Combining Technology and Work Organization: An Analysis of Complementarity between IT and Decentralization across Firms of Different Size

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Combining Technology and Work Organization: An Analysis of Complementarity between IT and Decentralization across Firms of Different SizeFabienne Rasel * September 2014Abstract This paper examines whether information technology (IT) and decentralized work organization are complementary only for large firms or also for smaller firms.Empirical evidence, which suggests complementarity between IT and decentralization, is mainly based on large firms. Using data from a sample of 3292 SMEs and of 598 larger firms from the manufacturing and service sector in Germany, I can observe firms' IT intensity in terms of enterprise software and computer use and whether firms have a decentralized work organization. I find that SMEs with decentralized work practices tend to use IT more intensively. Moreover, for the sample of SMEs, IT and decentralized work organization are individually associated with higher productivity but the combination of IT and decentralization does not yield a productivity premium. Contrarily, for the sample of larger firms, the results show that the productivity of IT depends positively on decentralization. The findings suggest that combining IT and decentralized work organization seems to be a successful strategy only for larger firms.

Innovations, ICT and ICT‐driven labour productivity in Poland

“…In our study, the technological frontier is defined as the distance to the median productivity level of companies. 23 Such an approach was also used by Rasel (2014) and Bloom et al (2012).…”

The effect of information technology on IT-facilitated coordination, IT-facilitated autonomy, and decision-makings at the individual level

“…Overall, extant literature (e.g. Hitt and Brynjolfsson 1997;Heim and Peng 2010;Tambe, Hitt, and Brynjolfsson 2012;Rasel 2014) found that IT use on the job has a significant, positive impact on the level of autonomy. In this current study, thus we posit that:…”