Background information “The Impact of Information Systems on Organizations and Markets”

This article examines the impact of information technology on two attributes of firms–firm size and the allocation of decision rights among the various actors in a firm.

The conclusion is  1) a firm may use information systems to decentralize some decision rights and to centralize others, exploiting the merits of both systems and leading to a hybrid structure. 2) when IT plays a significant role in reducing internal coordination costs, a firm may find it advantageous to grow horizontally and vertically. A firm’s use of IT can result in an increase or decrease in either the horizontal or vertical dimension of firm size.