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A Study of Information Technology Structure: Firm Ownership and Managerial Characteristics

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Abstract:

Seeks to isolate those intra-organizational factors affecting the information technology (IT) structure of the firm. Analyses this phenomenon from two management perspectives: the agency and governance perspective on the one hand, and the management characteristics perspective on the other. Using a sample of 72 large organizations, empirical results indicate that information technology structure (centralized versus decentralized) is strongly related to management equity ownership, to concentration of stock holding and to the age of the CEO. For example, an organization where top executives and managers own a relatively high percentage of the company's stock, possesses a more centralized information technology structure than an organization with a relatively lower percentage of management ownership. This means that user departments in the latter have more control over their IT functions than users in the former. On the other hand, companies with a high level of stock concentration have a more decentralized IT structure. The research also revealed a statistically significant relationship between a company's equity-to-debt ratio and the age of the CEO on the one hand, and the level of IT centralization on the other.

Keywords: Centralization; Information Technology; Management; Organizational Structure

Document Type: Research Article

DOI: https://doi.org/10.1108/09685229410072591

Publication date: 1994-05-01

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