Information Technology and Restructuring in Public Organizations: Does Adoption of Information Technology Affect Organizational Structures, Communications, and Decision Making?

It has been argued that the adoption and use of information technology (IT) in organizations affects its structure. Few studies extend this analysis to examine whether such restructuring, if it in fact occurs, improves the performance of the organization. It is even more rare for these assertions to be examined in the context of public organizations. We use data from a survey of program managers who work in county-level public agencies to explore whether restructuring occurs after information technology implementation; whether such restructuring affects the performance of these agencies; and what the nature is of the relationship between structure, performance, and managers' attitudes toward IT. We find that IT adoption has little impact on an agency's structure, and restructuring has only very minimal effects on performance. IT adoption, however, has a direct effect on performance. Managers' support for IT has some direct influence on organizational performance after IT implementation, but both restructuring and changes that occur in performance as a result of IT implementation have an effect on managers' support for IT. J-PART 10(2000):4:801-830 The relationship between organizational structure and information technology (IT) has long been of interest to researchers. Opinions vary as to how IT affects organizational structure. It is often supposed that IT creates a flatter organizational profile by reducing the number of managers in an organization and that it may also affect decision making by increasing the number of decision makers through improved communication channels. It has also been suggested that flatter organizational structures are not actually caused by the use of IT; rather, IT facilitates such 801/Journal of Public Administration Research and Theory This content downloaded from 157.55.39.55 on Tue, 23 Aug 2016 04:31:19 UTC All use subject to http://about.jstor.org/terms Information Technology in Public Organizations changes (Pinsonneault and Kraemer 1993). These questions about structure become of great importance when we assess to what extent changes caused or facilitated by IT affect the performance of the organization. The consequences of restructuring on performance have been explored to a lesser degree than have the effects of IT on structure. Most of the existing research that does explore IT structure and performance generally examines these relationships in private organizations. IT implementation is, however, ongoing in the public sector at all levels of government (Caudle, Gorr, and Newcomer 1991). Indeed, it has been suggested that public agencies are more information intense than are private organizations, in part resulting in a deeper penetration of computer technology for each advance in IT (Bretschneider and Wittmer 1993). These differences in IT implementation between public and private organizations suggest that IT affects public agencies and private firms in different ways. The difference in the depth of IT penetration is not the only distinction between private firms and government organizations but may be viewed as part of a broader research stream focused on understanding the differences in public and private organizations. These organizations differ on environmental, organizational, and individual levels. Public agencies tend to be more strongly influenced by the political rather than the economic environment. This environment imposes short time frames on work, strong accountability measures, and tasks that are undertaken in the light of public scrutiny (Bozeman and Bretschneider 1986). Public organizations tend to have more rigid hierarchies and structures, and more red tape exists, particularly in the area of personnel systems (Bretschneider 1993; Rainey, Pandey, and Bozeman 1995; Rainey, Facer, and Bozeman 1995). Public managers are less likely to react to performance incentives such as job security, pay, and promotion. Private managers report stronger identification with their organizations and higher satisfaction with their coworkers than do their government counterparts. Overall, public employees are more likely to be motivated by service than by financial considerations (Buchanan 1974 and 1975; Rainey 1979 and 1983; J.Q. Wilson 1989). When we study the important questions regarding IT implementation, restructuring, and organizational performance, we must distinguish research about public organizations from that about private organizations. The differences between the sectors and their organizations, and the deeper penetration of IT in the public sector, imply that restructuring due to IT implementation 802/J-PART, October 2000 This content downloaded from 157.55.39.55 on Tue, 23 Aug 2016 04:31:19 UTC All use subject to http://about.jstor.org/terms Information Technology in Public Organizations and the resultant impacts on performance will be different in the two sectors. Results found in private organizations may not be found in public agencies.1 When we discuss public organizations we cannot assume that any restructuring that may occur as a result of IT implementation is beneficial to performance. Changes in structures may be retained even if they do not improve performance, for they may have been implemented for purposes other than organizational outcomes or output. These purposes may, for example, include a political need to trim a public bureaucracy that is perceived to be bloated. It is therefore particularly important in public organizations to examine the relationship between IT implementation, organizational restructuring, and performance.