Information Technology and Organizational Structure Revisited: Implications for Performance

While the relationship between information technology (IT) and organizational structure has long been a focus of research from a descriptive and prescriptive point of view, few solid results have been found as of yet linking this relationship to enterprise level performance. This can be attributed to problems related to the definition and measurement of IT, performance and "fit" between technology and structure. In trying to overcome some of these problems, an empirical study was conducted among 108 small and medium-sized manufacturing firms, using a comprehensive instrument to measure IT sophistication in lieu of individual criterion variables. Controlling for organizational size and environmental uncertainty, it was found that IT sophistication is positively related to structural sophistication, IT sophistication is positively related to organizational performance, and the relationship between IT sophistication and structural sophistication is stronger among high-performing firms than among low-performing firms.