There have been several attempts in the past to assess the impact of information technology on firm performance that have yielded conflicting results. Researchers have been unable to conclude that IT spending by an organization results in increases in key performance indicators. Two major recent studies have attempted to address the issue by putting greater emphasis on the theoretical underpinnings of the solution to the problem, although they chose different theoretical frameworks. The present study extends that work to yield a framework that shows the relationship between firm performance and both IT and corporate investments. The data used to validate the framework exceeds that used in previous analyses in both quality and quantity, thereby permitting appropriate statistical analyses. A large database consisting of over 2,000 observations of 624 firms was constructed, using data provided by the International Data Corporation, Standard & Poor's Compustat, and Moody's. This allowed the authors to pose the following research questions: (a) Can the relationship between sets of investment measures and firm performance be demonstrated (as opposed to individual measures)? (b) How are IT investments related to a firm's market value, market share, sales, and assets? and (c) Is there a difference in the effect of computer capital and noncomputer capital?
Defects in computer-based systems (CBS) can adversely affect systems development efforts and can present serious legal challenges to developers. Of particular significance are the torts of strict products liability and negligence that can arise as a result of harm or injury resulting from, among other things, poor testing of systems, inadequate warnings, or failure to use state-of-the-art technology. The threat of injury has caused federal and state agencies and legislatures to consider seriously courses of action to inhibit the more injurious effects of such systems. This paper examines these two torts in some detail and illustrates how CBS developers could be threatened as a result of defective systems. We also present a framework for injury assessment and reduction of legal liability that can be used to guide CBS developers in assessing the possibility of injury resulting from development flaws. Further, the framework aids developers in their decision-making process by identifying appropriate measures to take to reduce their legal liability arising from what could be determined to be faulty systems development efforts. In addition, the use of the measures suggested by our framework might provide safer systems to avoid harming individuals.