Information technology and business transformation : work location and the allocation of decision rights

(cont.) as well, firms have an incentive to require coordinated investments in technology across the enterprise. Still, research in IS has also highlighted the fact that the productivity of computer investments is highly dependent on co-investment in complementary assets (for instance, tacit knowledge and specialized work processes). Many of these additional investments are intangible and highly dependent on the local expertise and the knowledge of the branch or division. When local knowledge is important, the uninformed headquarters have an incentive to delegate decision rights to the local branch. I develop a mathematical model to analyze this tradeoff and derive testable hypotheses that relate IT investment diversity and the allocation of decision rights. Decentralization leads to less uniform IT investments and is more likely the less vertically integrated the firm is. I also provide some empirical support for these hypotheses using a large dataset of firms' IT investments and allocation of purchasing decision rights.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2004

Author dc:creator

• Fitoussi, David, 1974-

Advisor dc:contributor.advisor

• Eric Brynjolfsson.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/28686

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/28686