Industry turbulence and information technology structure: an empirical investigation

Examines ‐ in a study involving 92 large publicly‐held organizations ‐ the relationships between information technology (IT) structure, control and industry turbulence. Notes that despite the fact that some have called centralized systems electronic dinosaurs, many companies are turning to this traditional approach because it does offer one thing that decentralized systems generally lack, namely, control. Cites results indicating that information technology structure (centralized versus decentralized) is strongly related to management equity ownership, concentration of stock holdings, and the level of turbulence which firms face. Notes, for example, that an organization where top executives and managers own a relatively high percentage of the company’s stock possesses a more centralized IT structure than an organization with a relatively lower percentage of management ownership. Points out that this means that user departments in the latter have more control over their IT functions than do users in the former, but that, on the other hand, companies with high levels of stock concentration have more decentralized IT structures. In addition, concludes that the research revealed a statistically positive significant relationship between the level of turbulence firms face and the degree of IT centralization.