This study empirically develops a taxonomy that has implications
for matching information technology (IT) and organizational structures.
The taxonomy of IT structure is based on the degree of centralization
of computer processing, capability to support communications,
and the ability to share resources. By using a multistep cluster
analysis, both the membership and number of groups are derived
from the responses of 313 firms. Four IT structures are identified:
centralized (centralized processing, low communication, low sharing),
decentralized (decentralized processing, low communication, low
sharing), centralized cooperative (centralized processing, high
communication, high sharing), and distributed cooperative computing
(decentralized processing, high communication, high sharing).
Centralized computing is related to functional organizational
forms with low integration and centralized decision making. Decentralized
computing is related to product organizational forms with decentralized
decision making. Centralized cooperative computing is related
to functional organizational forms with high integration. Distributed
cooperative computing is related to both matrix and product organizational
forms with high integration. The ability to identify and understand
the implications of IT structure is of critical importance to
both academic and management practitioners.
Key words and phrases: information technology structure , organizational decision-making structure , organizational integration , organizational structure , taxonomy