Synergism between information technology and organizational structure: a managerial perspective

Abstract

This paper presents a hybrid organizational structure chosen by a corporation as a means to combine the benefits of centralization and decentralization. The hybrid structure is the result of a restructuring effort by a coal company in Kentucky under the directive of its parent corporation to ensure maximum resource utilization within a more streamlined organizational structure. Through an observation of the restructuring process, we are able to demonstrate how and why it is important for top-level managers to understand and make the best use of the intricate synergism between information technology and organizational structure. The strategic implications of a hybrid structure and the roles of information technology in organizational changes are explored. We argue that a hybrid structure is a viable and strategically valuable structural alternative, especially for highly diversified conglomerates that grow through mergers and acquisitions of other companies.