The Impact Of Information Technology On Firm’s Vertical Boundaries

With the rapid development of science and technology, in the context of global economic integration, the information technology is emerging constantly. And then the external environment faced by enterprises has undergone great changes. Based on a static transaction cost theory to study the corporate boundary, the traditional theory has significantly shown insufficient of the explanatory power in a changing environment. Therefore, this subject research will undoubtedly have important theoretical and practical significance, which, on the basis of transaction cost theory and firm capacity theory, further study has an impact of information technology on the vertical boundaries of the enterprise.On the basis of existing research results, this paper divides information technology into IT resource and IT competence by using of the Bharadwaj’s innovative classification. Based on transaction cost theory, IT resource can decrease the cost of external transaction cost by reducing the transaction process of assets specificity, information asymmetry and opportunistic behavior, eventually making enterprise scale boundary. And based on capacity theory of enterprises, IT competence contributes to the ability of the organizational learning and knowledge accumulation, eventually enhancing the core competitiveness. So the enterprise internal organization structure will further expand. In addition, this article also introduces the external environment as regulating variable in order to explore the mechanism. After a detail literature review, the theoretical assumptions of this paper are proposed. With the sample data of enterprises in South China collected through the questionnaire and analyzed through reliability analysis, validity analysis and principal component analysis, this paper uses the principal component analysis, correlation analysis, regression analysis and so on to be an empirical test on theoretical assumptions. The basic conclusion of this paper can be drawn: first, IT resource plays a promoting role on the firm boundary downsizing; second, IT competence plays a promoting role on the firm boundary expansion; third, the volatility and the complexity of the environment on IT resource and firm boundary plays a positive regulatory role, so that the relationship between the two is more strongly; four, the volatility and the complexity of the environment on IT competence and firm boundary plays a negative regulatory role, so that the relationship between the two is less strongly.