Management Emotion and Firm's Strategic IT Investment Propensity

Different from prior IS business value literature that has largely taken rational decision-making for granted, this paper investigated the impacts of management emotion on firms' propensity of strategic IT investment. Based on 191 annual reports of 32 companies from three industries in a 6-year period (i.e. 2010-2015 fiscal year), we applied sentiment analysis to retrieve emotion tunes embedded in each report and analyzed their relationship with both the volume and the composition of three types of strategic IT investment signals (automate, informate, and transform) embedded in the annual report of the subsequent year. Results show that positive management emotion promotes firm's propensity of all types of strategic IT investments and increases weights of informate and/or transform IT among all strategic IT investments. With positive management emotion, firms also show propensity of investing in strategic IT different from the industry's dominant IT strategic role.