The Strategic Impact Of Environmental Uncertainty And Information Systems Design

Abstract

For most of this century, strategic planning has been a three-to-five year organizational ritual of measuring the current position of the firm and determining where the firm should go in the future within the context of perceived environmental uncertainty (PEU). It has long been assumed that PEU impacts the strategic choices that drive or-ganizational structure, including information systems design. However, technology has blurred the delineation between strategy and structure, and how organizations deal with PEU. The convergence of these elements has resulted in these causal relationships be-ing questioned and re-examined. Recent research indicates that information systems play such an important role in today's organizations that they may impact the strategy that an organization pursues. This study surveys and examines 148 firms operating in ninety-two different industries. The results indicate that PEU has a significant impact on both strategy and information systems design while information systems design sig-nificantly affects strategy. This is critically important for information systems profes-sionals as it suggests that the design and capabilities of the firm's information system are important considerations in the selection of a firm's strategy.