[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v18y2007i5p865-880.html
   My bibliography  Save this article

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

Author

Listed:
  • Arvin Sahaym

    (College of Business, Washington State University, P.O. Box 644750, Pullman, Washington 99164)

  • H. Kevin Steensma

    (University of Washington, MacKenzie Hall, Box 353200, Seattle, Washington 98195, and Grenoble École de Management, 12, rue Pierre Semard, Grenoble, France)

  • Melissa A. Schilling

    (Stern School of Business, New York University, 44 West Fourth Street, New York, New York 10012)

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.

Suggested Citation

  • Arvin Sahaym & H. Kevin Steensma & Melissa A. Schilling, 2007. "The Influence of Information Technology on the Use of Loosely Coupled Organizational Forms: An Industry-Level Analysis," Organization Science, INFORMS, vol. 18(5), pages 865-880, October.
    • Handle: RePEc:inm:ororsc:v:18:y:2007:i:5:p:865-880
    DOI: 10.1287/orsc.1070.0285
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.1070.0285
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.1070.0285?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dale W. Jorgenson, 1984. "The Role of Energy in Productivity Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 11-26.
    2. Michael G. Jacobides & Stephan Billinger, 2006. "Designing the Boundaries of the Firm: From “Make, Buy, or Ally” to the Dynamic Benefits of Vertical Architecture," Organization Science, INFORMS, vol. 17(2), pages 249-261, April.
    3. Sirkka L. Jarvenpaa & Dorothy E. Leidner, 1999. "Communication and Trust in Global Virtual Teams," Organization Science, INFORMS, vol. 10(6), pages 791-815, December.
    4. Patrick Bolton & Mathias Dewatripont, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 809-839.
    5. Akbar Zaheer & N. Venkatraman, 1994. "Determinants of Electronic Integration in the Insurance Industry: An Empirical Test," Management Science, INFORMS, vol. 40(5), pages 549-566, May.
    6. Alex Bordetsky & Gloria Mark, 2000. "Memory-Based Feedback Controls to Support Groupware Coordination," Information Systems Research, INFORMS, vol. 11(4), pages 366-385, December.
    7. Donald Siegel & Zvi Griliches, 1992. "Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing," NBER Chapters, in: Output Measurement in the Service Sectors, pages 429-460, National Bureau of Economic Research, Inc.
    8. Terleckyj, Nestor E, 1980. "What Do R & D Numbers Tell Us about Technological Change?," American Economic Review, American Economic Association, vol. 70(2), pages 55-61, May.
    9. Hawkins, Richard, 1999. "The rise of consortia in the information and communication technology industries: emerging implications for policy," Telecommunications Policy, Elsevier, vol. 23(2), pages 159-173, March.
    10. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
    11. Marcello Estevao & Saul Lach, 1999. "The evolution of the demand for temporary help supply employment in the United States," Finance and Economics Discussion Series 1999-58, Board of Governors of the Federal Reserve System (U.S.).
    12. Todd R. Zenger & William S. Hesterly, 1997. "The Disaggregation of Corporations: Selective Intervention, High-Powered Incentives, and Molecular Units," Organization Science, INFORMS, vol. 8(3), pages 209-222, June.
    13. Jovanovic, Boyan & Rousseau, Peter L., 2005. "General Purpose Technologies," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 18, pages 1181-1224, Elsevier.
    14. Kevin J. Stiroh, 2002. "Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?," American Economic Review, American Economic Association, vol. 92(5), pages 1559-1576, December.
    15. Jean-Francois Hennart, 1993. "Explaining the Swollen Middle: Why Most Transactions Are a Mix of “Market” and “Hierarchy”," Organization Science, INFORMS, vol. 4(4), pages 529-547, November.
    16. Erik Brynjolfsson & Thomas W. Malone & Vijay Gurbaxani & Ajit Kambil, 1994. "Does Information Technology Lead to Smaller Firms?," Management Science, INFORMS, vol. 40(12), pages 1628-1644, December.
    17. Peter J. Brews & Christopher L. Tucci, 2004. "Exploring the structural effects of internetworking," Strategic Management Journal, Wiley Blackwell, vol. 25(5), pages 429-451, May.
    18. Kirk Monteverde, 1995. "Technical Dialog as an Incentive for Vertical Integration in the Semiconductor Industry," Management Science, INFORMS, vol. 41(10), pages 1624-1638, October.
    19. Timothy J. Sturgeon, 2002. "Modular production networks: a new American model of industrial organization," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 451-496, June.
    20. Lorin M. Hitt, 1999. "Information Technology and Firm Boundaries: Evidence from Panel Data," Information Systems Research, INFORMS, vol. 10(2), pages 134-149, June.
    21. Bruce Kogut, 1991. "Joint Ventures and the Option to Expand and Acquire," Management Science, INFORMS, vol. 37(1), pages 19-33, January.
    22. Kyle J. Mayer & Jack A. Nickerson, 2005. "Antecedents and Performance Implications of Contracting for Knowledge Workers: Evidence from Information Technology Services," Organization Science, INFORMS, vol. 16(3), pages 225-242, June.
    23. Michael J. Leiblein & Douglas J. Miller, 2003. "An empirical examination of transaction‐ and firm‐level influences on the vertical boundaries of the firm," Strategic Management Journal, Wiley Blackwell, vol. 24(9), pages 839-859, September.
    24. Gerardine DeSanctis & R. Brent Gallupe, 1987. "A Foundation for the Study of Group Decision Support Systems," Management Science, INFORMS, vol. 33(5), pages 589-609, May.
    25. Robert J. David & Shin‐Kap Han, 2004. "A systematic assessment of the empirical support for transaction cost economics," Strategic Management Journal, Wiley Blackwell, vol. 25(1), pages 39-58, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Miguel Perez‐Valls & Jose Cespedes‐Lorente & Juan Moreno‐Garcia, 2016. "Green Practices and Organizational Design as Sources of Strategic Flexibility and Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 25(8), pages 529-544, December.
    2. Ron Sanchez & Joseph T. Mahoney, 2013. "Modularity and economic organization: concepts, theory, observations, and predictions," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 20, Edward Elgar Publishing.
    3. Zhuo (June) Cheng & Barrie R. Nault, 2012. "Relative Industry Concentration and Customer-Driven IT Spillovers," Information Systems Research, INFORMS, vol. 23(2), pages 340-355, June.
    4. Kasper, Helmut & Lehrer, Mark & Mühlbacher, Jürgen & Müller, Barbara, 2013. "On the different “worlds” of intra-organizational knowledge management: Understanding idiosyncratic variation in MNC cross-site knowledge-sharing practices," International Business Review, Elsevier, vol. 22(1), pages 326-338.
    5. Zand, Fardad & Van Beers, Cees & Van Leeuwen, George, 2011. "Information technology, organizational change and firm productivity: A panel study of complementarity effects and clustering patterns in Manufacturing and Services," MPRA Paper 46469, University Library of Munich, Germany.
    6. Sahaym, Arvin & Treviño, Len J. & Steensma, H. Kevin, 2012. "The influence of managerial discretion, innovation and uncertainty on export intensity: A real options perspective," International Business Review, Elsevier, vol. 21(6), pages 1131-1147.
    7. de Leeuw, Tim & Gilsing, Victor & Duysters, Geert, 2019. "Greater adaptivity or greater control? Adaptation of IOR portfolios in response to technological change," Research Policy, Elsevier, vol. 48(6), pages 1586-1600.
    8. Dushnitsky, Gary & Yu, Lei, 2022. "Why do incumbents fund startups? A study of the antecedents of corporate venture capital in China," Research Policy, Elsevier, vol. 51(3).
    9. Ali Tafti & Sunil Mithas & M. S. Krishnan, 2013. "The Effect of Information Technology-Enabled Flexibility on Formation and Market Value of Alliances," Management Science, INFORMS, vol. 59(1), pages 207-225, June.
    10. Teryokhin Sergei & Hannås Gøril, 2017. "Pre-requisites of successful strategic electronic coordination: the moderation effect of the ownership mechanism of inter-organisational information systems," Engineering Management in Production and Services, Sciendo, vol. 9(4), pages 34-47, December.
    11. Sanchez, Ron & Mahoney, Joseph T., 2012. "Modularity and Economic Organization: Concepts, Theory, Observations, and Predictions," Working Papers 12-0101, University of Illinois at Urbana-Champaign, College of Business.
    12. Sahaym, Arvin & Steensma, H. Kevin & Barden, Jeffrey Q., 2010. "The influence of R&D investment on the use of corporate venture capital: An industry-level analysis," Journal of Business Venturing, Elsevier, vol. 25(4), pages 376-388, July.
    13. Constantinos S. Lioukas & Jeffrey J. Reuer & Maurizio Zollo, 2016. "Effects of Information Technology Capabilities on Strategic Alliances: Implications for the Resource-Based View," Journal of Management Studies, Wiley Blackwell, vol. 53(2), pages 161-183, March.
    14. YoungKi Park & Paul A. Pavlou & Nilesh Saraf, 2020. "Configurations for Achieving Organizational Ambidexterity with Digitization," Information Systems Research, INFORMS, vol. 31(4), pages 1376-1397, December.
    15. Peters, Frank, 2018. "The business of video games is a multi-player game : Essays on governance choices and performance in a two-sided market in the cultural industries," Other publications TiSEM 886b3148-4bbb-4ea4-b666-0, Tilburg University, School of Economics and Management.
    16. Richard Gentry & Heather Elms, 2009. "Firm Partial Modularity and Performance in the Electronic Manufacturing Services Industry," Industry and Innovation, Taylor & Francis Journals, vol. 16(6), pages 575-592.
    17. Dumas, Jean-Malik, 2016. "Essays in behavioral strategy," Other publications TiSEM a04c1b1b-eeed-48ad-894b-7, Tilburg University, School of Economics and Management.
    18. Gebauer, Judith & Mahoney, Joseph T., 2013. "Joining Supply and Demand Conditions of IT Enabled Change: Toward an Economic Theory of Inter-firm Modulation," Working Papers 13-0100, University of Illinois at Urbana-Champaign, College of Business.
    19. George, Elizabeth. & Chattopadhyay, Prithviraj., 2015. "Non-standard work and workers : organizational implications," ILO Working Papers 994883083402676, International Labour Organization.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gebauer, Judith & Mahoney, Joseph T., 2013. "Joining Supply and Demand Conditions of IT Enabled Change: Toward an Economic Theory of Inter-firm Modulation," Working Papers 13-0100, University of Illinois at Urbana-Champaign, College of Business.
    2. Sahaym, Arvin & Steensma, H. Kevin & Barden, Jeffrey Q., 2010. "The influence of R&D investment on the use of corporate venture capital: An industry-level analysis," Journal of Business Venturing, Elsevier, vol. 25(4), pages 376-388, July.
    3. Wenjie Chen & Fariha Kamal, 2016. "The impact of information and communication technology adoption on multinational firm boundary decisions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(5), pages 563-576, June.
    4. Matthew Bidwell, 2010. "Problems Deciding: How the Structure of Make-or-Buy Decisions Leads to Transaction Misalignment," Organization Science, INFORMS, vol. 21(2), pages 362-379, April.
    5. Yue Maggie Zhou, 2013. "Designing for Complexity: Using Divisions and Hierarchy to Manage Complex Tasks," Organization Science, INFORMS, vol. 24(2), pages 339-355, April.
    6. Hilal Atasoy & Rajiv D. Banker & Paul A. Pavlou, 2016. "On the Longitudinal Effects of IT Use on Firm-Level Employment," Information Systems Research, INFORMS, vol. 27(1), pages 6-26, March.
    7. Zand, Fardad & Van Beers, Cees & Van Leeuwen, George, 2011. "Information technology, organizational change and firm productivity: A panel study of complementarity effects and clustering patterns in Manufacturing and Services," MPRA Paper 46469, University Library of Munich, Germany.
    8. Scott, Susan V. & Van Reenen, John & Zachariadis, Markos, 2017. "The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services," Research Policy, Elsevier, vol. 46(5), pages 984-1004.
    9. Jain, Amit, 2011. "Connaissance, ressources, concurrence et les frontières de l'entreprise," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/6403 edited by Thiétart, Raymond-Alain.
    10. Rahul Kapoor, 2013. "Persistence of Integration in the Face of Specialization: How Firms Navigated the Winds of Disintegration and Shaped the Architecture of the Semiconductor Industry," Organization Science, INFORMS, vol. 24(4), pages 1195-1213, August.
    11. Michael G. Jacobides & Sidney G. Winter, 2012. "Capabilities: Structure, Agency, and Evolution," Organization Science, INFORMS, vol. 23(5), pages 1365-1381, October.
    12. Han, Chaodong & Porterfield, Tobin & Li, Xiaolin, 2012. "Impact of industry competition on contract manufacturing: An empirical study of U.S. manufacturers," International Journal of Production Economics, Elsevier, vol. 138(1), pages 159-169.
    13. Brianti, Marco & Gáti, Laura, 2023. "Information and communication technologies and medium-run fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 156(C).
    14. Thomas Hutzschenreuter & Florian Gröne, 2009. "Changing Vertical Integration Strategies under Pressure from Foreign Competition: The Case of US and German Multinationals," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 269-307, March.
    15. Roger Strange & John Humphrey, 2019. "What lies between market and hierarchy? Insights from internalization theory and global value chain theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1401-1413, October.
    16. Gautam Ray & Dazhong Wu & Prabhudev Konana, 2009. "Competitive Environment and the Relationship Between IT and Vertical Integration," Information Systems Research, INFORMS, vol. 20(4), pages 585-603, December.
    17. Rajiv D. Banker & Robert J. Kauffman, 2004. "50th Anniversary Article: The Evolution of Research on Information Systems: A Fiftieth-Year Survey of the Literature in Management Science," Management Science, INFORMS, vol. 50(3), pages 281-298, March.
    18. Chun, Hyunbae & Kim, Jung-Wook & Lee, Jason, 2015. "How does information technology improve aggregate productivity? A new channel of productivity dispersion and reallocation," Research Policy, Elsevier, vol. 44(5), pages 999-1016.
    19. Gerwin, Donald, 2006. "Buyer-vendor relations for components: The extreme example of custom integrated circuits," Research Policy, Elsevier, vol. 35(5), pages 673-690, June.
    20. Peters, Frank, 2018. "The business of video games is a multi-player game : Essays on governance choices and performance in a two-sided market in the cultural industries," Other publications TiSEM 886b3148-4bbb-4ea4-b666-0, Tilburg University, School of Economics and Management.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:18:y:2007:i:5:p:865-880. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.