On the Relation between Organisational Practices and New Technologies: The Role of (Time-Based) Competition

Abstract

This article studies some aspects of organisation choice while explicitly accounting for the fact that firms compete on the product market. Firms compete by introducing drastic innovations, while organisation choice results from a tradeoff between productive efficiency and reactivity. We show that the adoption of information technologies and the choice of reactive organisations are complements via an industry-level equilibrium effect. This view contrasts with the existing literature which emphasises the existence of similar complementarities at the firm level. Consistently with our model, we find that industry-level, rather than firm-level, diffusion of information technologies explains firms' organisational practices.