The Role of Information Technology Organizational Design in Firms' Ability to Innovate

• Main Author: Halimi, Hassan S.
• Format: Others
• Language: en
• Published: ScholarWorks 2015
• Subjects: Business Value of IT; Communication Structures; Dynamic Capabilities; Knowledge Creation; Organizational Design; Databases and Information Systems; Organizational Behavior and Theory
• Online Access: https://scholarworks.waldenu.edu/dissertations/1382; https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=2381&context=dissertations

Information technology (IT) organizations have become an integral part of many firms, with increasing strategic significance. Consequently, investments in IT represent a significant percentage of a firm's expenditure. Despite the investment, the business value of IT has been difficult to quantify, creating uncertainty about a firm's investments in IT innovation. The purpose of this nonexperimental study was to examine relationships between a firm's innovativeness and 3 IT organizational design factors: knowledge creation, dynamic capabilities, and communication structures. The research questions addressed the relationships between a firm's ability to innovate and specific design elements of the IT organization. The study was based on Nonaka's dynamic theory of organizational knowledge creation, Schumpeter's industrial market structure, and Wernerfelt's resource-based view of the firm. Data were collected from an online survey with 115 employees of firms that depend on IT to deliver their products or services. Pearson product-moment correlational analysis revealed statistically significant relationships between the IT organizational design factors and a firm's ability to innovate. The implications for positive social change stemming from this study affect managers of firms that rely on IT to deliver products or services. The findings suggest that the design of the IT organization influences the performance of the firm through cost reduction and its sustainability through innovation, both of which lead to community economic empowerment thus benefiting the general public.