How Does Internal Communication Technology Affect Internal Information: Theory and Evidence

69 Pages Posted: 16 Dec 2022 Last revised: 19 Sep 2023

See all articles by Ehsan Azarmsa

Ehsan Azarmsa

University of Illinois Chicago, College of Business Administration

Lisa Yao Liu

Columbia Business School

Suzie Noh

Stanford Graduate School of Business

Date Written: September 17, 2023

Abstract

How does improved internal communication technology affect internal information? By developing a model with a headquarters manager and several divisional managers, we formalize two competing economic forces—information learning and free riding—that shape the headquarters manager’s information precision. While the technology helps the headquarters manager collect information from more divisional managers, it reduces divisional managers’ incentives to acquire information, as they anticipate others will do so. We empirically present inverted-U relations and provide supporting evidence for these economic forces. Collectively, our research provides novel and nuanced insights into how advanced communication technologies impact organizations’ internal information production.

Keywords: organizational communication, information technology, communication technology, internal information environment

JEL Classification: D80, D83, L20, M15, M21, M41

Suggested Citation

Azarmsa, Ehsan and Liu, Lisa Yao and Noh, Suzie, How Does Internal Communication Technology Affect Internal Information: Theory and Evidence (September 17, 2023). Columbia Business School Research Paper , Stanford University Graduate School of Business Research Paper No. 4292147, Available at SSRN: https://ssrn.com/abstract=4292147 or http://dx.doi.org/10.2139/ssrn.4292147

Ehsan Azarmsa

University of Illinois Chicago, College of Business Administration ( email )

University Hall, 601 S Morgan St
Chicago, IL 60654
United States
3122567183 (Phone)

Lisa Yao Liu (Contact Author)

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Suzie Noh

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

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