Week 12 Reading Summary (HK)

Bloom, N., Garicano, L., Sadun, R., & Van Reenen, J. (2014). The distinct effects of information technology and communication technology on firm organization. Management Science, 60(12), 2859-2885.

Information Communication Technologies (ICTs) have radically impacted industries and the roles of various employees. However, this impact has not been uniform across industries, positions, etc. For example, ICTs have rendered Ambassadors mute because technology now makes it relatively easy to be in contact with the actual country leaders regardless of geographic distance. On the other hand, nurses’ responsibilities and capabilities have grown immensely due to ICTs as it allows them to be able to accomplish tasks previously requiring doctors or superiors. Bloom, Caricano, Sadun, and Van Reenen (2014) propose that the differing impact of ICTs could be due to its dual-component nature; effectively, due to differences in information technologies (ITs) and communication technologies (CTs).

ITs allow employees at lower levels to make impactful decisions, such as the case with nurses, due to the increase in information readily available to them. Effectively, ITs, specifically ERPs for non-product related decisions and CAD/CAM for product decisions, allow lower level employees to gain access to information traditionally only available to high level employees at little to no costs. Furthermore, these technologies widen the manager’s span of control. On the other hand, CTs, such as intranets, lead to more centralization as it is easier to communicate and in theory could render more decisions or more verifications to higher level employees. That being said, results considering CTs are more ambiguous than those for the ITs. Overall, Bloom et al. (2014) were able to draw these conclusions by combining the CEP management and organization survey and the Harte-Hanks ICT panel to create a comprehensive dataset that spanned industries and countries. Overall, these findings help to explain the contradictory impacts of ICTs by highlighting the distinct components of ITs and CTs and their differing impacts.