Power and information technology: a review using metatriangulation
ICIS '00 Proceedings of the twenty first international conference on Information systems
Computational & Mathematical Organization Theory
Lines of advance in global information technology management: American/West European approach
Advanced topics in global information management
Exploration and exploitation: knowledge sharing in digital government projects
dg.o '04 Proceedings of the 2004 annual national conference on Digital government research
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dg.o '04 Proceedings of the 2004 annual national conference on Digital government research
Governance-Knowledge Fit in Systems Development Projects
Information Systems Research
Environmental Uncertainty and IT Infrastructure Governance: A Curvilinear Relationship
Information Systems Research
The role of professional discourses in the organisational adaptation of information systems
International Journal of Information Management: The Journal for Information Professionals
Information Resources Management Journal
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We study the impact of information technology (IT) on the profitability of individual organization designs and on the relative profitability of different organization designs. We develop models where organization design is defined by the location of investment decision authority. We consider global and local investment when there is an information asymmetry between a central authority and decentralized nodes-decentralized nodes make better local investment decisions because of their local knowledge. We define three separate organization designs: a hierarchy where all investments are made by a central authority, a market where all investments are made by the decentralized nodes, and a mixed mode where global investments are made by a central authority and local investments are made by decentralized nodes. Because of complementarities between global and local investment, we show that there is under investment relative to first-best in all three organization designs. We also find that IT can be used to mitigate that underinvestment, either by bringing information to the decision maker or by redesigning the monitoring and incentive structure. We demonstrate that IT does not necessarily favor decentralized organization designs, and we show how the costs of coordination may resultin the mixed mode being dominated by one or both of the alternative organization designs. Thus, collocation of investment decision rights and information that results in decisions that require coordination might not be optimal when the costs of not synchronizing global and local investment are high.