The Distinct Effects Of Information Technology And Communication Technology On Firm Organization

Empirical studies on information communication technologies (ICT) typically aggregate the information and communication components together. The authors show theoretically and empirically that this is problematic. Information and communication technologies have very different effects on the decisions taken at each level of an organization. Better information access pushes decisions down, as it allows for superior decentralized decision making without an undue cognitive burden on those lower in the hierarchy. Better communication pushes decisions up, as it allows employees to rely on those above them in the hierarchy to make decisions.