Information Technology and Organizational Complements: Firm Value Implications

Complementary investment in information technology (IT) and organizational work practices enable a firm to respond strategically to competitive challenges. Specific combinations of these investments, as called for in organizational programs, are implemented in a coordinated manner to bring about a change more consistent with the external environment, resulting in improved firm performance. While a plethora of existing research examines the value generated from each factor individually, there is a need for research that examines the performance implications of complementary investments in organizational programs and IT across a broad set of firms. In this research-in-progress, we examine the performance impacts of Employee Involvement and Total Quality Management; two participative management programs selected specifically to involve employees in daily decision making. Preliminary empirical results indicate that IT is a key enabler of select work practices of these participative programs and that together, these complementary investments can positively contribute to firm performance.