Abstract
With the growing significance of artificial intelligence (AI), the examination of a compa-
ny's overall strategic alignment towards the development and use of AI, referred to as AI
orientation, has captured increased attention in the literature. However, the impact of
technology-focused TMT roles on such strategic alignment in U.S. companies remains
ambiguous. Building on Upper Echelons Theory, this study investigates the influence of
chief information officers (CIOs) and chief technology officers (CTOs) on firms' AI ori-
entation by analyzing question-and-answer sections from earnings conference calls.
Based on the premise that IT and AI investments are strongly interdependent within firms,
this study also explores the moderating effect of industry IT intensity. Using a panel da-
taset comprising 3,811 firm-year observations of U.S. S&P 500 companies from 2012 to
2020, the results confirm a positive effect of CTO presence on AI orientation. Unexpect-
edly, no significant effect of CIO presence or a moderating effect of industry IT intensity
on the relationship between CIO, CTO and AI was identified. These findings not only
highlight the strategic importance of the CTO role in U.S. companies but also underscore
differences between CIO and CTO roles. This study contributes to the literature by ex-
ploring the distinct impacts of specific TMT roles on AI orientation in U.S. firms and
identifying relevant areas for future research, such as a deeper analysis of the differences
between IT and AI in companies and the role of AI literacy within the TMT.
Keywords: AI Orientation, Chief Technology Officer, Chief Information Officer, Indus-
try IT Intensity, Top Management Team, Upper Echelons Theory
Table of Contents
- Abstract
- Table of Contents
- List of Figures
- List of Tables
- List of Online Appendix
- List of Abbreviations
- 1 Introduction
- 2 Theory and Hypothesis
- 2.1 Artificial Intelligence
- 2.1.1 Overview AI
- 2.1.2 AI in the Corporate Environment
- 2.1.3 AI Orientation & Top Management Skills
- 2.2 The Upper Echelons
- 2.2.1 Upper Echelons Theory
- 2.2.2 Who is Who?
- 2.2.3 CIO versus CTO
- 2.3 CIO, CTO and AI Orientation
- 2.4 External Environment and IT intensity
- 2.1 Artificial Intelligence
- 3 Methods
- 3.1 Data and Sample Overview
- 3.2 Measures
- 3.2.1 Dependent Variable
- 3.2.2 Independent Variables
- 3.2.3 Moderator Variable
- 3.2.4 Controls
- 3.3 Empirical Approach
- 4 Results
- 4.1 Descriptive Statistics
- 4.2 Regression Results
- 4.3 Robustness Checks
- 4.3.1 Alternative Operationalizations of Explanatory Variables
- 4.3.2 Alternative Analytic Approach
- 4.3.3 Alternative AI Orientation
- 4.3.4 Endogeneity
- 5 Discussion
- 5.1 Summary and Interpretation of the Results
- 5.2 Theoretical Contributions
- 5.3 Managerial Implications
- 5.4 Limitations and Avenues for Future Research
- 6 Conclusion
- References
- Appendix
Objective & Themes
This Master Thesis investigates the distinct influence of Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) on a firm's Artificial Intelligence (AI) orientation in U.S. S&P 500 companies, also exploring how industry IT intensity moderates this relationship. The primary goal is to understand the different roles these top management team members play in shaping a company's strategic alignment towards AI and to validate previous research findings in a new context.
- The transformative potential and strategic significance of Artificial Intelligence (AI) in corporate environments.
- The application of Upper Echelons Theory to explain the influence of top management characteristics on organizational outcomes.
- The distinct roles and responsibilities of Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) within Top Management Teams (TMTs).
- The concept of AI orientation and its measurement through advanced text-mining techniques.
- The moderating effect of industry IT intensity on the relationship between CIO/CTO presence and AI orientation.
- Empirical analysis using a panel dataset of U.S. S&P 500 companies to test hypotheses regarding leadership roles in AI strategy.
Excerpt from the Book
2.2.3 CIO versus CTO
The CIO is the highest-ranking IT top manager within an organization (Banker, Hu, Pav lou, & Luftman, 2011; Liu & Preston, 2021). Initially tasked with ensuring the seamless functioning of IT systems as a business support provider (Banker et al., 2011; Bendig et al., 2022), the CIO evolved into an executive position with diverse strategic competencies within the TMT in consequence of technological advancements (Bendig et al., 2022; Jar venpaa & Ives, 1991; Liu & Preston, 2021; Lorenz & Buchwald, 2023).
The CIO’s role is closely linked to the strategic importance of IT within an organization, as exemplified by varying definitions of the position used in the literature (Haffke et al., 2016; Menz, 2012; Peppard, Edwards, & Lambert, 2011). Initially intended as a support function and tool for process automation (exploitative), IT is now perceived as a driver for competitive advantage, innovation (explorative), and strategic transformation, such as digitalization (Bendig et al., 2022; Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013; Peppard et al., 2011). The heightened importance of IT elevates information management to the status of a critical resource (ibid.). Therefore, Applegate & Elam (1992) identified the emergence of the CIO role as marking the transition into the information age, while Bendig et al. (2022) describing it as the most visible signal of digitalization.
The responsibilities of the CIO include managing critical IT infrastructure, formulating IT-related business strategies (Chen & Wu, 2011), leveraging IT to create new market opportunities (Chun & Mooney, 2009), and contributing to an organizational change in the understanding and utilization of IT and data (Bendig et al., 2023; Chun & Mooney, 2009). The CIO position is often associated with overseeing the digital transformation of a company (Bendig et al., 2023; Firk et al., 2021), though such tasks may sometimes be allocated across various roles, such as the Chief Digital Officer (Ma, 2023). Chen and Wu (2011, p. 145) aptly described the CIO position as “one of the toughest [...] positions in the firm”. Additionally, IT projects often carry a high risk of failure (Grover & Kohli, 2013; Karhade & Qi Dong, 2021). Numerous adjustments and iterations may require sig nificant investments before an innovation can be realized, potentially resulting in unex pectedly high costs or project failure with detrimental effects on the business (Karhade & Qi Dong, 2021; Pinski et al., 2024). During the 1990s, CIOs frequently faced criticism and even terminations due to the challenging complexity of their role, which demands delivering returns and driving organizational change to justify the high expectations and investments related to IT (Peppard et al., 2011).
Conversely, the CTO is the highest-ranking technological executive within an organiza tion (Medcof, 2008) and is responsible for “scientific and technological issues within an organization“ (Liu & Preston, 2021, p. 969). The scope of technology under the CTO’s purview includes both IT and non-IT technologies. Garms & Engelen (2019) delineate that the CTO is primarily responsible for Research & Development (R&D) and innova tion, ensuring that these divisions closely monitor industrial advancements and possess adequate resources. Nath & Bharadwaj (2020) describe the CTO as having an Inside-Out orientation (Day & Moorman, 2010), suggesting that their initial focus is internal (what can be developed?), with an outward focus on where these developments can be applied.
Summary of Chapters
1 Introduction: This chapter introduces the transformative impact of Artificial Intelligence (AI) on businesses and society, highlighting the need to understand how top management influences a firm's strategic AI orientation, particularly differentiating between CIO and CTO roles.
2 Theory and Hypothesis: This section lays the theoretical groundwork by defining AI and its corporate implications, introducing AI orientation, and utilizing Upper Echelons Theory to develop hypotheses regarding the influence of CIOs, CTOs, and industry IT intensity on a firm’s AI strategy.
3 Methods: This chapter details the research methodology, including the cross-sectional panel data approach using S&P 500 companies, the text mining techniques employed to measure AI orientation from earnings call transcripts, and the specific definitions of dependent, independent, moderator, and control variables for empirical analysis.
4 Results: This section presents the empirical findings from the Generalized Estimating Equation (GEE) models, showing descriptive statistics, correlation coefficients, and regression results that support a positive effect of CTO presence on AI orientation but do not find significant effects for CIO presence or industry IT intensity as a moderator.
5 Discussion: This chapter interprets the results, discussing the significant role of CTOs in fostering AI orientation and the unexpected lack of a significant CIO effect, offering theoretical contributions, managerial implications, and identifying limitations and future research avenues.
6 Conclusion: This final chapter summarizes the study's core objective and findings, reaffirming the positive association between CTO presence and a firm's AI orientation, while noting the administrative alignment of CIOs and the distinct nature of AI compared to traditional IT initiatives.
Keywords
AI Orientation, Chief Technology Officer, Chief Information Officer, Industry IT Intensity, Top Management Team, Upper Echelons Theory, Artificial Intelligence, Strategic Management, Digital Transformation, Innovation, Research & Development, Text Mining, Empirical Study, Panel Data, Corporate Strategy
Frequently Asked Questions
What is this work generally about?
This Master Thesis investigates how the presence of Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) in top management influences a firm's strategic orientation towards Artificial Intelligence (AI), and how industry IT intensity moderates this relationship.
What are the central thematic fields?
The central thematic fields include Artificial Intelligence (AI) adoption and strategy, the roles of top management executives (CIOs and CTOs), Upper Echelons Theory, and the impact of the external environment, specifically industry IT intensity, on corporate decision-making.
What is the primary objective or research question?
The primary objectives are to determine how the presence of a CIO and CTO in U.S. companies influences a firm's AI orientation, to identify differences between these two roles in shaping AI strategy, and to examine how industry IT intensity affects these relationships.
Which scientific method is used?
The study employs a cross-sectional panel data research approach, utilizing text mining on quarterly earnings conference call transcripts to measure AI orientation, and applying a Generalized Estimating Equation (GEE) modeling approach for empirical analysis.
What is covered in the main part?
The main part of the thesis covers the theoretical foundations of AI and Upper Echelons Theory, details the methodology for data collection and analysis, presents the descriptive statistics and regression results, and provides a comprehensive discussion of the findings, including theoretical contributions, managerial implications, and limitations.
Which keywords characterize the work?
The work is characterized by keywords such as AI Orientation, Chief Technology Officer, Chief Information Officer, Industry IT Intensity, Top Management Team, Upper Echelons Theory, Artificial Intelligence, Strategic Management, Digital Transformation, Innovation, Research & Development, Text Mining, Empirical Study, Panel Data, and Corporate Strategy.
Why was no significant effect found for CIO presence on AI orientation?
The study found no significant positive effect for CIO presence, which might be attributed to context-specific factors (e.g., country differences from previous studies), the CIO's traditional alignment with administrative and efficiency-focused IT rather than product-oriented AI innovation, or the broad scope of CIO responsibilities that may dilute focus on specific AI initiatives.
How does the study define "AI orientation"?
AI orientation is defined as a company's overall strategic alignment towards the development and use of AI. It is measured quantitatively through a unique text-mining approach that analyzes the frequency and weighting of AI-related keywords in earnings conference call transcripts, incorporating sublinear transformation and pivot normalization for accuracy.
What is the "Upper Echelons Theory" and how is it applied here?
Upper Echelons Theory (UET) posits that an organization's strategic choices and outcomes are influenced by the characteristics and experiences of its top managers. In this study, UET is applied to understand how the presence, skills, and focus of specific TMT members, namely CIOs and CTOs, impact a firm's strategic AI orientation.
What is the main difference identified between CIO and CTO roles concerning AI?
The study highlights that CTOs, with their responsibility for R&D and innovation, are more product-oriented, exploratory, and research-driven, making them better suited to drive AI orientation. In contrast, CIOs are often perceived as more administratively focused on IT infrastructure and process optimization, which aligns less directly with the innovative and product-centric nature of AI initiatives.
- Citation du texte
- Maximilian Fröhlich (Auteur), 2025, Only an IT Thing? Leading the AI Agenda: The Role of CIOs versus CTOs in Shaping AI Orientation, Munich, GRIN Verlag, https://www.grin.com/document/1691838
