The influence of IT sophistication on strengthening organizational structure, performance, and adaptability

Abstract

In organizational theory research, the connection between the use of IT within organizations and its influence on organizational structure has been a long-standing area of interest. However, with technology evolving at a rapid pace, it is crucial to revisit and reassess these established relationships, particularly in terms of their impact on organizational performance. Moreover, this topic has been rarely explored in the Indian context. To address this gap, an empirical study was conducted among employees from various Indian organizations, using a comprehensive tool to measure IT sophistication, organizational performance, adaptability, and structural characteristics. The findings revealed that IT sophistication is positively correlated with both performance and adaptability. Among structural characteristics, centralization showed a negative correlation with IT sophistication, while participation showed a positive correlation. Additionally, the relationship between IT sophistication and organizational structure was stronger in high-performing businesses compared to low-performing ones. Differences also emerged between sectors: service sector firms became more informal as IT sophistication increased, and the correlation with performance was higher in service firms than in manufacturing firms.