Impact of IT-enabled organizational change on firm performance : an event study

Abstract

Past event-studies on the impact of Information Technology (IT) on organizations have focused on the different types of IT initiatives from various perspectives, for e.g., an organizational perspective (joint venture, outsourcing, appointment of Chief Information Officer), type of business model (828, B2C), comparisons of returns between conventional and e-business firms and between initiatives involving digital and tangible goods. This thesis however, focuses on how industry structure can influence the firm's performance and the value created for shareholders via IT initiatives. It will study how organizational structure and management changes enabled by IT influence the performance of firms. Current literature suggests that the potential impact of such organizational structure and management changes on future firm performance has not been fully explored. The results of the study show that industry structure does affect the variance in firm performance and certain organizational structure changes resulting from the IT initiative such as management change and creation of a new IT group can generate higher reliability and value of the firm's future performance.