The Effect of Organizational Innovation and Information and Communications Technology on Firm Performance
This paper examines the issue of whether investment in information and communication technology (ICT), combined with organizational changes and worker skills contribute to better performance in Canadian firms. We find that Canadian firms have actively engaged in organizational changes in the area...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Centre for the Study of Living Standards
2004-09-01
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| Series: | International Productivity Monitor |
| Subjects: | |
| Online Access: | http://www.csls.ca/ipm/9/gera_gu-e.pdf |
| Summary: | This paper examines the issue of whether investment in information and communication
technology (ICT), combined with organizational changes and worker skills contribute to
better performance in Canadian firms. We find that Canadian firms have actively
engaged in organizational changes in the areas of production and efficiency practices,
human resource management (HRM) practices, and product/service quality-related
practices. These practices along with ICT use are found to be related to better firm
performance. We find that while ICT is productive on its own, it is more productive in
firms that combine high levels of ICT with high levels of organizational change. The
firms that combine ICT with organizational changes have a high incidence of
productivity improvement and have high rates of innovation. These findings seem to
suggest that to be successful, firms typically need to adopt ICT as part of a “system” or
“cluster” of mutually-reinforcing organizational approaches. We also find that ICT and
human capital are complements in the service sectors. The firms that combine high levels
of ICT and high levels of worker skills have better firm performance |
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| ISSN: | 1492-9759 1492-9767 |