Information technology, strategic decision making approaches and organizational performance in different industrial settings

The present study considers potential performance effects associated with the communication enhancing capacity of information technology. Enhancement of an organization's communication capabilities may influence performance through improved strategic decision making, better coordination of strategic actions and by facilitating learning from strategic initiatives. Accordingly, the paper investigates the effects of internal communication through use of computer networks, Intranet, and external communication via the Internet in association with autonomous and participatory strategic decision making approaches and strategic planning. These relationships are tested in two different industrial settings characterized by low and high levels of dynamism and complexity to assess possible environmental contingencies. In less dynamic and complex industries, the results show a positive association between Intranet use and innovation, while Internet use has a positive association to profitability and to innovation in organizations adhering to a participatory decision approach. In more dynamic and complex industries, Intranet use combined with an autonomous decision approach is associated with high profitability and salts growth, while Internet use combined with participatory decision making is associated with higher innovation. Hence, the study finds evidence that innovation relates to use of the Internet and participation across industries, and that economic efficiency relates to use of Intranet and autonomy in dynamic and complex industries. (C) 2001 Elsevier Science B.V. All rights reserved.