Middle Management Downsizing: An Empirical Investigation of the Impact of Information Technology

Abstract

Nearly all Fortune 1000 firms claim to have downsized since the early eighties, and it is argued that information technology (IT) is responsible for this massive downsizing. However, earlier research has indicated that IT increases middle management. Even though the impact of IT on the middle management workforce has been studied for the last thirty years, research has failed to clearly explain this phenomenon. Quite the opposite, research has fueled controversy and has provided inconsistent findings. This article addresses the state of inconsistent findings across multiple studies by examining the impact of information technology on the number of middle managers using two additional variables: the degree of centralization of organizational decision authority and the degree of centralization of computing decision authority. One hundred and fifty-five city governments were surveyed. Information technology was found to be both positively and negatively associated with the size of the middle management workforce. The impact of information technology was fundamentally determined by who controlled computing decisions and what interests were being served, and by the roles of middle managers. Information technology was associated with a decrease in the size of the middle management workforce in organizations with centralized decision authority and with an increase in the number of middle managers in organizations where decision authority was decentralized.