Lorin M. Hitt, Erik Brynjolfsson
Hitt, Lorin M. and Erik Brynjolfsson (1997). “Information Technology and Internal Firm Organization: An Exploratory Analysis,” Journal of Management Information Systems 14 (2): 81-101
Publication year: 1997

This paper examines the relationship between information technology (IT) and the organizational architecture of firms.  Firms that are extensive users of information technology tend to adopt a complementary set of organizational practices that include:  Decentralization of decision authority, emphasis on subjective incentives, and a greater reliance on skills and human capital.  We explore these relationships using detailed data on work systems and information technology spending for 273 large firms.  Overall, we find that increased investment in IT is linked to a system of decentralized authority and related practices.  Our findings may help resolve some of the questions about the relationships of information technology to internal organizational and provide insight into the optimal organization of knowledge work.

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