The influence of information technology and organizational improvement efforts on the performance of firms

The relationship between firm investment in information technology (IT) and productivity improvement has been a topic of research for the past several decades. While early studies provide mixed evidence of a positive link, more recent work consistently indicates that IT investment significantly benefits a firm's overall performance. Building upon this knowledge, researchers have shifted their attention to the identification of how IT affects performance. Only through an in-depth understanding of the components of value generation can researchers provide the information necessary for profit maximizing IT investment decisions.; A line of inquiry is this research stream is the identification of organizational factors that complement IT. These factors take advantage of IT's characteristics and when combined with IT, make positive contributions to firm performance. Unfortunately, research in this area is limited and many organizational practices used within Fortune 1000 firms have yet to be examined in this vein.; In this thesis, we help to close this knowledge gap by investigating three sets of organizational work practices use extensively by Fortune 1000 firms; Employee Involvement, Total Quality Management, and Reengineenng. We examine information technology and these organization improvement efforts to determine if a complementary relationship exists between these factors. In addition, we investigate whether or not a coordinated adoption of these investments has a significant affect on firm performance.; Our results indicate that IT is a key enabler of the organizational work practices of employee involvement and TQM. In addition, when combined with IT, these two organizational improvement efforts positively contribute to the performance of firms. The results are consistent to economic and financial outcome measures; situations where these two efforts are implemented as one coordinated program; and are especially strong for firms in the manufacturing sector. Reengineenng, on the other hand, does not demonstrate a significant relationship with IT, nor do we find any evidence that the use of IT and reengineering significantly impacts firms. Nonetheless, our results demonstrate that organizational practices can complement investments in IT and if chosen appropriately, a integrated application of organizational practices and IT can positively contribute to a firm's overall performance.