The Influence of Information Technology on the Use of Loosely Coupled Organizational Forms: An Industry-Level Analysis

@article{citeulike:2974507, abstract = {Information technology (IT) enhances coordination both within the firm and between the firm and its external partners. Consequently, IT investment can promote both loosely and tightly coupled organizational forms. Indeed, in some industries, widespread investment in IT is associated with high levels of disaggregation. In other industries, this is not the case. We argue that the specific influence of IT on firm boundaries depends on the broader industrial context. We investigate conditions whereby IT investments enable industries to be more loosely coupled through alliance formation and the use of contingent workers. We use transaction cost and modular systems theory to ground our theoretical development. The extent to which industrywide IT investment is associated with loosely coupled organizational forms depends on (1) limited asset specificity because of industry standards, (2) the level of industry uncertainty resulting from technological change, and (3) the overall complexity of the industry in terms of diverse inputs. Specifically, when industry standards exist, IT investment leads to greater use of both alliances and contingent workers. IT investment has a stronger positive relationship with the use of contingent workers when levels of technological change are low as compared to when levels of technological change are high. When there are high levels of input diversity and industry standards exist, IT investment led to an increased use of contingent workers. Our analyses provides a more refined view of IT influence on firm boundaries. 10.1287/orsc.1070.0285}, author = {Sahaym, Arvin and Steensma, Kevin H. and Schilling, Melissa A. }, citeulike-article-id = {2974507}, doi = {10.1287/orsc.1070.0285}, journal = {ORGANIZATION SCIENCE}, keywords = {ict, meso, micro, standards, supply-chain}, month = {September}, number = {5}, pages = {865--880}, posted-at = {2008-07-09 08:54:33}, priority = {2}, title = {The Influence of Information Technology on the Use of Loosely Coupled Organizational Forms: An Industry-Level Analysis}, url = {http://dx.doi.org/10.1287/orsc.1070.0285}, volume = {18}, year = {2007} }

TY - JOUR ID - citeulike:2974507 L3 - citeulike-article-id:2974507 TI - The Influence of Information Technology on the Use of Loosely Coupled Organizational Forms: An Industry-Level Analysis JF - ORGANIZATION SCIENCE VL - 18 IS - 5 SP - 865 EP - 880 N2 - Information technology (IT) enhances coordination both within the firm and between the firm and its external partners. Consequently, IT investment can promote both loosely and tightly coupled organizational forms. Indeed, in some industries, widespread investment in IT is associated with high levels of disaggregation. In other industries, this is not the case. We argue that the specific influence of IT on firm boundaries depends on the broader industrial context. We investigate conditions whereby IT investments enable industries to be more loosely coupled through alliance formation and the use of contingent workers. We use transaction cost and modular systems theory to ground our theoretical development. The extent to which industrywide IT investment is associated with loosely coupled organizational forms depends on (1) limited asset specificity because of industry standards, (2) the level of industry uncertainty resulting from technological change, and (3) the overall complexity of the industry in terms of diverse inputs. Specifically, when industry standards exist, IT investment leads to greater use of both alliances and contingent workers. IT investment has a stronger positive relationship with the use of contingent workers when levels of technological change are low as compared to when levels of technological change are high. When there are high levels of input diversity and industry standards exist, IT investment led to an increased use of contingent workers. Our analyses provides a more refined view of IT influence on firm boundaries. 10.1287/orsc.1070.0285 KW - ict KW - meso KW - micro KW - standards KW - supply-chain AU - Sahaym, Arvin AU - Steensma, Kevin AU - Schilling, Melissa PY - 2007/09/01/ UR - http://dx.doi.org/10.1287/orsc.1070.0285 ER -