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In this paper, the authors' understanding of IT organizational arrangements in complex firms by focusing on the question of whether to conduct IT activities at the corporate or division level. It argues that co-location of IT resources at the SBU level is contingent on the extent to which IT activities are a critical success factor in the focal industry, the competitive strategy followed by the focal SBU, and the SBU's role within the internal network of cross-unit business synergies. Hypotheses are tested with data from a sample of 85 business units within 25 large diversified industrial firms.
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