Previous literature on IT and productivity does not take into account different
organizational goals and different management strategies for achieving these goals. But
productivity and ROI relationships can easily differ as organizational goals and
management strategies differ. Therefore, we argue, it is no longer appropriate to ask,
"Does IT lead to productivity enhancement." or "Is the ROI on IT investments large or
small or nonexistent? The better question is under what conditions of organizational
climate and management choice does IT enhanced productivity result.
To illustrate the powerful effect of organizational goals and management strategy
on IT-productivity relationships, we examine the twenty year history of two of the largest
IT users in the world: the Internal Revenue Service and the Social Security
Administration. And we find that these two very similar agencies experienced very
different results from massive investments in IT despite sharing a similar production
function. There is nothing in micro economics however to explain the different strategies
pursed by these managers. Instead we must turn to political and sociological models of
organizations to understand the social construction of productivity results.Information Systems Working Papers Serie