MIT Sloan Management Review

Management of Technology and Innovation

IT in the 1990s: Managing Organizational Interdependence

By John F. Rockart and James E. Short

January 15, 1989

THERE IS AN ABUNDANCE OF THEORIES about the organizational impacts of information technology — but an odd lack of consensus, given the extraordinary attention this subject receives. Researchers at MIT’s Center for Information Systems Research recently attempted to refocus the issue, and in this article they describe the results of their investigation. They looked at the major theoretical approaches that have been propounded and found that each contributed something important, but that none was sufficient by itself. The authors synthesize the various schools of thought — and the results of their own research — by arguing that IT’s most important role is allowing firms to manage organizational interdependence. Ed.

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FOR THE PAST TWO DECADES, the question of what impact information technology (IT) will have on business organizations has continued to puzzle academics and practitioners alike. Indeed, in an era when the business press has widely disseminated the idea that IT is changing the way businesses operate and the way they relate to customers and suppliers, the question of technology’s impact on the organization itself has gained renewed urgency.

The literature suggests four major classes of impact. First, there is the view that technology changes many facets of the organization’s internal structure, affecting roles, power, and hierarchy. A second body of literature focuses on the emergence of team-based, problem-focused, often-changing work groups, supported by electronic communications, as the primary organizational form.

Third, there is the view that organizations today are “disintegrating” — their borders punctured by the steadily decreasing costs of electronic interconnection among firms, suppliers, and customers. Companies, it is believed, will gradually shift to more market-based organizational forms, with specialized firms taking over many functions formerly performed within the hierarchical firm.

Finally, a fourth view of organizational change arises from a technical perspective. Here, it is argued that today’s improved communications capability and data accessibility will lead to systems integration within the business. This, in turn, will lead to vasdy improved group communications and, more important, the integration of business processes across traditional functional, product,... To read the complete article, login or sign-up using the form below.

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