The Distinct Effects of Information Technology and Communication Technology on Firm Organization

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

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Guided by theories of management by exception, we study the impact of Information and Communication Technology on worker and plant manager autonomy and on span of control. We find, using an original dataset of American and European manufacturing firms, 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, consistently with the theory. Using instrumental variables (distance from ERP's birthplace and heterogeneous telecommunication costs arising from regulation) strengthens our results.

Keywords: organization; delegation; information technology; communication technology; the theory of the firm (search for similar items in EconPapers)
JEL-codes: F23 O31 O32 O33 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-bec and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (74)

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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 (2013)
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)
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