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The Impact of IT on Firm Boundaries and Structure
Keywords: Information Technology, Firm Organization, Firm Boundaries, Firm Structure
Abstract: Innovations in information technology have led to the restructuring of myriad industries including dramatic changes in the structure of firms, both large and small. In the face of such innovations, managers must make decisions regarding the activities the firm will insource vs. outsource (i.e., the firm boundary question), and the way activities will be organized internally (i.e., the firm structure question). The extant literature has, however, considered these two decisions separately. I present a simple, integrated framework to address firm boundary and structure decisions. The framework also allows examination of the impact of IT on firm boundary and structure decisions.