The distinct effects of Information Technology and Communication Technology on firm organization

John van Reenen, Nicholas Bloom, Luis Garicano and Raffaella Sadun

No 9762, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Guided by theories of management by exception, we study the impact of Information and Communication Technology on worker and plant manager autonomy and span of control. The theory suggests that information technology is a decentralizing force, whereas communication technology is a centralizing force. Using a new dataset of American and European manufacturing firms, we find indeed that better information technologies (Enterprise Resource Planning for plant managers and CAD/CAM for production workers) are associated with more autonomy and a wider span, while technologies that improve communication (like data intranets) decrease autonomy for workers and plant managers. Using instrumental variables (distance from ERP's birthplace and heterogeneous telecommunication costs arising from regulation) strengthens our results.

Keywords: Communication technology; Delegation; Information technology; Organization; Theory of the firm (search for similar items in EconPapers)
JEL-codes: F23 O31 O32 O33 (search for similar items in EconPapers)
Date: 2013-11
New Economics Papers: this item is included in nep-ict, nep-knm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://cepr.org/publications/DP9762 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: The Distinct Effects of Information Technology and Communication Technology on Firm Organization (2014)
Working Paper: The Distinct Effects of Information Technology and Communication Technology on Firm Organization (2009)
Working Paper: The distinct effects of information technology and communication technology on firm organization (2009)
Working Paper: The distinct effects of Information Technology and Communication Technology on firm organization (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:9762

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP9762

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().