as Centralization often enables top

management to tighten oversight over different corporate units to manipulate IT expenditure. I

can decide the activities in the organization as per understanding. Centralization can force local

managers to cope with top managers' burden as an intermediate layer of business ownership and
DECENTRALIZATION 6

local units. Centralization allows them to funnel more information and limit IT investment

operations, making it more difficult for REM to spot IT investment exploitation[ CITATION

Lin21 \l 1033 ].

The alternative viewpoint to the authors' position is for preparing accounting literature

that shows that managers are using actual income management. The degree to which REM

affects IT expenditures' execution remains unclear to short-term modification to the usual market

practices to attain profit efficiency objectives. Since IT decentralization less involves top

managers in IT everyday activities, unbiased board members may use their respective expertise

to interpret better and review top managers' IT decisions. The IT decentralization and the board's

independence in limiting the misuse of IT investments in the REM should be complementary in

this context[ CITATION Lin21 \l 1033 ].

DECENTRALIZATION 7

Author Credentials

Saldanha, T. L. (2020). Aligning Information Technology and Business: The Differential Effects

of Alignment During Investment Planning, Delivery, and Change. Information Systems

Research, 31(4), 1260-1281.

Xue, L., Ray, G., & Sambamurthy, V. (2013). The impact of supply-side electronic integration

on customer service performance. Journal of Operations Management, 31(6), 363-375. Retrieved

from https://isiarticles.com/bundles/Article/pre/pdf/21080.pdf

Xue, L., Yang, K., & Yao, Y. O. (2015). Inter-Firm Managerial Social Ties, IT Supplier

Selection and IS Complexity. SSRN

DECENTRALIZATION 8

References

Xue, L., Mithas, S., & Ray, G. (2021). Commitment to its investment plans: the interplay of real

earnings, management, it decentralization, and corporate governance. MIS Quarterly,

45(1), 193-224. doi:10.25300/MISQ/2021/14970