Managing impressions with information technology (extended abstract): from the glass house to the boundaryless organization

Reviewer: Henry Bentrup

Major studies of the economic analyses of computer use show the lack of clear economic payoff, and this has become known as the “productivity paradox.” We continue to see major investments in information technology, so the authors attempt to enlarge the consideration of benefits by including the theory of impression management from organization theory. To simplify, if a cost/benefit ratio of one is found for an investment in information technology, there is little economic motive to proceed, because the organization has not even recouped the costs of simple interest compared to placing the same money in a savings account. Nonetheless, the authors say that if the value of good impressions made on employees, customers, and competing businesses from the use of information technology is added, there may be sufficient benefits to justify the costs. These good impressions should occur when the company becomes seen as efficient because it has computers and has achieved status by having the latest and most sophisticated technology available. Such appearances of efficiency and progress contribute to the reputation and legitimacy of the company and have some economic value on that basis alone. The authors admit the difficulty of economically measuring these intangibles, however. With hindsight, one might estimate the contributions of favorable impressions, but such historical evaluations are subject to distortions. Will we ever be able to measure these intangibles to the nearest dollar or even thousand dollars when planning to make such purchases__?__ Probably not. Nonetheless, good managers should know they must decide on more than economic analysis alone. When they do, they should be prepared to monitor the expenditures over time. Another major fallacy is that not every organization automatically values the impressions of efficiency or status of computer usage. We know—and the authors point out—historical instances where companies have derived added value from computer usage other than its direct economic return. Computer centers displayed in the 1960s and 1970s were impressive to many. Managers with desktop computers were the envy of some in the 1980s. Now, workers who telecommute from home and on the road are seen by some to have high status. Factors other than the mere presence of information technology are at work, namely the values of the persons using the information technology, which also apply at the organizational level. This factor is never mentioned by the authors. Another omitted factor is the varying levels of user training in and preparedness for information technology found in different organizations, which affect the outcome of any cost/benefit analysis. Contrary to the authors' assertions, information technology does not automatically give the desirable impressions of “competence, knowledge, security, intelligence soundness, responsibility, and so on.” When we assume such impressions, the likely result is shown in the <__?__Pub Caret>parable of the house built on sand, and the recent Savings and Loan debacle illustrates the potential high costs of proceeding under fallacious assumptions. This is not to disparage the use of computers, or to deny the economic benefits of sound impressions, but impression management does not make an insufficient cost/benefit analysis automatically acceptable, nor does it fully account for past expenditures where economic analyses came up short.