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Three essays on the influence of information technology on the organization of firms

IP.com Disclosure Number: IPCOM000128056D
Original Publication Date: 1999-Dec-31
Included in the Prior Art Database: 2005-Sep-14
Document File: 3 page(s) / 15K

Publishing Venue

Software Patent Institute

Related People

Wenger, Albert E: AUTHOR [+3]

Related Documents

http://theses.mit.edu:80/Dienst/UI/2.0/Describe/0018.mit.theses/1999-115: URL

Abstract

The three papers in this thesis are devoted to understanding how Information Technology (IT) has and will continue to affect the organization of firms: IT and Firm Size The anecdotal evidence on changes in firm size is mixed. While spinoffs and downsizing suggest a trend towards smaller firms, the recent wave of mergers points to a trend towards larger firms. The paper analyzes US Business Census data to examine trends in firm size empirically and relate them to the use of IT. This exploratory study shows that the trends vary considerably across sectors: IT appears to be associated with a trend towards smaller firms in traditional manufacturing industries and a trend towards larger firms in information-based industries. The paper suggests a possible explanation by considering the combined effect of multiple mechanisms through which IT may affect firm size. IT and Hybrid Organizations There appears to be a shift away from both large bureaucratic organizations and individually competing entrepreneurs to "; hybrid organizations. "; For instance, horizontal and networked organizations attempt to combine the initiative shown by entrepreneurs with the coordination achieved in bureaucracies. The paper models a tradeoff between initiative and coordination encountered in organization design. Improved IT is shown to relax this tradeoff, so that hybrid organizations can achieve both more initiative and more coordination. The results from the model are used to anal) 7e the organizational design issues faced by hybrid organization. A case study of Siemens Nixdorf Information Systems (SNI) is used to illustrate the managerial implications.

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 This record is the front matter from a document that appears on a server at MIT and is used through permission from MIT. See http://theses.mit.edu:80/Dienst/UI/2.0/Describe/0018.mit.theses/1999-115 for copyright details and for the full document in image form.

Three Essays on the Influence of Information Technology on the Organization of Firms

by

Albert E. Wenger
AB Economics Harvard University, 1990
Submitted in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY
Sloan School of Management

at the Massachusetts Institute of Technology

FEBRUARY 1999
(C) 1999 Albert E. Wenger. All rights reserved.

The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part.

SIGNATURE OF author: [[signature omitted]]

Sloan School of Management

September 30,1998
CERTIFIED BY: [[SIGNATURE OMITTED]]

Erik Brynjolfsson Associate Professor of Management Thesis Supervisor ACCEPTED BY: [[SIGNATURE OMITTED]]

Birger Wernerfelt

Professor of Marketing Chairman, Doctoral Program Committee Sloan School of Management ARCHIVES MASSACHUSETTS INSTITUTE OF TECHNOLOGY LIBRARIES DEC 03 1998

ABSTRACT

Massachusetts Institute of Technology Page 1 Dec 31, 1999

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Three essays on the influence of information technology on the organization of firms

The three papers in this thesis are devoted to understanding how Information Technology (IT) has and will continue to affect the organization of firms:

IT and Firm Size

The anecdotal evidence on changes in firm size is mixed. While spinoffs and downsizing suggest a trend towards smaller firms, the recent wave of mergers points to a trend towards larger firms. The paper analyzes US Business Census data to examine trends in firm size empirically and relate them to the use of IT. This exploratory study shows that the trends vary considerably across sectors: IT appears to be associated with a trend towards smaller firms in traditional manufacturing industries and a trend towards larger firms in information-based industries. The paper suggests a possible explanation by considering the combined effect of multiple mechanisms through which IT may affect firm size.

IT and Hybrid Organizations

There appears to be a shift away from both large bureaucratic organizations and individually competing entrepreneurs to " hybrid organizations. " For instance, horizontal and networked organizations attempt to combine the initiative shown by entrepreneurs with the coordination achieved in bureaucracies. The paper models a tradeoff between initiative and coordination encountered in organization design. Improved IT is shown to relax this tradeoff, so that hybrid organizations can achieve both more initia...