Information systems and the organization of modern enterprise

This article and the entire special issue address relationships between information systems and changes in the organization of modern enterprise, both within and across firms. The emerging organizational paradigm involves complementary changes in multiple dimensions. The revolution in information systems merits special attention as both cause and effect of the organizational transformation. This can be illustrated by considering two key variables: location of information and location of decision rights in organizations. Depending on the costs of information transmission and processing, either the “MIS solution”; of transferring information or the “organizational redesign solution”; of moving decision rights can be an effective approach toward achieving the necessary collocation of information and decision rights. When information systems change radically, one cannot expect the optimal organizational structure to be unaffected. Considering the interplay among information, incentives, and decision rights in a unified fashion leads to new insights and better organizational planning. The articles in this special issue address different facets of this interaction. Despite significant progress, our understanding of the economic role of information systems in organizations remains in its infancy. Successful design of modern enterprise will require additional narrowing of the historic gap between research in information systems and research in economics.