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Middle Management Downsizing: An Empirical Investigation of the Impact of Information Technology

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  • Alain Pinsonneault

    (École des Hautes Études Commerciales, IT Department, Montréal, Québec, Canada H3T 2A7)

  • Kenneth L. Kraemer

    (Graduate School of Management, Center for Research on Information Technology and Organizations, University of California, Irvine, California 92694-4650)

Abstract

Nearly all Fortune 1000 firms claim to have downsized since the early eighties, and it is argued that information technology (IT) is responsible for this massive downsizing. However, earlier research has indicated that IT increases middle management. Even though the impact of IT on the middle management workforce has been studied for the last thirty years, research has failed to clearly explain this phenomenon. Quite the opposite, research has fueled controversy and has provided inconsistent findings. This article addresses the state of inconsistent findings across multiple studies by examining the impact of information technology on the number of middle managers using two additional variables: the degree of centralization of organizational decision authority and the degree of centralization of computing decision authority. One hundred and fifty-five city governments were surveyed. Information technology was found to be both positively and negatively associated with the size of the middle management workforce. The impact of information technology was fundamentally determined by who controlled computing decisions and what interests were being served, and by the roles of middle managers. Information technology was associated with a decrease in the size of the middle management workforce in organizations with centralized decision authority and with an increase in the number of middle managers in organizations where decision authority was decentralized.

Suggested Citation

  • Alain Pinsonneault & Kenneth L. Kraemer, 1997. "Middle Management Downsizing: An Empirical Investigation of the Impact of Information Technology," Management Science, INFORMS, vol. 43(5), pages 659-679, May.
    • Handle: RePEc:inm:ormnsc:v:43:y:1997:i:5:p:659-679
    DOI: 10.1287/mnsc.43.5.659
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    Cited by:

    1. Swen Nadkarni & Reinhard Prügl, 2021. "Digital transformation: a review, synthesis and opportunities for future research," Management Review Quarterly, Springer, vol. 71(2), pages 233-341, April.
    2. Marie Boitier, 2002. "L'Influence Des Technologies De L'Information Et De La Communication Sur La Fonction Controle De Gestion. Une Analyse Socio-Technique," Post-Print halshs-00584446, HAL.
    3. Goldsby, Curtis M. & Hanisch, Marvin, 2023. "Agency in the algorithmic age: The mechanisms and structures of blockchain-based organizing," Journal of Business Research, Elsevier, vol. 168(C).
    4. Henri Barki & Alain Pinsonneault, 2005. "A Model of Organizational Integration, Implementation Effort, and Performance," Organization Science, INFORMS, vol. 16(2), pages 165-179, April.
    5. Terence J. V. Saldanha & Dongwon Lee & Sunil Mithas, 2020. "Aligning Information Technology and Business: The Differential Effects of Alignment During Investment Planning, Delivery, and Change," Information Systems Research, INFORMS, vol. 31(4), pages 1260-1281, December.
    6. Alain Pinsonneault & Kenneth L. Kraemer, 2002. "Exploring the Role of Information Technology in Organizational Downsizing: A Tale of Two American Cities," Organization Science, INFORMS, vol. 13(2), pages 191-208, April.
    7. Raghuram G. Rajan & Julie Wulf, 2006. "The Flattening Firm: Evidence from Panel Data on the Changing Nature of Corporate Hierarchies," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 759-773, November.
    8. B. Kriechel & G. A. Pfann, 2013. "Workforce reorganization and the worker," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1719-1729, May.
    9. Jonghak Sun, 2017. "The effect of information technology on IT-facilitated coordination, IT-facilitated autonomy, and decision-makings at the individual level," Applied Economics, Taylor & Francis Journals, vol. 49(2), pages 138-155, January.
    10. Brown, Susan A. & Venkatesh, Viswanath & Kuruzovich, Jason & Massey, Anne P., 2008. "Expectation confirmation: An examination of three competing models," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(1), pages 52-66, January.
    11. Brad N. Greenwood & Kartik K. Ganju & Corey M. Angst, 2019. "How Does the Implementation of Enterprise Information Systems Affect a Professional’s Mobility? An Empirical Study," Information Systems Research, INFORMS, vol. 30(2), pages 563-594, June.
    12. Daniel Robey & Marie-Claude Boudreau, 1999. "Accounting for the Contradictory Organizational Consequences of Information Technology: Theoretical Directions and Methodological Implications," Information Systems Research, INFORMS, vol. 10(2), pages 167-185, June.
    13. Sunghun Chung & Animesh Animesh & Kunsoo Han & Alain Pinsonneault, 2020. "Financial Returns to Firms’ Communication Actions on Firm-Initiated Social Media: Evidence from Facebook Business Pages," Information Systems Research, INFORMS, vol. 31(1), pages 258-285, March.
    14. Carmen Galve Gorriz & Ana Gargallo Castel, 2004. "Impacto de las tecnolog�as de la informaci�n en la productividad de las empresas espa�olas," Documentos de Trabajo dt2004-05, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    15. Cornelia NOVAC-UDUDEC & Cristina ENACHE & Corina SBUGHEA, 2011. "The IT Impact on the Productivity and the Organizational Performance of Firms in Romania. A model of Empirical Analysis," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 177-183.
    16. Westling, Tatu, 2012. "Managerial spans, industry tasks and ICT: evidence from the U.S," MPRA Paper 39403, University Library of Munich, Germany.
    17. Razali Bin Mat, 2012. "Human Resource Management (HRM) and Information Technology (IT): Some Empirical Evidences in the Context of Saudi Arabia," Journal of Education and Vocational Research, AMH International, vol. 3(1), pages 28-34.
    18. M. Martin Boyer, 2004. "On the Use of Hierarchies to Complete Contracts when Players Have Limited Abilities," CIRANO Working Papers 2004s-41, CIRANO.
    19. Kun Shin Im & Varun Grover & James T. C. Teng, 2013. "Research Note---Do Large Firms Become Smaller by Using Information Technology?," Information Systems Research, INFORMS, vol. 24(2), pages 470-491, June.

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