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Dissertation Information for Erik Brynjolfsson

NAME:
- Erik Brynjolfsson

DEGREE:
- Ph.D.

DISCIPLINE:
- Management

SCHOOL:
- Massachusetts Institute of Technology (USA) (1990)

ADVISORS:
- None

COMMITTEE MEMBERS:
- None

MPACT Status: Incomplete - Not_Inspected

Title: Information technology and the re-organization of work: Theory and evidence

Abstract: This thesis consists of three essays on the impact of information technology on organizational structure. The essays are self-contained and can be read independently, but they also build-on and reinforce one another.

The first essay examines the relationship between information technology capital and firm size using industry data for the entire U.S. economy. Results indicate that increases in information technology are associated with significant decreases in firm size and vertical integration. Effects are most pronounced after a lag of two years, and are robust to a variety of specifications. Evidence suggests that information technology is associated with a shift from hierarchies to markets for coordinating economic activity.

The second essay models the "new managerial work", which features a reliance on delegated decision-making and performance pay, as an optimal organizational response to advances in information technology. Technology has automated many routine tasks while accentuating the "information explosion" that increasingly overwhelms top management. The model predicts an increase in decentralization and performance pay in two steps. (1) The growth of inexpensive, but economically valuable information both enables and necessitates the decentralization of organizational information processing and decision-making, and (2) effective use of distributed information processing requires that employees face more outcome-based incentives and fewer rewards based on pre-specified behavior.

The third essay extends the results of the second to explain declines in firm size and vertical integration. When information technology leads to an increase in the use of outcome-based incentives, agents will be more likely to independently own the assets they use, thereby leading to the deintegration of large firms. This approach also makes it possible to examine the role of information in a variety of organizational forms and determine when (1) informed workers are more likely to own their own firms, (2) increased flexibility of assets will facilitate decentralization, and (3) the need for centralized coordination will lead to centralized ownership.

MPACT Scores for Erik Brynjolfsson

A = 1
C = 0
A+C = 1
T = 2
G = 2
W = 1
TD = 1.5
TA = 1
calculated 2010-10-02 00:11:51

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