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THE IMPACT OF INFORMATION TECHNOLOGY
ON MIDDLE MANAGERS*
Alain Pinsonneault
École des Hautes Commerciales
5255 Decelles
Montréal, Québec
CANADA, H3T 1V6
and
Kenneth L. Kraemer
Graduate School of Management
University of California, Irvine
Irvine, California 92717
February 1993
*This research was supported by grants from the National Science Foundation, Ecole des Hautes
Etudes Commerciales, and the "Regent's Dissertation Fellowship Award" of the University of
California. The authors gratefully acknowledge the helpful comments of John Leslie King, Rob
Kling, Lyman W. Porter, and the Senior Editor, Associate Editor and six anonymous reviewers of
Management Information Systems Quarterly .
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ABSTRACT
This article reviews studies that examine the impact of information technology (IT) on the
number of middle managers in organizations. We find contradictory evidence suggesting,
paradoxically, that IT both increases and decreases the number of the middle managers. We
resolve this "empirical paradox", by looking at the effects of IT on middle managers as
contingent upon the degree of centralization of computing decisions, and of organizational
decisions more broadly. When both computing decisions and organizational decisions are
centralized top managers tend to use IT to reduce the number of middle managers. When these
decisions are decentralized, middle managers use IT to increase their numbers. A recent case
study provides preliminary support for this perspective by showing an interesting case of
reduction in middle managers.
KEYWORDS
Information technology Technological determinism
Impact on middle managers Managerial actionalism
Direct impacts Structurational perspective
Indirect impacts Empirical paradox
Increase/decrease in middle managers Centralization of decision authority
Centralization of IT Information roles
Decision roles Communication roles
Capital-labor substitution Environmental forces
ACM CATEGORIES
J.1, K.4, K.6
mm/misq.mac/3-22-93 1
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THE IMPACT OF INFORMATION TECHNOLOGY
ON MIDDLE MANAGERS*
INTRODUCTION
Production technologies have profoundly affected organizations in general and blue collar
workers in particular. It is commonly argued that information technology (IT) will have similar
profound effects on white collar workers, and on middle managers in particular (Drucker, 1988;
Leavitt and Whisler, 1958). It has been estimated that IT has eliminated almost a third of the
U.S.A. middle management jobs or about two million managers (Byrne, 1988). A reduction of
over 60% of the middle management workforce has been forecasted for the next decade in the
U.S. (Drucker, 1988). In the United Kingdom, recent lay-offs--11,000 at Nat West, 6,000 at
Lloyds, 5,000 at British Telecom, 4,500 at Philips, 4,300 at Barclays, and 1,000 at British
Petroleum--are attributed mainly to IT (Syedain, 1991).
But some researchers believe that, rather than depressing middle management employment, IT
increases it substantially (Gillman, 1966; Pfeffer and Leblebici, 1977). They propose that present
decreases in the number of middle managers are not caused by IT, but by other factors. One is
the transformation of modern organizations from multi-layered, hierarchical, fat ones to
networked, flat, thin ones. Another is greater horizontal centralization (bringing business units
together) and vertical centralization (bringing decision authority to the top of the hierarchy),
taking place in organizations. Still another is organizational downsizing to reduce operating
costs and organizational re-engineering to decrease the time between strategy formation and
implementation. Both are aimed at helping organizations to face adverse environmental
conditions such as economic recession, foreign competition, or industry regulation. In the
process of making these transformations, organizations tend to reduce the managerial workforce,
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particularly middle managers. While not caused by IT, such changes are likely to be facilitated
by IT.
In this article we examine the empirical studies addressing the impact of IT on the number of
middle managers. IT might decrease or increase the number of middle managers. Empirical
studies show that it does both, presenting an empirical paradox wherein the net effect of IT on
middle managers is difficult to determine. In an effort to transform this paradox into a solvable
puzzle, we explore the theory underlying predictions about IT's impact on middle mangers and
identify two dimensions that might help explain the differential impacts found in empirical
studies: the degree of centralization of computing decision authority, and the degree of
centralization of organizational decisions. We present a conceptual framework that integrates
these two dimensions, derives four contingent situations that explain differential impacts, and
illustrates how the results of empirical studies fit with these contingencies A case study provides
preliminary support for the framework.
INFORMATION TECHNOLOGY AND THE NUMBER OF MIDDLE MANAGERS
The following review of empirical studies examines what we know about the impact of IT on the
middle management workforce, and how well we know it. It looks first at studies which show
that IT decreases the number of middle managers, and then at studies which show that IT
increases their numbers.
IT Decreases the Number of Middle Managers
Many writers have predicted that IT will decrease the number of middle managers (Child, 1984;
Drucker, 1988; Leavitt and Whisler, 1958; Malone, Yates and Benjamin, 1987; Whisler, 1965).
The rationale for this prediction is that middle managers have mostly provided an informational