The Effect of Knowledge Economy on Organizational Environments: Do the Governance Mechanisms Differ According To Institutional and Technical Environments

Abstract

Technological developments result in important changes for organizations and their environment. The most remarkable change in the organizational field is the widespread usage of Internet, a new information and communication technology (ICT). The changes depending on Internet, affect organizational structures, since they are designed compatible to the communication needs dependent on the technology. In some cases, however, the communication technologies can be developed in consistence with the organizational structure. This indicates that, when ICTs are taken into consideration, it occurs that there is no clear distinction between technical and institutional organizational environments. The ICTs dependent on Internet is both a legitimacy source for the organizations and an efficiency tool. Accordingly, in this study it is considered that the technical and institutional environments are interpenetrated and different types of governance mechanisms result due to the varying effects of the environmental pressures. Testable propositions are developed for different types of environments.