Information Technology Application Enterprise Boundary Effect Of Research

Information technology in the modern enterprise management has beenincreasingly widely used since the1950s, especially in the late of1980s, the Internetand network technology development and wide application. Large-scale applicationof information technology can create new efficiencies and opportunities to reducetransaction and coordination costs, thereby affecting the organizational structurechange. Changes in organizational structure are important manifestation of verticalboundary ones.Internal and external environment and cost determinants Enterprise verticalboundaries, both of which are information technology affects. When thedeterminants of affecting the cost of information technology, some intermediatevariables play a regulatory role, these variables include the external environment inwhich enterprises, business life cycle stage of the industry, organizational structureand information processing characteristics. Regulations in these variables, theinformation technology have produced different effects and results in these twoaspects, vertical boundaries in reality business show different changes in direction.For high-tech enterprises, the industry life cycle stage, the industry environment,information processing characteristics, organizational structure, application ofinformation technology saves a lot of external costs, companies can use the marketto broader economic activities and reduce business vertical boundaries in reality.This paper collected www.hexun.com and Xenophon Database from2006to2010during the period of41listed companies in the information technology industrydata. From the application of information technology affect the angle of the verticalboundaries of information technology and business vertical boundary (the level ofvertical integration) relationship to do a more detailed study. Empirical results showthat in the information technology industry, the negative relationship exists betweeninvestment in information technology and enterprise vertical boundary. Duringfurther analysis, we conclude that in the high-tech industry early application ofinformation technology will reduce the vertical border business, but the verticalborders will expand after a period of time.