Does Organizational Structure influence IT investment and its effects on Operational Capability?

Taeuk Kang; Hui-Chuan Chen; Jonghak Sun

Taeuk Kang The University of Tennessee at Martin
Hui-Chuan Chen The University of Tennessee at Martin
Jonghak Sun Weber State University

Keywords: IT Investmenet, IT Capability, Operational Capability, Organizational Structure

Abstract

The effects of IT (Information Technology) have been examined extensively through various theoretical foundations and distinct disciplines. Most of these studies suggest that IS (Information Systems) plays a critical role in operational activities and performance, whereas IT facilitates a firm’s capability to deal with large amounts of information within and between organizations. It has been widely believed that IT enables an organization to improve its information capability, which in turn, enhances its operational efficiency and effectiveness. Prior research has assessed the effects of IT on operational performance. In order to provide an overview of how IT effects improve operational performance, we reviewed prior studies within the field of operations management including organizational factors such as organizational structure (centralization vs. decentralization) and business process. However, few studies have focused on the role of organizational structure in the relationship between IT investment and operational performance. Since organizational structure has been recognized as one of the key factors affecting operational improvement, this present research seeks to explore how organizational structure influences the relationship of IT investment on operational performance throughout IT capability at the organizational level.

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Author Biographies

Taeuk Kang, The University of Tennessee at Martin

Department of Management, Marketing, Information Systems

Assistant Professor

Hui-Chuan Chen, The University of Tennessee at Martin

Department of Management, Marketing, Information Systems

Assistant Professor

Jonghak Sun, Weber State University

Department of Business Administration

Visiting Scholar

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