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IT capabilities, including IT governance, are widely believed to affect the value organizations derive from IT. This paper focuses on what may be an important strategy for building enterprise-wide IT capabilities in large decentralized organizations: undertaking an IT centralizing reorganization to concentrate authority for IT activities and decisions at the headquarters level of an enterprise. IT centralizing reorganizations are theorized to change an organization's IT governance in ways that promote capability development and enable enterprise-wide IT initiatives such as IT consolidation and outsourcing. These ideas are explored through a multi-method study of US state governments.
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