Programmable automation and the locus of decision-making power

Computer-based technology is often credited with making decentralized decis ion-making possible, helping firms to respond rapidly to changing marker co nditions. Research on this subject, however, shows contradictory effects: s ome studies support decentralization and others support centralization. Thi s longitudinal study examines how one form of computer-based technology, pr ogrammable automation (PA), affects centralization. Unlike previous studies , it attempts to clear up some of the confusion surrounding technology's ef fect on centralization by distinguishing between strategic and operating de cisions, and between decision-making authority and influence. As expected, PA flattened the hierarchy. It had no effect on strategic decision-making p ower, but surprisingly, did influence centralized line-operating authority and influence. This finding is particularly striking because firms with dec entralized line-operating decision-making are more likely to adopt PA.