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Águila, A.R.; Bruque, S.; Padilla, A. (2003): �Lines of Advance in Global Information Technology Management: American/West European Approach� in Tan, F.B. (ed.): Advanced Topics in Global Information Management. Idea Group Publishing. London.

LINES OF ADVANCE IN GLOBAL INFORMATION TECHNOLOGY

MANAGEMENT. AMERICAN/WEST EUROPEAN APPROACH

Ana R. del Águila Obra University of Málaga, Spain Sebastián Bruque Cámara1 University of Jaén, Spain Antonio Padilla Meléndez

University of Málaga, Spain SUMMARY

During the last decades numerous theoretical frameworks have been developed in the

field of general management. Each theoretical framework has proved useful to explain

specific questions about the structure, processes or performance in the modern firm. In this

study we try to propose some connections between general management literature and IT

literature. Some of the most important management theories, such as the Transaction Costs

Economics, the Agency Theory, the Resource Based View and the Knowledge Based View

can be useful to explain specific IT issues. The final goal of this chapter is to propose several

lines of advance in global IT using different theories or frameworks as the basis for future

research.

1. Introduction

Information technology (IT) has proved to be an engine for social and economic

change in the last few decades (Castells, 1998). Organizations at the beginning of the 21st

Century have not only played a part in technological change but have constituted the principal

agent of modernization and progress in society in general. Various researchers in management

1 Correspondence to: Sebastián Bruque. E.U.P. Linares, University of Jaén, C/ Alfonso X el Sabio, 28, 23700 Linares (Jaén), Spain. Tfno: +34 953 026 571; Fax: +34 953 026 508; e-mail: sbruque@ujaen.es

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have studied the effects of IT on organizations, leading to a growing body of work in this

area.

Thus, among areas of research, the structural effects of IT have been studied

(Orlikowski and Robey, 1991), the links between investment in IT and performance

(Brynjolfsson et al., 1994), and the interrelations between the human element and IT (Ross,

Beath and Goodhue, 1996; among others). From a global perspective of business, the IT

implementation and diffusion (Palvia, 1997) with emphasis in different cultures and countries

(Enns and Huff, 1999; Davis, 1999; Palvia, Palvia and Whitworth, 2002) have been analyzed.

From the formal point of view, the new technologies have been analyzed from practically all

approaches and aspects of Economic and Organizational Theory. However, and despite the

variety of work done, there has been little effort of integration to put forward a complete and

global view of the knowledge accumulated during the past few decades.

In this study we attempt to make up for this lack of research, as well as giving a

synopsis of previous work and an attempt to advance our understanding. We propose a series

of future lines of research, the majority of them previously unexplored. To do this we have

structured the work into a first part in which we analyze the specialized literature, pointing out

the different theoretical perspectives from which the effects of IT on businesses have been

studied. Secondly we organize the proposed research according to various formal criteria, and

with regards to content. We end this study with an analysis and discussion of the proposed

areas of research, and we draw some final conclusions.

2. Approaches in the study of IT in management

IT has long ceased to be a specialist area restricted to qualified professionals of strictly

technical backgrounds. Even as early as the 1960�s a number of studies appeared that

attempted to analyze � although in a very speculative manner � the importance that IT might

have in the future in aspects such as inter-organizational communications (Kaufman, 1966) or

the generic impact in human communication and business (Licklider, 1960; Licklider and

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Taylor, 1968). Other authors were interested in problems concerning the management of

information administration systems or more generally in general information systems

(Dearden, 1966; Ackoff, 1967). Research began at that point which, from the point of view of

Management, tried to explain the behavior of the new technologies in the business system and

the effect it might have on the different characteristics of the company, such as size, structure,

processes and performance (Barney, 1986; Prahalad and Bettis, 1986).

Specifically the literature has been concerned with studying three questions related to

the presence of IT in the company (see Table 1). First, there was the need to resolve questions

arising from the introduction of the new technologies into the companies, from a purely

descriptive point of view, based on innovative companies and normally on the direct

experience of the author. The question being answered was what does this type of technology

do, or what can it do, in the company, paying attention to the different functions it carries out,

its features, and how it develops within the company. They are highly explorative studies,

whose principal objective is to instruct and inform the management about the business

possibilities of the new tools, and they rarely use elaborate theoretical models that allow

conclusive outcomes. We call this group of studies the Explorative Focus on IT in the

company. We can distinguish two areas of research: description of successful cases and the

use of the concept of the life-cycle to explain the evolution of IT in the company (see Table

1).

Second there is the research area concerned with the impact that IT has on business

structure. These are studies that analyze the forces, which upon application of technological

solutions, modify or alter the conditions in which companies organize internally. This

research draws on studies with a long tradition in fields related to the structure of

organizations, such as organizational design, the management of change, workgroups and

intra-organizational communication, analyzing the effect that IT has on the various structural

aspects. We shall call this area of research Structural Focus. This is one of the subjects most

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frequently related to IT, that is, the analysis of the relationship between this type of

technologies and the structure of the organization (Scott Morton, ed., 1991; Nault, 1998;

Robey and Boudreau, 1999; Malone, 1997; Hitt, 1999), how investment in IT is related to

variables measuring a company�s form, such as size, diversification, vertical integration and

options of growth (Dewan, Michael and Min; 1998) or the impact of IT on jobs (Martinko,

Henry and Zmud 1996; Barrett and Walsham, 1999). IT creates new options for

organizational design, and the new organizational forms in turn provide new opportunities for

the design of technology (Fulk and DeSanctis, 1995; 1999). Yates and Benjamin (1991) point

out that IT has repeatedly played a role in the evolution of organizational structures and assert

that innovations in IT have made new organizational forms possible, and vice versa. For their

part, Galbraith and Lawler III (1993) consider that IT can lead to the marketplace becoming

more efficient than the hierarchy in the market-hierarchy relation for the coordination and taking

of economic decisions.

Despite the limited level of consensus that exists in the field (Nault, 1998), it is

interesting to review the different structural aspects which could be modified by the

implantation and development of IT. Among these we could find the following effects, which

we set out as areas of research within this approach (see Table 1):

(1) The reduction in the number of hierarchical levels and flattening out of business

structures.

(2) The disappearance of routine jobs.

(3) The integration of departments.

(4) The formation of workgroups.

(5) The reduction of distance between executives and subordinates.

(6) The possible implantation of telecommuting.

(7) The relationship between IT architecture and organizational structure.

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Third, we will refer to work attempting to analyze the impact of IT on strategic.

management in the company, especially to the relation between the implantation of IT,

strategy and performance. There are distinct approaches which respond to the different

objectives of analysis of the strategic schools that have developed in the past decades:

Industrial Organization, Organizational Economics, Resource Based View, Population

Ecology, Institutional Theory, Strategic Networks Perspective, etc. We shall use the generic

term Strategic Focus to refer to the work done in this area.

The analysis of the relation between IT, organizational strategy and the gaining of

competitive advantage, began to reach maturity in the early 1980�s with the work of McLean

and Soden (1977); Parsons (1983); McFarlan, McKenney and Pyburn (1983); McFarlan

(1984); Benjamin et al. (1984); Rackoff, Wiseman and Ullrich, (1985); Cash and Konsynski

(1985); Bakos and Treacy (1986); Culnan and Markus (1987), and, especially, Porter and

Millar (1985). This work could all be considered under the technical framework of Industrial

Organization, after the fundamental work of Porter (1980, 1981, 1985), and of his theory of

competitive advantage. Subsequently, the different paradigms would have influence on the

researchers that were trying to explain the relation between IT and Strategic Management.

Thus we can consider the following research areas as coming within this strategic

approach: Industrial Organization and IT (at the industrial, company and strategic levels);

Organizational Economics and IT (efficient size of organization, influence of IT on structures;

IT and organizational size); Productivity Paradox; Strategic Necessity Hypothesis and the

Resource Based View and IT. In the last case we consider the joint behavior of resources and

IT; the analysis of strategic resources complementary to IT; the impact of IT on the diffusion

and management of organizational knowledge. As other perspectives, we highlight the Upper

Echelon Focus and IT; the Dynamic Capabilities Framework and IT; and the Perspective of

the Stakeholders and IT (see Table 1). Also, is highlighted the focus on Global Information

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Technology Management that analyzes the IT implementation and adoption differences

among different cultures and countries (Palvia, Palvia and Whitworth, 2002).

--------------------------------------- Insert Table 1 about here

--------------------------------------- The Internet as part of the new paradigm

In the past few years there has been a growing interest among researchers in Business

Management in the impact that the appearance of TCP/IP technologies are having on

companies at the beginning of the 21st Century, since the Internet has meant a fundamental

change in the way organizations are managed and structured (Rayport and Sviokla, 1995). For

companies, the Internet is an international network of computers providing the possibility of

interchanging information internally or communicating with other organizations (Águila and

Padilla, 2000). The technological revolution that the Internet has brought about has resulted in

the appearance of a high number of expressions that, more or less accurately, refer to the

impact of the Internet on the organization. Among them we could cite e-business, e-

commerce, e-tail, e-shift, e-procurement, e-government, e-recruiting, e-fulfilment, e-branding,

e-logistics, virtual organization, etc. (Águila and Padilla, 2001). With the aim of clarifying

the terminological question, we shall try to define and delimit the most important concept

mentioned: e-business. The term e-business can be defined as the way in which companies

and individuals gain value through the use of the Internet and related technologies. Therefore

e-business consists in redefining the processes of the company by interconnecting them with

their members, clients and suppliers (Hackbarth and Kettinger, 2000). That means

reorganizing the company so that it has the ability to interchange goods, services, money and

knowledge digitally, that is by using Internet-based IT. The use of the term e-business, as well

as the practical application of it, has grown considerably with the development of business

applications on the Internet, and especially on the World Wide Web. In this context, the

following might be considered to be covered by the term e-business (Riggins and Mitra,

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2001): Intranet applications (business-to-employed); business-to-business applications

(extranet); electronic mail for the interchange of information and knowledge between

companies; business-to-consumer (internet): on-line orders of products and services,

interchange of information about the product, joint development of products, customer

services etc. Other similar ideas refer to the specific use of the Internet (WWW), which

affects a specific field of business management. Electronic commerce or e-commerce is the

electronic interchange of data and information corresponding to an electronic transaction,

which fundamentally covers commercial activities realizable on the Internet:

(1) The establishment of contacts between clients and suppliers.

(2) The interchange of goods and services.

(3) The interchange of commercial information.

(4) The on-line provision of digital products, like music, or books.

(5) The electronic payment.

(6) The provision of services on-line.

Despite the huge number of studies carried out on the Internet and its role in the

company, few of them have dealt with the problem from a formal approach within

Management. One of the pioneering, and most relevant study among those carried out

recently has been due to Rayport and Sviokla (1995). These authors institutionalized the terms

virtual value chain, and marketspace, asserting that current businesses are competing in two

�different worlds or environments�, one being the physical world, of resources, which

executives can see and touch � the marketplace � and the other, a virtual world or

marketspace, arising from the almost exclusive use of IT and data transmission tools (Rayport

and Sviokla, 1995). It is also their view that the Internet will affect the elements of the virtual

value chain, and that it might make more flexible support and primary activity. By way of

example, the Internet may modify the organizational structure of the company, and eliminate

intermediate hierarchical levels. With respect to primary activity, e-logistics, e-fulfillment and

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e-procurement are terms denoting means by which the traditional value chain may be affected

by the Internet. Subsequent to the work of Rayport and Sviokla, numerous studies in this field

have appeared, which we summarize in Table 2.

----------------------------------- Insert Table 2 about here

--------------------------------------- By way of synthesis we might say that the area of research, theoretical as well as

practical, on the impact of the Internet on the company, is still in its infancy. Many of the

studies are of an extremely speculative nature, with confusing terminology; they are directed

at the professional public with the principal aim of expounding the potential advantages of

using TCP/IP technologies. Nevertheless there is an emerging area of research aiming to

identify the circumstances in which the new technologies exercise a positive impact on the

company, and that is connected to the school that explains the behavior of IT in function of its

combined action with a series of complementary resources, of a human or business nature

(Powell and Dent-Micallef, 1997; Bharadwaj, 2000).

3. Discussion and future areas of research

Bearing in mind the above considerations, we aim to identify in this section the new

theoretical and empirical research lines. For this, in Figure 1 we have brought together the

theoretical approaches that may prove significant in explaining the organizational impact of

IT. In the interest of providing a more orderly vision of the problem, we have placed the

problems of future research in each one of the approaches analyzed in this chapter. These

approaches have been classified according to two criteria. In the left part of the graph, we

point out the origin of each approach, whether it be Economic Theory or Organizational

Theory. In the right part of the graph each approach is analyzed in relation to its implications,

whether strategic, structural or of explorative character. Additionally we have differentiated

that research that has more to do with e-business than the rest. Finally, and as a result of the

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discussion of the theoretical schools that we have undertaken in this work, we propose 21

areas of research.

The Economic Theory is the origin of the approaches Population Ecology, Resource

Dependence Theory, Industrial Organization and Agency Theory. Most of these approaches,

except the Ecological, pose implications for strategic management of IT. Population Ecology

(Hannan and Freeman, 1977; Aldrich, 1979; Brittain and Freeman, 1980; Soo, Oliga and

Puxty, 1980; McKelvey and Aldrich, 1983; Freeman and Boeker, 1984; Baum, 1999) may

provide progress in explaining the impact of the processes of technological discontinuity on

organizational survival, or the substitution of some technologies for others over a period of

time. According to the precepts of Ecological Theory, the introduction of new IT may favor

the survival of some organizations in a sector as opposed to others, especially in cases where

the management of information has a significant effect on the value chain. These effects have

been analyzed in relation to other technologies related to the productive system, although we

cannot find any study that analyses the impact of IT.

From the perspective of the Resource Dependence Theory (Aldrich and Pfeffer, 1976;

Pfeffer and Salancick, 1978; Pfeffer, 1982) it is possible to analyze the function of IT as a

scarce resource of the environment and its influence on the strategic pre-eminence of some

organizations against others. This view claims that the possession or control of certain key

resources by an organization can result in the dependence of the rest of the organizations on

the first organization (Inkpen and Beamish, 1997). Additionally it asserts that there are three

critical factors in determining the dependence of one organization on another, and therefore

its relative power (Medcof, 2001):

(1) The importance of the resource, such that the more relevant the factor is, the

stronger will be the dependency relations of the organizations that lack it.

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(2) The existence of alternatives, such that the power of the company that possesses

the key resource decreases with an increase in the possibility of choice that

dependent organizations enjoy.

(3) The unlimited ability to take decisions that affect the resource, such that the

company with greater capability for decision will enjoy a privileged position. In a

broad sense the idea that underlies the Resource Dependence Theory is related to

the concept of scarcity and value in the Resource Based View, which explains

why they have recently been used jointly.

It is precisely from the relationship stated in point three that it becomes possible to

apply the Resource Dependence Theory to the field of strategic use of IT. Following the

framework of this theory, power relationships can be constructed between the organizations

that possess a key resource. If it is empirically demonstrated that this resource corresponds to

a specific IT resource, it follows that this technological tool is generating value for the

organization. If, additionally, it complies with the conditions of scarcity and inimitability, it

will lead to a sustainable competitive advantage.

Of the approaches we propose, Porter�s Competitive Strategy and Industrial

Organization (Porter, 1980; 1981; 1985; 1991) have been the ones that have left most

impression in the IT area (Ward, Griffiths and Whitmore, 1990), which is why the model has

been said to have lost relevance in recent times (Duhan, Levy and Powell, 2001; Amit and

Zott, 2001, p. 205). Nevertheless there is research open which is revising the theoretical

framework with the aim of explaining the effect of IT on the value chain in companies that are

IT intensive (Earl, 1989). We might suggest as unexplored areas of research to explain the

influence that variables of the industry external to the company might have, on the

implantation, development and competitive performance of IT (Bruque, 2001). In this sense,

it would be interesting to find out if factors like number of competitors, the intensity of

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competitive rivalry, the level of innovation or the fluidity in the circulation of information

within the industry, determine the real competitive capability of IT.

Agency Theory (Jensen and Meckling, 1976; Eisenhardt, 1989) has been very little

used up till now in research relating to IT, so that it is necessary to learn more about the

organizational behavior of IT that may be explained thanks to this theoretical paradigm. It

would be possible to analyze the relationships existing between the capital structure of the

company, the level of technology and the technological performance (Karake, 1995).

Research could be done on the link between the level of commitment of the executives

towards the company � shown in their investment of capital in the company stock � and the

use of IT, especially those tools that have most impact on performance. It would be likely in

this case that those executives most committed to the company would show more explicit

support for the introduction and development of IT and telecommunications tools, in an

attempt to achieve two aims: increase control over their management, on the one hand and

increase the profitability of the processes that involve intensive use of IT, on the other. Also,

from the perspective of Agency Theory it would be possible to study the influence of the

composition of the Board of Directors on the level of technology of the company and on its

technological performance. From the Agency perspective, the Boards can be used as tools of

control by the owners, which might affect the technology policy of the company, increasing,

for example, the computing systems of management control. An empirical justification for the

proposition requires, however, a deeper analysis, because the few research that have been

carried out have not found conclusive results.

As we pointed out before, work has been done that is concerned with the savings in

transactions resulting from the introduction of IT in the value chain in the company. The

theoretical framework of Transaction Cost Economics (Williamson, 1975, 1979, 1985) can be

especially efficient in predicting the success of IT systems aiming to reduce costs in the value

chain (Powell and Dent-Micallef, 1997) by creating economies of time or resources in the

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links that are intensive in information. The system of Computer-Aided Design and Computer-

Aided Manufacturing � CAD and CAM � are clear examples of the increase in efficiency in

production processes by using IT. But IT can also reduce transaction costs with clients

because it may reduce uncertainty in taking a commercial decision: the complexity of such a

decision, the asymmetry of information that the client sometimes faces, and the disadvantages

provoked by the loss of power of negotiation in a situation of �small numbers� (Williamson,

1975). IT may also reduce the indirect costs of transaction, such as the cost of adverse

selection or of moral risk (Amit and Zott, 2001).

In the field of relationships between companies, Clemons and Row (1991) undertook

an analysis of the circumstances in which IT could reduce transaction costs. Inter-company

collaboration (Dyer, 1997) may be one of the principal means by which IT reduces

transaction costs between companies, especially after the introduction of TCP/IP technology

(Amit and Zott, 2001). It would also be of interest to analyze how transaction costs behave in

the long term, bearing in mind that it has been shown that certain IT tools only lead to

benefits in the medium to long term (Brynjolfsson and Hitt, 2001). Although various authors

have suggested the importance of studying the creation of value by IT by means of a

reduction in transaction costs (Powell and Dent-Micallef, 1997), empirical evidence for this is

still scarce, and the area of research is still open.

We analyze, in the second group, the approaches originating in the Organizational

Theory, among which Institutional Theory, Resourced Based View and its most recent

derivations, and the Inter-Organizational Networks Framework. First, according to the

Institutional Approach (Selznick, 1957), companies act in a social environment that imposes

norms, values and behavior patterns which indicate what is acceptable and what is not from

the point of view of social behavior (Oliver, 1997). Thus the reasons for human behavior, and

therefore for that of organizations, go beyond the limits optimal from an economic point of

view, and can be explained in some cases in terms of social justification. The process by

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which companies adopt standard behaviors, ignoring the question of whether it is

economically optimal, is known as legitimation (Scott, 1987) and can give rise to decisions

that are ill thought out, the result of the determinism of the environment. This theoretical

framework may have strong research implications concerning IT, since in our opinion, it may

explain the phenomena of the automatic adoption by a company of certain new technologies

whose potential to create value is doubtful, to say the least. This approach would be useful to

throw light on some recent problems like the massive introduction, and lack of success, of a

large number of models of businesses based on the Internet. The Institutional Approach can

also provide a complementary explanation in the cases where, as we shall detail later, the

Resource Based View proves to be inadequate in explaining the success or relative failure of

the technological modernization of a company.

The Approach Based on Resources, or the Resource Based View (RBV) (Wernerfelt,

1984, 1995; Barney, 1986, 1991, 1995, 1996; Rumelt, 1987; Grant, 1991; Peteraf, 1993) has

been the dominant view in the development of the strategic approach in recent times

(Hoskisson et al. 1999), so that it has been used to explain various aspects regarding business

administration (Vicente-Lorente, 2001; Pettus, 2001). As we have already pointed out in this

chapter, a large number of analyses have related the creation of value by means of IT with the

gaining and maintaining of competitive advantage (Ross, Beath and Goddgue, 1996; Powell

and Dent-Micallef, 1997; Bharadwaj, 2000; Byrd and Douglas, 2001; Duhan, Levy and

Powell, 2001). The options for further research in this area consist in the identification of new

resources complementary to IT, and the description of the conditions under which IT behaves

as a valuable resource. We believe, with regards to this last point, that the Resource Based

View is insufficient, because it does not provide a definitive explanation for the effect by

which some companies introduce technology but then do not create value, or when they do

create value, they cannot take advantage of it. It would be useful to supplement the RBV with

other approaches, such as the above-mentioned Institutional Theory (Selznick, 1957), or that

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of the appropriation of value by stakeholders (Coff, 1999). Despite this weakness, the RBV

Theory, complemented with the Dynamic Capabilities Framework (Teece and Pisano, 1994;

Teece, Pisano and Shuen, 1997; Makadok, 2001), can serve as a basis from which to explain

the competitive impact of IT over a time period, an area with little empirical evidence so far.

The Resource Based View has a number of things in common with other theoretical

frameworks, like the Upper Echelon (Hambrick and Mason, 1984), Knowledge Management

(KBV) (Nonaka, 1991, 1994; Kogut and Zander, 1992, 1996; Hedlund, 1994; Bohn, 1994;

Nonaka and Takeuchi, 1995; Grant, 1996; Spender, 1996; Hansen, Nohria and Tierney, 1999)

or the Organizational Stakeholders Approach (Coff, 1999).

According to the KBV (Eisenhardt and Santos, 2001) IT utilization may potentiate the

positive effects of internal and external knowledge transfer. Knowledge is considered socially

constructed and the creation of meaning occurs in ongoing social interactions grounded in

working practices and in collaborative mechanisms. Those social interactions can be

encouraged by IT utilization. Various studies have pointed out the relevance of IT utilization

as a key element in the diffusion of organizational knowledge (Carneiro, 2000; Swan et al.,

1999).

Apart from KBV, the Upper Echelon and the Stakeholders can be further developed in

the future. The first (Pinsonneault and Kraemer, 1997; Pinsonneault and Rivard, 1998) may

be able to explain the interrelation between the characteristics of management, age, previous

experience, technological knowledge, international experience and the effective introduction

of the new technologies. It should be noted that there is a strong complementarity between

this approach and the Resource Based View because the personal and career characteristics of

the executives can be resources that are valuable, scarce and difficult to imitate, and in

combination with IT they may have a positive and lasting effect on competitive position. The

second may be able to explain the situations in which IT generates value although the

organization cannot take advantage of it in the form of income, benefits, or in general,

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increase in competitive advantage. In these cases it is certain powerful groups in the

organization (stakeholders) that absorb the resource�s capacity for creation of value.

----------------------------------- Insert Figure 1 about here

--------------------------------------- Strategic Networks (Freeman, 1979) are stable inter-organizational links that are

strategically important for the participating companies. They can take the form of strategic

alliances, joint ventures, associations in the long term between suppliers and customers, etc.

(Gulati, Nohria and Zaheer, 2000). There are some analyses that discuss the impact of IT on

the structure and effectiveness of strategic networks (Sproull and Kiesler, 1986; Fulk and

Desanctis, 1995), regarding IT as a enabler element on the network and a promoter of the

reduction of transaction costs between elements in the network, which, in turn, lead to the

advantages attributed to this type of structure. Among these advantages are for example

gaining the effects of learning, economies of scale and scope, cost cutting via a distribution of

risks and subcontracting parts of the value chain and certain company functions (Gulati, 1999;

Anand and Khana, 2000).

Little empirical work has been done, however, that analyses the influence of IT on the

structural variables of the network, such as centrality, size and network density. If, as is likely,

IT has an effect on these variables (Gulati, Noria and Zaheer, 2000) it will affect the learning

capability of company members of the network, and also the blocking and unblocking of new

alliances, lock in and lock out. In this way the new technologies may provide new

opportunities for global alliances, for example with companies geographically far apart, and at

the same time they may create problems for existing alliances. Thus, for example, the

introduction of new telecommunications tools may leave outside of the network companies

that do not use the new technology. The same effect occurred after the decline in UNIX as a

standard operating system, leading to the dismemberment of various strategic networks

designed to lead the operating systems market (Gomes-Casseres, 1994).

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Finally there are various approaches within the field of Business Administration

which may add new ideas to the problem of the behavior of IT in organizations. We are

referring to the Human Relations Framework (Mayo, 1945) and the Social Systems Focus and

Socio-technical Systems Focus (Trist and Bamforth, 1951; Emery and Trist, 1965). These

approaches attempt to explain the combined effects of technologies and the human element

within organizations. In the case of IT itself, the Socio-technical Focus has been used to

underline the necessity to adequately fit together the company culture, employee training and

the motivation towards the adoption of the new technologies, for a satisfactory final

performance of the technological tools (Davenport, 1999). As can be seen, this idea has been

extended and structured in later approaches which adopt the complementarity between the

human and technological elements, especially the Resource Based View, which we have

already outlined.

4. Conclusion

As we have shown in this work, the analysis of IT as an active element within the

company constitutes an interesting and multifaceted area of research. We have structured

these areas of proposed research, leaving aside the work of an explorative nature, into two

parts: on the one hand those approaches that refer to the impact on the structure of the

company, and on the other hand, those that analyze the interactions of the technology on the

company�s strategy and performance. In the last group we have been especially interested in

those approaches which might throw some light onto the problem of the conversion of the

implantation and development of computing and telecommunications technologies into

performance or sustainable competitive advantage. This precisely has been the area that has

most been studied in recent years. In the strategic as well as the structural issues we have

reviewed the most significant approaches in the literature. In each of them, we have identified

the criteria for when they are useful for the problem of the company management of IT,

underlining the research which we consider to be still unexplored and which may provide

17

material of interest for future research. As a result of the process, and taking into account the

limitations in terms of theoretical work, we can conclude that each one of the approaches

studied can provide useful explanations, in academic research as much as in management. We

should also stress that the area of analysis is a complex field in which studies may be

especially useful that use in a combined form a number of the approaches that we have

proposed.

Finally the irruption of the Internet and the so-called Digital Economy has revived the

interest in the areas of research of this work in all its forms. The latest studies are particularly

trying to find causes that explain the conversion of Internet technologies into competitive

advantage, and at the same time, find the solution to the reverse problem: why do these

technologies not always lead to better performance. Empirical research, the integration of the

proposed approaches in this chapter, and new ideas from Social Psychology or Marketing

may provide solutions to this problem.

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29

TA

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E 1

: PE

RSP

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IN T

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IT S

TU

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Fo

cus

Des

crip

tion

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Aut

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, pub

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ions

Ex

plor

ativ

e

Ans

wer

of w

hat I

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cou

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o in

th

e co

mpa

ny

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escr

iptio

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bes

t pra

ctic

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ycle

of l

ife

Lick

lider

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0); K

aufm

an (1

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; Lic

klid

er a

nd T

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68);

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l (19

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aven

port

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Boc

k an

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pple

gate

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5)

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son

and

Nol

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; Nol

an (1

981)

St

ruct

ural

IT

�s im

pact

on

orga

niza

tiona

l str

uctu

re

- D

owns

izin

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tteni

ng o

f the

bus

ines

ses s

truct

ure

- Lo

ss o

f cle

rical

wor

k -

Inte

grat

ion

of d

epar

tmen

ts

o

IT b

ased

inte

grat

ion

of d

epar

tmen

ts

o

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ning

and

man

agem

ent o

f wor

kgro

ups

- Le

ss d

ista

nce

betw

een

man

ager

s and

em

ploy

ees

- Im

plem

enta

tion

of te

leco

mm

utin

g -

Rel

atio

n be

twee

n IT

arc

hite

ctur

e an

d or

gani

zatio

nal s

truct

ure

Roc

kart

and

Shor

t (19

89);

B

rynj

olfs

son

et a

l. (1

994)

R

ocka

rt an

d Sh

ort (

1989

) W

alto

n an

d Su

sman

(198

7); R

ocka

rt an

d Sh

ort (

1989

); H

andy

(199

5); A

rmst

rong

and

Hag

el (1

996)

; Ja

rven

paa

and

Leid

ner (

1998

); C

othr

el a

nd W

illia

ms (

1999

); Sh

ani,

Sena

and

Ste

bbin

s (20

00)

Kie

lser

(198

7)

Prat

t (19

84);

Bla

nc (1

988)

; Kor

te, R

obin

son

and

Stei

nle

(198

8); J

anka

nish

(199

0); B

urch

(199

1); S

tanw

orth

an

d St

anw

orth

(199

1); H

addo

n (1

994)

; Om

mer

en (1

998)

; Kur

land

and

Ega

n (1

999)

M

arku

s and

Rob

ey (1

988)

; Alle

n an

d B

oynt

on (1

991)

; Mirv

is, S

ales

and

Hac

kett

(199

1); L

ucas

and

Bar

oudi

(1

994)

; Orli

kow

ski a

nd R

obey

(199

1); H

itt (1

999)

St

rate

gic

IT�s

impa

ct o

n St

rate

gic

Man

agem

ent

- In

dustr

ial O

rgan

izat

ion

and

IT

o

Indu

stry

Leve

l o

Com

pany

Lev

el

o

Stra

tegi

c Le

vel

- V

alue

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in a

nd IT

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rgan

izat

iona

l Eco

nom

ics a

nd IT

o

Opt

imal

size

of o

rgan

izat

ion

o

Influ

ence

of I

T on

gov

ernm

ent s

truct

ures

-

Prod

uctiv

ity p

arad

ox

- St

rate

gic

Nec

essi

ty H

ypot

hesi

s -

Res

ourc

e ba

sed

view

of t

he fi

rm a

nd IT

o

Join

t beh

avio

ur o

f res

ourc

es a

nd IT

o

Stud

y of

stra

tegi

c re

sour

ces c

ompl

emen

tary

to IT

-

Oth

ers p

ersp

ectiv

es

o

The

impa

ct o

f IT

on th

e di

ffusio

n an

d m

anag

emen

t of

orga

niza

tiona

l kno

wle

dge

(KB

V)

o

Upp

er e

chel

ons a

nd IT

o

The

Dyn

amic

Cap

abili

ties F

ram

ewor

k an

d IT

o

Stak

ehol

ders

and

IT-v

alue

app

ropr

iatio

n o

Glo

bal I

nfor

mat

ion

Tech

nolo

gy M

anag

emen

t

Pars

ons (

1983

); Le

vitt

(198

3)

Pars

ons (

1983

); Po

rter (

1980

) Po

rter a

nd M

illar

(198

6); C

ash

and

Kon

syns

ki (1

986)

; McF

arla

n, M

cKen

ney

and

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rn (1

983)

Po

rter a

nd M

illar

(198

6); L

audo

n an

d La

udon

(199

6); L

evy,

Pow

ell a

nd G

allie

rs, (

1999

) B

rynj

olfs

son

et a

l. (1

994)

M

alon

e an

d Sm

ith (1

988)

; Kar

ake

(199

5); M

alon

e, Y

ates

and

Ben

jam

in (1

987,

198

9)

Mar

chew

ka a

nd T

owel

l (20

00);

Bry

njol

fsso

n an

d H

itt (2

001)

; Bry

njol

fsso

n et

al.

(199

4); M

alon

e, Y

ates

and

B

enja

min

(198

7); G

urba

xani

and

Wha

ng (1

991)

; Cle

mon

s and

Row

(199

1); K

raut

et a

l. (1

999)

So

low

(198

7); A

lpar

and

Kim

(199

1); H

arris

and

Kat

z (1

991)

; Wei

ll (1

992)

; Bry

njol

fsso

n (1

993)

; Kru

eger

(1

993)

; Bry

njol

fsso

n an

d H

itt (1

995)

; Hitt

and

Bry

njol

fsso

n (1

995,

199

6); S

trass

man

n (1

990,

199

7, 1

998)

; M

ukho

pada

hyay

, Raj

iv a

nd S

riniv

asan

(199

7); P

inso

nnea

ult a

nd R

ivar

d (1

998)

; Bry

njol

fsso

n, H

itt a

nd Y

ang

(200

0); B

rynj

olfs

son

and

Hitt

(200

1)

Cas

h an

d K

onsy

nsky

(198

5); C

lem

ons a

nd K

imbr

ough

(198

6); C

lem

ons a

nd R

ow (1

991)

Po

wel

l and

Den

t-Mic

alle

f (19

97);

Ros

s, B

eath

and

Goo

dhue

(199

6)

Kee

n (1

993)

; Ben

jam

in a

nd L

evin

son

(199

3); K

ettin

ger e

t al.

(199

4); M

ata,

Fue

rst a

nd B

arne

y (1

995)

; Ros

s, B

eath

and

Goo

dhue

(199

6); H

ende

rson

and

Ven

katra

man

(199

3); V

enka

tram

an (1

994)

; Pow

ell a

nd D

ent-

Mic

alef

f (19

97)

Junn

arka

r and

Bro

wn

(199

7); G

urte

en (1

998)

; Sw

an e

t al.

(199

9); C

arne

iro (2

000)

K

arak

e (1

995)

; Pin

sonn

eaul

t and

Riv

ard

(199

8); M

artin

s and

Kam

bil (

1999

) M

iller

and

Sha

msi

e (1

996)

; Mak

adok

(200

1)

Am

it an

d Zo

tt (2

001)

Pa

lvia

(199

7); E

nns a

nd H

uff (

1999

); D

avis

(199

9); P

alvi

a, P

alvi

a an

d W

hitw

orkt

h (2

002)

.

30

T

AB

LE

2: R

ESE

AR

CH

ON

INT

ER

NE

T A

ND

MA

NA

GE

ME

NT

Aut

hor

Res

earc

h Li

ne

Des

crip

tion

and

mos

t im

porta

nt c

ontri

butio

ns

Poon

and

Sw

atm

an (1

995)

; Poo

n an

d St

rom

(199

7); S

chw

arzk

opf

(199

7); B

a, W

hins

ton

and

Zhan

g (2

000)

; Ler

ner (

2000

); C

han

and

Chun

g (2

002)

Impa

ct o

f Int

erne

t on

smal

l and

m

ediu

m-s

ized

com

pani

es

Use

of I

nter

net a

s a

tool

of c

olla

bora

tion

with

oth

er c

ompa

nies

, with

less

cos

t of c

omm

unic

atio

n; a

s an

inst

rum

ent o

f dire

ct m

arke

ting,

with

bet

ter a

cces

s to

the

com

pany

for p

oten

tial c

lient

s, an

d im

prov

ing

imag

e of

the

com

pany

. B

enja

min

and

Wig

and

(199

5, 1

997)

; Ray

port

and

Svio

kla

(199

5);

Nou

wen

s an

d B

ohw

man

(199

7); S

tenf

ield

, Kra

ut a

nd P

lum

mer

(1

997)

, Gro

ver a

nd R

aman

lal (

1999

); A

dela

ar (2

000)

; Ste

nfie

ld,

Cha

ng a

nd K

raut

(200

0); A

mit

and

Zott

(200

1)

Impa

ct o

f Int

erne

t on

coor

dina

tion

mec

hani

sms,

orga

niza

tion

and

mar

ket,

el

ectro

nic

orga

niza

tions

and

m

arke

ts

Impa

ct

of

Inte

rnet

on

co

ordi

natio

n m

echa

nism

s, or

gani

zatio

n an

d m

arke

t, w

ith

elec

troni

c or

gani

zatio

ns a

nd m

arke

ts, w

ith in

ter-

orga

niza

tiona

l inf

orm

atio

n sy

stem

s th

at li

nk th

e co

mpa

nies

. In

th

e re

latio

n be

twee

n pr

ovid

ers

and

clie

nts:

redu

ctio

n of

dis

tanc

e be

twee

n bo

th a

nd o

f the

pro

fit m

argi

n of

the

prov

ider

; inc

reas

ing

of th

e ch

ange

cos

t as a

con

sequ

ence

of t

he a

ppro

achi

ng b

etw

een

clie

nt a

nd

prov

ider

by

elec

troni

c to

ols.

H

aley

, Car

te a

nd W

atso

n (1

996)

; Law

renc

e an

d H

udso

n (1

996)

; B

loch

, Pig

neur

and

Seg

ev (1

996)

; Ho

(199

7); W

atso

n, A

ksel

sen

and

Pitt

(199

8); D

utta

and

Seg

ev (1

999)

; Jar

venp

aa a

nd T

iller

(1

999)

; Ven

katra

man

(200

0); G

ual a

nd R

icar

t (20

01)

Inte

rnet

pre

senc

e an

d its

stra

tegi

c pl

anni

ng

Poin

t out

the

adva

ntag

es o

f org

aniz

atio

ns m

ovin

g in

to th

e vi

rtual

spa

ce a

nd s

trate

gies

for

deve

lopi

ng

stra

tegi

c pl

anni

ng.

Mal

hotra

(199

3); F

ulk

and

DeS

anct

is (1

995,

199

9); O

rliko

wsk

i (2

000)

. Im

pact

of I

nter

net o

n th

e st

ruct

ure

of o

rgan

izat

ions

A

naly

ses t

he im

pact

of I

nter

net o

n th

e or

gani

zatio

nal s

truct

ures

from

the

resu

lts o

f the

stud

ies a

bout

IT

and

orga

niza

tiona

l stra

tegy

fiel

d. A

ll th

e au

thor

s agr

ee a

bout

the

impa

ct b

ut n

ot a

bout

its r

esul

ts.

Bak

os (1

991)

; Klin

g (1

994)

; Led

erer

, Mirc

hand

ani a

nd S

ims

(199

7); P

eter

son,

Bal

asub

ram

ania

n an

d Br

onne

nber

g (1

997)

; M

cWill

iam

(200

0); B

akos

and

Bry

njol

fsso

n (1

999)

; Dew

an,

Frei

mer

and

Sei

dman

n (2

000)

Inte

rnet

Bas

ed M

arke

ting

Expl

ains

ho

w

Inte

rnet

im

prov

es

the

perf

orm

ance

of

m

arke

ting

stra

tegi

es

of

dist

ribut

ion

and

prom

otio

n.

Que

lch

and

Kle

in (1

996)

; Ben

to a

nd B

ento

(199

6); K

oh a

nd

Bal

thaz

ard

(199

7); H

offm

an, N

ovac

k an

d C

hatte

rjee

(199

7);

Sark

ar, B

utle

r and

Ste

infie

ld (1

997)

; Tim

mer

s (19

98);

Rayp

ort

(199

9); R

appa

(200

0); A

mit

and

Zott,

(200

1); D

ai a

nd K

auffm

an

(200

1); F

igue

iredo

(200

1); E

isen

man

n (2

002)

.

Bus

ines

s Mod

els

Dev

elop

cla

ssifi

catio

ns o

f bus

ines

s m

odel

s of

com

pani

es w

ith In

tern

et p

rese

nce.

The

re a

re tw

o ba

sic

appr

oach

es: t

rans

actio

nal o

r ope

ratio

nal f

ocus

and

info

rmat

iona

l foc

us.

Car

ley

(199

9); K

ling

and

Lam

b (1

999)

; Orli

kow

ski (

1999

); Zi

mm

erm

an a

nd K

oern

er (1

999)

; Bry

njol

fsso

n an

d K

ahin

(200

0);

Hal

tiwan

ger a

nd Ja

rmin

(200

0); D

avid

(200

0); S

mith

, Bai

ley

and

Bry

njol

fsso

n (2

000)

; Zim

mer

man

(200

0); O

rliko

wsk

i and

Iaco

no

(200

0).

Dig

ital E

cono

my

Des

crib

es th

e ch

arac

teris

tics

of th

e ne

w e

cono

my,

or

digi

tal e

cono

my,

with

tech

nolo

gica

l int

erac

tion

amon

g th

e ag

ents

.

31

FIG

UR

E 1

. IT

Man

agem

ent.

Pers

pect

ives

inte

grat

ion

and

new

res

earc

h lin

es

Reso

urc

e B

ase

d V

iew

of

the F

irm

We

rne

rfe

lt (1

98

4)

Agency

Theory

Jen

sen

an

d M

eck

ling

(1

97

6)

Reso

urc

e D

ependence

Theory

Pfe

ffe

r a

nd

Sa

lan

zick

(1

97

8)

Tra

nsa

ctio

n C

ost

Eco

nom

ics

Will

iam

son

(1

97

5)

Inst

itutio

nal T

heory

Se

lzn

ick

(19

57

)

Str

ate

gic

Focu

s

Desc

riptiv

e F

ocu

s

Str

uct

ura

l Focu

s

Pro

po

sed

researc

h lin

es:

1.

Te

ch

no

log

ica

l d

isc

on

tin

uit

y a

s a

n e

xp

lic

ati

ve

fa

cto

r o

fo

rga

niz

atio

na

l su

rviv

al (

Po

pu

latio

n E

colo

gy)

2.

IT

as

an

en

viro

nm

en

tal

reso

urc

e a

nd

its

in

flue

nce

on

in

ter-

org

an

iza

tion

al d

ep

en

de

nce

(R

eso

urc

e D

ep

en

de

nce

Th

eo

ry)

3.

IT a

s t

he

fo

un

da

tio

n o

f d

iffe

ren

tia

tio

n a

nd

fo

cu

s s

tra

teg

ies

(Co

mp

etit

ive

Th

eo

ry)

4.

IT i

nfl

ue

nc

e o

n t

he

in

du

str

y s

tru

ctu

re a

nd

on

th

e I

nte

r-o

rga

niz

atio

na

l pe

rfo

rma

nce

(In

du

stria

l Org

an

iza

tion

)5

. B

usi

ne

ss M

od

els

effic

ien

cy b

ase

d o

n I

T (T

ran

sact

ion

Co

stE

con

om

ics)

6.

Inst

itutio

na

l E

nvi

ron

me

nt

influ

en

ce o

n t

he

im

ple

me

nta

tion

an

dd

eve

lop

me

nt

of

ne

w I

T (

Inst

itutio

na

l Th

eo

ry)

7.

Str

ate

gic

Ne

two

rks

fea

ture

s a

nd

IT

va

lue

ge

ne

ratio

n (

Inte

r-o

rga

niz

atio

na

l Ne

two

rks)

8.

IT,

co

mp

lem

en

tary

re

so

urc

es a

nd

su

sta

ina

ble

co

mp

eti

tive

ad

vata

ng

e (

Re

sou

rce

Ba

sed

Vie

w o

f th

e F

irm

)9

. P

ers

on

al,

cu

ltu

ral

an

d p

rofe

ss

ion

al

fea

ture

s o

f to

pm

an

ag

em

en

t o

n t

he

imp

lem

en

tatio

n a

nd

de

velo

pm

en

t o

f n

ew

IT

(Up

pe

r E

che

lon

)1

0.

Lin

k b

etw

ee

n I

T a

nd

kn

ow

led

ge

ma

na

ge

me

nt

(Kn

ow

led

ge

Ma

na

ge

me

nt)

11

. IT

va

lue

a

pp

rop

ria

tio

n

by

org

an

iza

tio

na

l sta

ke

ho

lde

rs(O

rga

niz

atio

na

l Sta

keh

old

ers

)1

2.

IT a

s a

g

en

era

tin

g f

acto

r o

f n

ew

d

yna

mic

ca

pa

bili

tie

s(D

yna

mic

Ca

pa

bili

ties

Fra

me

wo

rk)

Pro

po

sed

researc

h lin

es:

15

. In

form

ati

on

S

ys

tem

s

str

uc

ture

a

nd

Inst

itutio

na

l le

giti

ma

tion

(In

stiti

on

al T

he

ory

)1

6.

IT a

s a

ge

ne

rati

ng

fa

cto

r o

f S

tra

teg

icN

etw

ork

s. IT

an

d s

tru

ctu

ral

fea

ture

s o

f th

en

etw

ork

(In

ter-

org

an

iza

tion

al N

etw

ork

s F

ocu

s)1

7.

So

cia

l S

yste

ms

an

d I

T in

tera

ctio

n (

So

cia

lS

yste

ms

an

d S

oci

o-t

ech

nic

al S

yste

ms)

Org

aniz

atio

nal N

etw

ork

sP

ers

pect

ive

Fre

em

an

(1

97

9)

Ec

on

om

ic T

he

ory

Co

ntr

ibu

tio

ns

Org

an

iza

tio

na

l a

nd

So

cia

lT

he

ori

es

Co

ntr

ibu

tio

ns

Indust

rial O

rganiz

atio

nR

ob

inso

n (

19

33

)

Popula

tion E

colo

gy

Ha

nn

an

an

d F

ree

ma

n (

19

77

)

e-business

18

. In

tern

et

imp

act

on

th

e o

rga

niz

atio

na

lst

ruct

ure

19

. In

tern

et

imp

at

on

co

-ord

ina

tion

, m

ark

et

an

do

rga

niz

atio

n m

ech

an

ism

s

e-b

usin

ess

21

. D

esc

rip

tion

of

ne

w I

nte

rne

t b

usi

ne

ssm

od

els

Pro

po

sed

researc

h lin

es:

20

. D

esc

rip

tion

of

the

im

pa

ct o

n t

he

fir

mo

f n

ew

IT

21

. In

tern

atio

na

l d

iffe

ren

ces

in a

do

ptio

na

dn

d

ev

elo

pm

en

t o

f In

form

ati

on

Te

ch

no

log

y.

Glo

ba

l In

form

ati

on

Te

chn

olo

gy

Ma

na

ge

me

nt

e-business

13

. S

tra

teg

ic b

usi

ne

ss m

od

els

ba

sed

on

TC

P/I

Pte

chn

olo

gie

s1

4.

De

sig

n o

f In

tern

et

stra

teg

ies

Kn

ow

led

ge

Ma

na

ge

me

nt

Dyn

am

ic C

ap

ab

ilitie

s F

ram

ew

ork

Up

pe

r E

che

lon

Org

an

iza

tion

al

Sta

keh

old

ers

Hu

ma

n R

ela

tion

s

So

cia

l Sys

tem

s F

ocu

sS

oci

o-t

ech

nic

al S

yste

ms

Fo

cus

32