The Emergence of Functional Knowledge in

Sociotechnical Systems

Victoria L. Mitchell

and

Barrie R. Nault

Haskayne School of Business

University of Calgary
Calgary, Alberta
Canada T2N 1N4

November 2003

We thank the Social Science and Humanities Research Council of Canada, the Natural Sciences
and Engineering Research Council of Canada, and the Informatics Research Center at the
University of Calgary for generous support.

Copyright © 2003 by Victoria L. Mitchell and Barrie R. Nault. All rights reserved.
 The Emergence of Functional Knowledge in Sociotechnical Systems

Abstract

Sociotechnical systems theory (STS), a theory that originated in studies of mechanization in

British coal mines, holds that work processes consist of two separate dimensions, one social, the

other technical. The main tenant of STS is the principle of joint optimization – that is, the

dimensions are reciprocally interdependent and must be designed conjointly. Although it has

been intuitively appealing to conceptualize work processes along two dimensions, equivocal

outcomes in STS research suggests there may be additional dimensions. In the context of IT-

intensive reengineering projects, we examine the extent to which the technical dimension, the

social dimension, and their reciprocal interdependence explain variance in project performance.

Project performance is captured with an objective measure of IT-related project delay (IT-delay)

and a subjective measure of client satisfaction. We find that neither the main effects nor the

interaction effect significantly explains IT-delay or client satisfaction. Allowing for additional

dimensions in our empirical analysis, however, we find that elements of functional-knowledge

that were embedded in the initial technical dimension emerge as a separate dimension. Although

the main effects of the technical, social and functional-knowledge dimensions do not

significantly explain IT-delay or client satisfaction, interactions among the three dimensions

explain a significant proportion of both measures of project performance. As a result, rather than

embedding functional-knowledge in the social or technical dimensions, we find functional-

knowledge is a separate third dimension and the principle of joint optimization must incorporate

all three dimensions.

1
I. Introduction

Sociotechnical systems (STS) theory was originated by Trist and Bamforth (1951) in a paper on

the effects of mechanization in British coal mines. The authors argued that a work process could

not be seen either as a technical system - plant and machinery, or as a social system - social

relations and work organization, but rather had to be seen in terms of both of these dimensions.

Thus the term “sociotechnical system” was coined to describe a method of viewing organizations

that emphasizes the interrelatedness of the social and technological dimensions. The coal mining

studies suggest that most of that industry’s problems had resulted from the introduction of

significant changes in the technical aspects of production without adequate attention to their

impact on social structure and human requirements (Fox, 1995). The same argument applies

today. In response to competitive pressures, organizations are investing in information

technology (IT) to reengineer their business processes without a clear understanding of the social

implications.

STS theory draws heavily from open systems theory. The term “system” suggests that all

parts of an organization are interrelated, so that the design of one necessarily affects the

operation of another. The “open” perspective implies that the social and technological

dimensions of work processes must be designed not only in relation to each other, but also with

reference to evolving environmental demands. STS reflects the goal of integrating the social

requirements of people doing work with the technical requirements needed to keep the work

processes viable with regard to their environments. These two requirements must be considered

interdependent, because arrangements that are optimal for one dimension may not be optimal for

the other, or for the firm as a whole.

2
 In order to jointly optimize the technical and social dimensions, reengineering projects

require a thorough understanding of the knowledge that underlies both the IT platform and

related work processes. Technical knowledge of IT platform components and how those

components relate form the basis for technological change (Henderson and Clark, 1990).

Collective, objectified knowledge embodied in work activities and how those activities relate

provides a foundation for social change (Polanyi, 1974). Integrating the social and technical

dimensions creates reciprocal interdependencies (Thompson, 1967) that are often idiosyncratic,

and the ensuing functional-knowledge forms the basis of competitive advantage (Barney, 1991).

As functional-knowledge evolves over time, it becomes more extensive and more difficult to

transfer due to greater technological variability and complexity of work activities.

Studies on the productivity of IT have provided support for positive returns to

investments in IT capital (the technical dimension) such as hardware and software at the

economy level (Oliner and Sichel, 2000) and at the firm level (Brynjolfson and Hitt, 1996).

Other research, however, found these positive returns only in highly automated sectors such as

IT hardware and other manufacturing that is a small portion – 12 percent - of the economy

(Gordon, 2000). Furthermore, research at the firm level found that possible inefficiency in IT

investment and management may have led to an under-realization of IT returns (Lee and Barua,

1999). These latter studies provide economy- and firm-level evidence that IT investments in the

technical dimension alone are not always successful. Indeed, previous research indicates that the

successful implementation of IT-intensive reengineering projects (hereafter reengineering

projects) depend largely on management’s handling of human problems (Mumford, 1996).

We test two main tenants of STS in the context of reengineering projects. The first tenant

is that work processes are best represented by two dimensions: a technical system and a social

3
system. The second tenant is the “principle of joint optimization” – because the technical and

social dimension are interdependent, performance can only be optimized by jointly considering

the two dimensions. A summary of our main results is as follows. First, we partition a set of

IT/reengineering issues into constructs representing social and technical dimensions, and find

that neither significantly explains project performance – either an objective measure of IT-

related project delay (IT-delay) or a subjective measure of client satisfaction. More importantly,

the interaction of the social and technical dimensions does not significantly add to the

explanation of IT-delay or client satisfaction. Consequently, the principle of joint optimization

between the social dimension and technical dimension fails to be significant in determining

project performance for reengineering projects.

Although it is intuitively appealing to conceptualize work processes along two

dimensions, equivocal outcomes in STS research (Spender, 1996) suggests there may be

additional dimensions. In allowing for additional dimensions in a principle components analysis,

we find that a third dimension emerges from our set of IT/reengineering issues – primarily a

subset of those that made up our earlier technical dimension. We label this new construct

“functional-knowledge”, and redefine the separate technical and social dimensions. Although the

main effects of our social, technical and functional-knowledge dimensions do not significantly

explain IT-delays or client satisfaction, when interactions between the dimensions are included –

both two-way interactions and a three-way interaction – these three dimensions significantly

explain IT-delays and client satisfaction. Thus, our fundamental result is that in reengineering

projects STS theory should consider certain forms of knowledge as a separate dimension rather

than embedding all knowledge in the technical and social dimensions. And, joint optimization

between these three dimensions is important for maximizing project performance.

4
 The remainder of our paper proceeds as follows. The next section presents the theoretical

underpinnings and previous empirical studies of STS in high technology environments, and

discusses the role of knowledge in reengineering projects. This is followed by a description of

the study’s research methodology. We then provide the details of our analysis and results. The

impact of these findings on the principle of joint optimization and the number of dimensions that

should make up IT-intensive work processes are then discussed.

II. STS Theory, Knowledge and IT-Intensive Reengineering Projects

Sociotechnical Systems Theory

The key tenet of STS theory is the principle of joint optimization - an organization can perform

optimally only if the social and technical dimensions are designed to fit the demands of each

other and of the environment (Van De Ven and Joyce, 1981; Pasmore, Francis, Haldeman and

Shani, 1982). Attempts to optimize the technical or social dimension alone will result in the

suboptimization of the socio-technical whole (Trist, 1981). Thus, STS is a method of viewing

organizations that emphasizes the interrelatedness of the functioning of the social and technical

dimensions.

This main principle of STS theory has been extended to technologically intensive

environments including information systems. In information systems, the resulting success or

failure of an implementation cannot be explained in terms of the technology alone as the same

organization can experience success with some information technologies and not others. Neither

can the success or failure of an information system be explained in terms of the social dimension

alone as the same technology will exhibit different properties in different organizations.

Therefore, both technical and social dimensions must be considered together (Burkhardt and

5
Brass, 1990). Moreover, a growing body of research suggests that critical problems companies

face are not technical, but managerial. Hence the STS perspective of people (social) along with

techniques and functional-knowledge keeps the focus on management (directing the interaction

of technical and social) (Shani and Sena, 1994).

Some case studies have encouraged the application of STS theory to IT-based contexts.

In examining a reengineering project undertaken by a computer operations department, Taylor

(1986) concluded that STS analysis was appropriate for knowledge work and would facilitate

successful implementation of such projects. In their study of reengineering projects in an

integrated factory, Chase and Susman (1986) advocate the use of STS analysis to understand the

issues that may arise when planning and designing new processes. Bostrom and Heinen (1977)

promote the use of a STS approach as a MIS design methodology, suggesting that its utilization

solves many of the problems associated with new applications of IT, thus substantially reducing

the number of IT-related failures.

STS theorists and practitioners alike, however, have been concerned with the

applicability of STS to various organizational settings. This issue first surfaced in Norway as

early as 1965, when STS applications were extended to include continuous-process industries

and manufacturing organizations (Thorsrud, Sorensen, and Gustavsen, 1976). Pasmore, Petee

and Bastian (1986) describe a longitudinal study involving two laboratories of a major health

care institution that employed STS analysis to facilitate the introduction of new technologies and

work practices - an intervention that did not achieve the results desired. Pava (1986) studied the

applicability of STS theory to service organizations characterized by non-routine tasks involving

poorly structured problems with erratic inputs and outputs, and identified several conditions that

undermined the use of STS theory in that context. Numerous other researchers have pointed to

6
the omissions and ambiguities in the work of STS theorists (Brown, 1967; van der Zwaan,

1975; Maton, 1988). In his examination of the STS case studies, Kelly (1978) concludes that

the concept of joint optimization has little connection with the reality of STS practice. In their

review of 134 experiments using an STS approach to work redesign, Pasmore et al. (1982) point

out that few STS experiments actually involve technological change, rather, most concentrate on

rearranging the social systems around an existing technical system to approximate joint

optimization.

A common difficulty in studies of STS is that the meanings of “technical system” and

“social system” have not always been well-defined. One of the pioneers of STS, Emery,

suggested that the technical dimension was related to aspects of the natural sciences, whereas the

social dimension included occupational roles and structure, methods of payment, supervisory

relationships, and work culture (Emery, 1959). More recently, Pasmore et al. (1982) defined the

technical dimension as tools, techniques, procedures, skills, knowledge, and devices used by

members of the social dimension. In contrast, the social dimension was defined as people who

work in the organization and the relationships among them. Similarly, Shani and Sena (1994)

viewed the STS perspective as comprised of a social dimension – people, and a technical

dimension of techniques and knowledge. Thus, both Passmore et. al (1982), and Shani and Sena

(1994) consistently place knowledge in the technical system, although we recognize that there

are elements of knowledge, particularly collective and objectified knowledge in aspects of the

social dimension (Griffith, Sawyer and Neale, 2003). Stanfield (1976) described technology as a

complex multidimensional aggregate rather than a unidimensional variable – an implicit

assumption in STS. Indeed, he argued that STS studies varied greatly in where they draw the line

between technology and the organization.

7
Knowledge and IT-Intensive Reengineering Projects

Kogut and Zander (1992) divide knowledge into information and know-how. Information is

declarative and transferable knowledge, and is typically knowledge about technology

components. Know-how is procedural knowledge, often informal, about the ways that various

parts of a total system fit together, and is embedded in the organizing principles of cooperation

in organizations (Kogut and Zander, 1992). The information/know-how distinction is similar to

the distinction between routines (components) and skills or how the routines are put together

(interrelationships) made by Nelson and Winter (1982). As we outlined earlier, reengineering

projects are characterized by critically important interrelationships between components.

Knowledge of such component interrelationships accumulates through competence in the use of

particular technologies and in the organization capability by which the technologies are applied

(Birkinshaw, Nobel, Ridderstrale, 2002; Kogut and Kulatilaka, 1994). As accumulated

knowledge, this functional-knowledge may be used to correct problems that originated

elsewhere (Hansen, 2002).

The “duality of technology” whereby technology is created by humans and used by

humans in work (Orlikowski, 1992) suggests that any reengineering project is an interaction of

technology and the organization, and therefore informal knowledge of complex technologies is a

by-product of that interaction (Baba, 1990). Designers of formal technology typically cannot

predict exactly how a given piece of technology will perform (Tornatzky and Fleischer, 1990).

The designers may not know, for example, all the ways a technology can fail, or the techniques

to prevent or correct the failure. As a result of such gaps, the formal training, documentation and

8
policies that accompany technology often requires additional functional-knowledge that can only

be learnt through use (von Hippel, 1998; Orr 1996). For example, Hargadon and Fanelli’s (2002)

work shows that work groups both affect technology through social means of control, and

interact creatively with technology – discovering its hidden potential in coping with its emergent

limitations in ways that generate informal bodies of functional-knowledge related to the

technology. Thus, functional-knowledge appears as knowledge embedded in technology, as

knowledge of interrelationships between technology components, as knowledge of work

processes, and as knowledge of the interactions between work processes and technology.

IT Project Performance

Despite uniformly high investments in technology, IT resources tend to be heterogeneously

distributed across firms, leading to different patterns of IT use and effectiveness (Barney, 1991).

Using a resource-based view of the firm, Bharadwaj (2000) divides IT resources into physical IT

infrastructure, human IT resources and IT-enabled intangibles representing technical, social and

knowledge resources respectively. This latter knowledge resource draws from the intellectual

capital embedded in the skills and experience of employees, business processes, policies, and

information repositories, that determine not only individual project performance, but a firm’s

overall effectiveness (Clark, Cavanaugh, Brown, and Sambamurthy, 1997; Nelson and Winter,

1982; Mata, Fuerst and Barney, 1995; Clemons and Row 1991).

Traditionally, project performance has been defined as adherence to predictions

regarding cost, schedule, and technical specifications (Pinto and Mantel, 1990). It has also been

determined more subjectively by measuring client satisfaction (Baker, Murphy and Fisher,

1988). How a project’s clients view the manner in which a project was implemented

9
significantly affects their satisfaction with project outcomes (Melone, 1990). Two key measures

of client satisfaction are project validity and project effectiveness. In the context of

reengineering projects, project validity indicates the extent to which the reengineered process is

“right” for the intended clients – managers and employees that actually use the new technology.

Project effectiveness is concerned with determining whether the reengineered process has a

positive impact – for example, whether the business unit is more effective (Schultz and Slevin,

1975). Although a project may meet traditional performance measures such as being on time

and within budget, implementation success is questionable unless these aspects of client

satisfaction are addressed (Mitchell and Zmud, 1999).

To effectively apply IT to new work processes, human, organizational, and technical

problems must be identified in advance and action must be taken to resolve them. In order to

identify the technical and social dimensions of reengineering projects we conducted a survey of

the information systems literature that provided us with key implementation issues for IT-based

reengineering projects implemented in the 1990s through 2002. Of primary concern to IT

managers during this time period, were problems with software and database development,

hardware linkages (e.g., telecommunications), network configuration, expertise, training, and

policies (Brancheau, Janz and Wetherbe, 1996; Troyer, 2002). Organizational change issues

identified in the literature as critical to both IT projects and reengineering success were top

management support (Armstrong and Sambamurthy, 1999; Troyer, 2002), joint business unit and

IT planning (Madnick, 1991; King, 1997), shared understanding of the goals to be obtained

(Horner Reich and Benbasat, 1996, 2000) and user involvement (Noble and Newman, 1990;

Ravichandran, and Rai, 2000). These eleven issues, which we collectively call IT/reengineering

issues, capture the major social and technical obstacles confronting reengineering projects.

10
III. Methodology

Instrument Development

To measure the impact of the social and technical dimensions on project performance, we

constructed measurement scales for the IT/reengineering issues affecting project implementation

described immediately above. A survey item was developed for each of the eleven

IT/reengineering issues using a seven-point Likert scale. These items formed the basis of our

independent variables representing obstacles embedded in the social and technical dimensions.

Our dependent variable, project performance, was operationalized using two measures:

an objective measure being duration of IT-related project delay (IT-delay) and a subjective index

of client satisfaction. The objective measure, IT-delay, is indicative of the project’s technical

performance. Technical shortfalls delay project completion. For the subjective index we

adapted a validated instrument for project performance -Pinto and Slevin’s (1986) Project

Implementation Profile - that essentially measures perceived client satisfaction with the project

implementation process. In measuring client satisfaction we capture the extent to which social

performance is optimized (Melone, 1990; Hiltz and Johnson, 1990).

A pilot study was conducted to evaluate the meaning, ordering and representativeness of

the survey items. The initial instruments were sent to four organizations (two in health care and

two in telecommunications) for review by project managers, IT managers and process users to

evaluate the degree to which questions and items represented the intended issues and concepts.

These participants were then interviewed by phone for their feedback. Their comments were

incorporated in the final survey instruments, which are presented in Appendix A.

11
Data Collection

This study employed a cross-sectional survey of reengineering projects as identified by the

popular press, private agencies and government offices. The sampling frame consists of projects

implemented in the 1990s in the U.S. health care sector. One hundred and sixty-six project

managers and IT managers across 83 organizations were contacted by phone and informed of the

study. Of those contacted, 74 sets of managers agreed to participate. Sets of matched

questionnaires across the two participant categories were obtained from 63 organizations about a

recent reengineering project. Recent refers to project completion with the previous 6 months.

The projects, which served as data collection points, varied across a number of dimensions. The

typical project was allocated a multi-million dollar budget, over a three-year time horizon to

change an institutionalized process involving multiple work flows. The majority of projects had

at least one team member with prior organizational change experience. Project duration ranged

from 4 months to 9 years, with an average completion time of 10 months. Of that, 6 months was

the average time lost due to IT-related problems.

The majority of organizations had recently implemented some aspect of an enterprise-

wide hospital information system (HIS) affecting the work patterns of physicians, nurses and

ancillary personnel. Several multi-hospital systems had implemented picture archive and

communication systems that eliminated hardcopy radiographs (x-ray film) and dramatically

altered the work patterns of radiologists. Physician order-entry systems altered the

communication flow between physicians and other members of the medical team, eliminating

ward clerks as intermediaries. Pharmacy information systems allowed for direct entry

prescriptions and digital updates to dispensing machines on each floor. This substantially

reduced foot traffic between the pharmacy and nursing units. Laboratory systems allowed

12
physicians to retrieve lab results in-house and remotely, in their office. These HIS applications

replaced massive paper trails with electronic data transfer and storage. In doing so, work

patterns were significantly altered for all members of the medical team.

We targeted our questions to the managers most knowledgeable about the subject of the

questions. IT managers were queried about the eleven IT/reengineering issues used to form our

independent variables. Using a seven-point Likert scale, IT managers were asked to identify the

extent to which each of the seven IT issues were a significant source of IT-related project delays,

and indicate the level of shared goals, joint planning, top management support and user

involvement – the organizational change issues. In addition to project descriptions, project

managers provided data concerning the dependent variables of IT-delays and client satisfaction.

Using separate respondents, one for our independent variables and one for our dependent

variables, reduces the threat to internal validity that could come from the same respondents

answering both independent and dependent variables (Campbell and Stanley, 1963).

IV. Analysis and Results

A Test of Joint Optimization

Table 1 shows the descriptive statistics for the eleven IT/reengineering issues. Most of the means

for the individual issues are close to the center of the seven-point Likert scale, and most of the

standard deviations are close to 2.0. The exception is User Involvement that has both a low mean

and small standard deviation, indicating that there were few problems with User Involvement.

--------------------------------
Insert Table 1 About Here
--------------------------------

13
 --------------------------------
Insert Table 2 About Here
--------------------------------

Principal components analysis (PCA) was used to categorize IT/reengineering issues in a

model restricted to two-factors – one representing the technical dimension and the other the

social dimension. Table 2 shows the variance explained by each component, and we note that

the eigenvalues suggest that the IT/reengineering issues fall into three factors rather than the two

specified – an issue we will return to later. The factor loadings in Table 1 show that Database

Development, Expertise, Hardware Linkages, Network Configuration, Policies, Training and

Software Development load on the same factor that we label the “technical” dimension. The four

remaining items, User Involvement, Top Management Support, Shared Goals, and Joint Planning

load on the second factor that we label the “social” dimension. In the context of the STS

literature we would expect Database Development, Expertise, Hardware Linkages, Network

Configuration, Training, and Software Development to load together as the technical dimension

since that dimension is defined to include tools, techniques, procedures, skills, knowledge, etc.

We would also expect User Involvement, Top Management Support, Shared Goals, and Joint

Planning to load together as the social dimension because that dimension is defined to include

people in the organization and the relationships among them. STS theory is unclear about where

Policies belong. If Policies relate to procedures, then Policies belong in the technical dimension

– indeed, that is where our PCA placed the item. However, Policies could govern relationships

between people, in which case the item would belong in the social dimension.

The factor loadings in the rotated factor matrix for the two-factor PCA (Table 1) indicate

an absence of correlation of items with more than one factor, suggesting both convergent and

discriminant validity for the technical - social dichotomy (Stone, 1978; Kerlinger, 1986). The

14
majority of primary factor loadings exceeded the 0.722 critical value for significance (Stevens,

1986), with the remaining greater than 0.60. This two-factor solution explains 60.7 percent of

the variance among the IT/reengineering issues. Cronbach’s Alpha for the seven items that

loaded on the technical dimension is a strong 0.83, and for the four items that loaded on the

social dimension is an even stronger 0.89.

The two-factor PCA loadings over 0.60 in Table 1 – those associating items with

dimensions – are all positive. The items are all coded in the “negative” so that, for example, the

item “Top Management Support” is increasing in the lack of support. Therefore, higher factor

scores from a given dimension represents increasing problems with that dimension.

Next, we use ordinary least squares (OLS) multiple regression models to test the

importance of joint optimization between the technical and social dimension in explaining IT-

delays and in explaining client satisfaction. The first regression model estimates the main effects

of the technical and social dimensions,

Y = ß0 + ß1 X1 + ß2 X2 + e,

where X1 and X2 represent the factor scores from the two-factor PCA analysis described above –

technical and social respectively, Y is either IT-delay or client satisfaction, the ßi s are parameter

estimates, and e is a random disturbance term. Because the factor scores are obtained from a

PCA with orthogonal (varimax) rotation, there are no concerns for multicollinearity in the first

regression model. Table 3 displays the results of six regression models, Models 1 and 2 focus on

two STS dimensions, Models 3-6 explore three STS dimensions.

--------------------------------
Insert Table 3 About Here
--------------------------------

15
 Model 1 in Table 3 shows neither the technical nor social dimensions explain IT-delay –

together they explain less than 1 percent of the variance in IT-delays. The social dimension

explains significant variance in client satisfaction whereas the technical dimension does not. The

coefficient of the social dimension is negative, consistent with increases in the factor scores

representing the underlying items - a lack of User Involvement, Top Management Support,

Shared Goals, and Joint Planning. That is, the less User Involvement, Top Management Support,

Shared Goals, and Joint Planning (higher factor scores), the lesser is client satisfaction.

The second regression, Model 2, captures the reciprocal effect of joint optimization

through a multiplicative interaction between the factor scores representing the technical and

social dimensions:

Y = ß0+ ß1 X1 + ß2 X2 + ß3 X1 X2 + e,

where X1 X2 is the interaction effect between the two dimensions and the remaining terms are as

before. Although the multiplicative interaction is not the only manner in which reciprocal

interdependence between the technical and social dimensions could be formulated, the

multiplicative interaction would likely pick up any effects of interdependencies between the two

dimensions.

As Model 2 indicates, the interaction of the technical and social dimensions does not

significantly explain either IT-delays or client satisfaction. Variance inflation factors just over

1.0 indicate that the interaction is not collinear with the main effects, and the remaining

diagnostics are consistent with no multicollinarity. Indeed, apart from the social dimension

explaining 20 percent of client satisfaction, none of the other variables are significant in either

regression on either dependent variable. Therefore, joint optimization between the technical and

16
social dimensions – in the form of an interaction term - is insignificant in explaining IT-delays or

client satisfaction with reengineering projects.

In examining the explanatory power of our regressions the multiplicative interaction is a

flexible form for modeling interdependence and joint optimization. The interaction form with

factor scores captures both a matching in levels of technical and social obstacles – that is

high/high and low/low versus a mixture, and a monotonic scale from a combination of low/low

up to high/high. Thus, the lack of a significant increase in explanatory power with interaction as

compared to only main effects suggests that if there is an effect of interdependence of technical

and social dimensions, then that interdependence is not defined by matching or a monotonic

scale correlated with the one described above.

Are There Only Two Dimensions in STS?

As we noted earlier, the eigenvalues in Table 2 suggest three factors or dimensions underlie the

set of IT/reengineering issues: three of the eigenvalues are greater than unity (Kaiser rule), and

the third is roughly twice as large as the fourth and the fourth is only slightly larger than the next

three eigenvalues (scree analysis). These three dimensions explain over 73 percent of the

variance in IT/reengineering issues. Consequently we ran a three-factor PCA, and the rotated

factor loadings are provided in Table 1.

It is clear from the loadings from the three-factor PCA in Table 1 that there are three

separate dimensions in the data. Comparing the two-factor PCA in Table 1 to the three-factor

PCA, we see that the items that loaded on the initial technical dimension divided into two

dimensions. In the three-factor PCA the first dimension consists of Database Development,

Hardware Linkages, Network Configuration and Software Development. The second dimension

17
is made up of Expertise, Policies, and Training. We continue to name the first “technical”, and

name the new dimension “functional-knowledge.” The inclusion of Policies with this new

dimension reinforces the interpretation of Policies as procedures we found in the two-factor PCA

rather than as rules that govern relationships between people. The four items that made up the

social dimension in the two-factor model, User Involvement, Top Management Support, Shared

Goals, and Joint Planning, remain loaded on a separate single dimension that we continue to

name “social.” As before, the absence of correlation between item groupings and the relatively

clean factor loadings, suggest both convergent and discriminant validity for the three

dimensions. All primary factor loadings except one (at 0.713) exceeded the 0.722 critical value

for significance (Stevens 1986). Cronbach’s Alpha for the new four-item technical dimension is

0.824, and for the functional-knowledge dimension is 0.81, both inside the acceptable range for

reliability. In both PCAs all the loadings over 0.7 are positive. Given the items are all coded in

the “negative,” higher factor scores from a given dimension again represents increasing

problems embedded in that dimension.

Of course, aspects of knowledge are embedded in all of our items – for example, Top

Management Support embeds knowledge of the relationship between top management and the

project. Our PCAs do not indicate that all aspects of knowledge separate into a third dimension,

but rather the items that are direct measures of functional know-how (Kogut and Zander, 1992) –

expertise, training and policies – are naturally separated from technical and social items in which

other aspects of knowledge are embedded. Based on this analysis we believe that in the context

of reengineering projects, the explanatory power of STS theory may be enhanced by including

functional-knowledge as a separate dimension, consistent with the literature discussed earlier

showing that functional-knowledge is a critical component of reengineering projects.

18
Testing Joint Optimization with Revised STS Dimensions

Even with the addition of a third dimension, functional-knowledge, the validity of the original

principle of STS – joint optimization - still remains an important question. That is, do the

different dimensions need to be considered jointly in order to optimize project performance? We

again use OLS regression model to test the importance of joint optimization of the social,

technical, and functional-knowledge dimensions in explaining IT-delays and in explaining client

satisfaction. Model 3 estimates the main effects of the technical, social and functional-

knowledge dimensions,

Y = ß0 + ß1 X1 + ß2 X2 + ß3 X3 + e,

where X1 , X2 and X3 represent the factor scores from the three-factor PCA analysis described

above – technical, social, and functional-knowledge respectively, Y is either IT-delay or client

satisfaction, the ßi s are parameter estimates, and e is a random disturbance term. Again, because

the factor scores are obtained from a PCA with orthogonal (varimax) rotation, there are no

concerns for multicollinearity in this main effects model.

Table 3 shows the results of the main effects model. After separating functional-

knowledge from the technical dimension, the latter is significant in explaining variance in IT-

delays. Neither of the other dimensions’ main effects significantly explain IT-delays, and Model

3 is not significant at the .05 level - together the three main effects explain less than 11 percent

of the variance in IT-delays. In the regression on client satisfaction the social dimension is the

only significant main effect and together the three dimensions explain 17.4 percent of the

variance in client satisfaction. As before, with the underlying items coded in the “negative”, the

coefficient on the social dimension is negative.

19
 To re-test the principle of joint optimization in the context of technical, functional-

knowledge and social dimensions, we formulate a second set of regression models that capture

the effect of joint optimization through multiplicative interactions between the factor scores.

With three dimensions there are three alternative specifications. The first is Model 4 that

includes the full set of interactions - that is, all two-way interactions between the technical,

functional-knowledge and social dimensions, and a three-way interaction:

Y = ß0+ ß1 X1 + ß2 X2 + ß3 X3 + ß4 X1 X2 + ß5 X1 X3 + ß6 X2 X3 + ß7 X1 X2 X3 + e,

where Xi Xj are the interaction effects between each two sets of dimensions and the X1 X2 X3 is

the three way interaction. The remaining terms are as before.

As we see from Table 3 (Model 4), the inclusion of the full set of interactions increases

the variance explained in IT-delay roughly fourfold to close to 38 percent as compared to the

main effects model, with the significance of the model and Adjusted R-Square also greatly

increased. In addition, the technical and functional-knowledge main effects, the two-way

interactions with functional-knowledge, and the three-way interaction are significant at the .02

level. We conclude that the full model – main effects and all two-way and three-way interactions

– is an excellent model for explaining IT-delays. In addition, all of the interactions with

functional-knowledge are highly significant, indicating the importance of joint optimization

between functional-knowledge and the other dimensions in explaining IT-delays. In the

regression on client satisfaction we find that the social dimension and the interaction between

social and technical dimensions are significant at better than the .01 level, and that the inclusion

of the interactions doubles the variance explained as compared to the model that includes only

the main effects. It is apparent that the interaction between social and technical dimensions,

which was not sufficiently refined in the previous two-factor model using a technical dimension

20
that included items from both current technical and functional-knowledge dimensions, is

important in explaining client satisfaction.

We refine our models to consider either two-way interactions as in

Y = ß0+ ß1 X1 + ß2 X2 + ß3 X3 + ß4 X1 X2 + ß5 X1 X3 + ß6 X2 X3 + e,

or a three-way interaction as in

Y = ß0+ ß1 X1 + ß2 X2 + ß3 X3 + ß4 X1 X2 X3 + e,

where the variables and parameters are defined as in the full model. Model 5 shows the

regression results when only the two-way interactions are used, and Model 6 shows the

regression results when only the three-way interaction is used. For IT-delays, two-way

interactions between the technical and functional-knowledge dimensions, and between the social

and functional-knowledge dimensions remain significant at the .10 level, as do the main effects

of the technical and functional-knowledge dimensions. As compared to the full model, however,

the variance explained and the Adjusted R-Square falls by 9 percentage points. In the regression

model on IT-delays with only the three-way interaction, the three-way interaction along with the

technical dimension is significant at better than the .05 level. In this case, however, the Adjusted

R-Square falls by roughly 60 percent compared to the full model.

For the regressions on client satisfaction with only the two-way interactions, the two-way

interactions of the technical and social dimensions as well as the main effect of the social

dimension is significant at the .01 level, as it was in the full model. The interaction between the

social and functional-knowledge dimensions, is significant at better than .10. No other

interaction or main effect is significant, and the Adjusted R-Square marginally decreases

compared to the full model. In the regression with only the three-way interaction, the three-way

interaction and the main effect of the social dimension are significant at better than the .025

21
level, but the Adjusted R-Square falls by roughly 30 percent relative to the other two regression

models. On balance, the effects of the interactions that include the social dimension consistently

explain variance in client satisfaction.

In the two full models – regressions of the full set of interactions on IT-delays and client

satisfaction - there are some marginal concerns for multicollinearity. The variance inflation

factors are closer to 2.0 than 1.0 for the two-way interaction between technical and social and the

three-way interaction. Although not severe – variance inflation factors under 4.0 are considered

acceptable (Myers, 1986), we believe this explains why the three-way interaction in the model of

only the three-way interaction on client satisfaction is significant, when that interaction is not

significant in the full model.

More importantly, using Adjusted R-Square that controls for the number of variables in

the regression, each regression model with interactions is substantially better at explaining both

IT-delays and client satisfaction. From Model 3, the Adjusted R-Square of the main effects

regression on IT-delays is 0.06. From Models 4-6 the Adjusted R-Square values for the

regression models with interactions are between 0.127 and 0.300 for IT-delays – a substantial

and significant increase over the main effects regression. Similarly, from Model 3 the Adjusted

R-Square of the main effects regression on client satisfaction is 0.132. From Models 4-6 the

Adjusted R-Square values for the regression models with interactions are between 0.191 and

0.268 for client satisfaction - again a substantial increase over the main effects regression.

Indeed, this gain in explanatory power likely underestimates the true gain as some of the

interaction terms are not significant, and the results of models without those interaction terms

may yield even higher Adjusted R-Square values. Consequently, we conclude that separating the

original STS technical dimension into functional-knowledge and technical makes the principle of

22
joint optimization important in explaining IT-delays and client satisfaction in reengineering

projects.

V. Conclusion

In keeping with two underlying dimensions and the principle of joint optimization, STS theory

hypothesizes than the technical and social dimensions are separate from each other, yet

reciprocally interdependent (e.g., social problems affect technical problems and vice versa). The

factor loadings of the items in the two-factor PCA validates the separation into technical and

social dimensions. However, the regression models of the main effects, and main effects together

with interactions, refute the reciprocal interdependence aspect of STS, as evidenced by a lack of

significant interaction effects. Particularly for the models explaining IT-delays, regression

models with main effects of these two dimensions alone or with main effects plus interactions

that yield negative Adjusted R-Square values suggests a model specification error.

Although the two-factor model explains over 60 percent of the variance in the eleven-

item IT/reengineering issues data, relaxing the constraint of two underlying dimensions results in

a superior three-factor model that explains over 73 percent of the variance. The specification

error is revealed in the three-factor model when the items comprising the technical dimension in

the two-factor PCA solution separate into two distinct dimensions: technical problems and

functional-knowledge deficits representing the technical and functional-knowledge dimensions

respectively. The items and loadings for the social factor underlying the construct “social

dimension” remain virtually unchanged.

After separating the technical dimension into technical and functional-knowledge, and

maintaining the social dimension, the models with the main effects of these three dimensions

23
alone explain little of the variance in IT-delays or in client satisfaction. However, once the

interactions between these different dimensions are included in the regression models the main

effects and interactions explain significant and substantial amounts of the variance in our

performance metrics. Our analysis concludes that the three dimensions – technical, functional-

knowledge, and social – are interdependent in their effects on project performance. Therefore,

once certain forms of knowledge are accounted for as a separate dimension in STS theory rather

than embedded in the technical and social dimensions, the main principle of the theory, joint

optimization, is confirmed.

The separation of functional-knowledge from the other two dimensions is particularly

critical in explaining our objective measure – IT-delays. Without functional-knowledge

separated as a dimension, regressing social and technical dimensions and their interaction on IT-

delays yields a negative Adjusted R-Square. Treating functional-knowledge as a separate

dimension, regressing all the main and interaction effects between social, technical and

functional-knowledge on IT-delays yields an Adjusted R-Square of 0.300. Moreover, the main

effect of functional-knowledge and all of the interaction effects of functional-knowledge with the

other two dimensions are significant. In contrast, the social dimension is most important in

explaining our subjective measure of client satisfaction. Even here the functional-knowledge

items separated from the technical dimension indirectly play an important role as the social

dimension only has significant interaction with the refined version of the technical dimension.

It is worth noting that functional-knowledge was present in the two-factor PCA and the

subsequent regressions on IT-delays and client satisfaction – the IT issues that comprised the

dimension we labeled functional-knowledge initially loaded on the technical system dimension.

Thus, our results are not simply that functional-knowledge is important, but that treating

24
functional-knowledge as a separate dimension is important for explaining outcomes in the STS

theory framework.

The effectiveness of STS theory has been questioned in contexts that are turbulent –

uncertain and rapidly changing – and in contexts where work is knowledge-intensive (see Nadler

and Tushman, 1997; Adler and Docherty, 1998). Indeed, these are contexts that characterize

reengineering projects, and where important knowledge resides in the individual and the

organization rather than with the technology. Direct application of STS theory to these contexts

requires that knowledge reside in both the technical and social dimensions as in Shani and Sena

(1994) where individual’s aptitudes and skills are part of the social dimension, and following

STS theory where knowledge is part of the technical dimension. However, we found that

empirically this direct application does not explain project performance, and nor does it follow

the main STS principle of joint optimization. Instead, separating functional-knowledge from the

social and especially technical dimensions is important in specifying the joint optimization

between dimensions that explain project performance.

25
VI. References

Adler, N. and Docherty, P. 1998. Bringing Business into Sociotechnical Theory and Practice.

Human Relations, 51(3) 319-45.

Armstrong, C. and Sambamurthy, V. 1999. Information Technology Assimilation in Firms: The

Influence of Senior Leadership and IT Infrastructures. Information Systems Research, 10(4)

304-327.

Baba, M. 1990. Local Knowledge Systems in Advanced technology Organizations. In

Organizational Issues in High Technology Management, Lawless and Gomex-Mejia Eds.,

Greenwich, CT: JAI Press.

Baker, B., D. Murphy and D. Fisher.1988. Factors Affecting Project Success. In Project

Management Handbook, Second Edition (Cleland and King, Ed). New York: Van Norstand

Reinhold Company, Inc. 902-919.

Barney, J.1991 Firm Resources and Sustained Competitive Advantage. Journal of

Management, 17(1) 99-120

Bharadwaj, A. 2000. A Resource-Based Perspective on Information Technology Capability and

Firm Performance: An Empirical Investigation. MIS Quarterly, 24(1) 169-196.

Birkinshaw, J.; Nobel, R. and Ridderstrale, J. 2002. Knowledge s a Contingency Variable: Do

the Characteristics of Knowledge Predict Organization Structure? Organization Science,

13(3) 274-290.

Bostrom, R. and Heinen, S. 1977. MIS Problems and Failures: A Sociotechnical Perspective.

MIS Quarterly, (September) 17-32.

Brancheau, J., Janz, B. and Wetherbe, J. 1996. Key Issues in Information Systems Management:

1994-1994 SIM Delphi Results. MIS Quarterly, 20(2) 225-243.

26
Brown, R. 1967. Research and Consultancy in Industrial Enterprises. Sociology, 1: 33-60.

Brynjolfsson, E., and L. Hitt 1996. Productivity Lost? Firm-Level Evidence on the Returns to

Information Systems Spending. Management Science, 42 (4) 541-558.

Burkhardt, M. and Brass, D. 1990. Changing Patterns of Change: The Effects of Change in

Technology on Social Network Structure and Power. Administrative Science Quarterly, 35:

104-127.

Campbell, D. and Stanley, J. 1963. Experimental and Quasi-Experimental Designs for Research.

Chicago: Rand McNally.

Chase, R. and Susman, G. 1986. A Sociotechnical Analysis of the Integrated Factory. Journal of

Applied Behavioral Science, 22(3) 257-270.

Clark, C; Cavanaugh, N.; Brown, C. and Sambamurthy, V. 1997. Building Change-readiness

Capabilities in the IS Organization: Insights From the Bell Atlantic Experience. MIS

Quarterly, 21(4) 425-455.

Clemons, E. and Row, M. 1991. Sustaining IT Advantage: The Role of Structural Differences.

MIS Quarterly, 15(3) 275-292.

Emery, F. 1959. Characteristics of Social-technical Systems. Document No. 527, London:

Tavistock Institute of Human Relations.

Fox, W. 1995. Sociotechnical System Principles and Guidelines: Past and Present. Journal of

Applied Behavioral Science, 31(1) 91-105.

Gordon, R.J. 2000. Does the 'New Economy' Measure Up to the Great Inventions of the Past?,

Journal of Economics Perspectives, 14 (4) 49-74.

27
Griffith, T.; Sawyer, J and Neale, M. 2003. Virtualness and Knowledge in Teams: Managint the

Love Triange of Organizations, Individuals, and Information Technology. MIS Quarterly,

27(2) 265-287.

Hargadon, A. and Fanelli, A. 2002. Action and Possibility: Rconciling Dual Perspectives of

Knowledge in Organizations. Organization Science, 13(3) 290-304.

Hansen, M. 2002. “Knowledge Networks: Explaining Effective Knowledge Sharing in Multiunit

Companies. Organization Science, 13(3) 232-248.

Henderson, R. and Clark, K. 1990. Architectural Innovation: The Reconfiguration of Existing

Product Technologies and the Failure of Established Firms." Administrative Science

Quarterly, 35: 9-30.

Hiltz, S. And Johnson, K. 1990. User Satisfaction with Computer-Mediated Communication

Systems. Management Science, 36(6) 739-764.

Horner Reich, B. and Benbasat, I. 1996. Measuring the Linkage Between Business and

Information Technology Objectives. MIS Quarterly, 20(1) 55-81.

Horner Reich, B. and Benbasat, I. 2000. Factors That Influence the Social Dimension of

Alignment between Business and Information Technology Objectives. MIS Quarterly,

24(1) 81-113.

Kelly, J. 1978. A Reappraisal of Sociotechnical Systems Theory. Human Relations, 31(12)

1069.

Kerlinger, F. 1986. Foundations of Behavioral Research. Fort Worth, TX: Holt, Rinehart and

Winston, Inc.

King, W. 1997. Integration between Business Planning and Information Systems Planning:

Validating a Stage Hypothesis. Decision Sciences, 28(2) 279-309.

28
Kogut, B., and Kulatilaka, N. 1994. “What is Capability? Co-evolution, Complementarities, and

History.” Working Paper, Wharton School, Univerrsity of Pennsylvania.

Kogut, B. and Zander, U. 1992. Knowledge of the Firm, Combinative Capabilities and the

Replication of Technology. Organization Science, 3(3) 383-397.

Lee, B., and Barua, A. 1999. An Integrated Assessment of Productivity and Efficiency Impacts

of Information Technology Investments: Old Data, New Analysis and Evidence. Journal of

Productivity Analysis, 12: 21-43.

Madnick, S. 1991. The Information Technology Platform. In The Corporation of the 1990’s

(Scott-Morton, ed.) New York: Oxford Press.

Mata, F.; Fuerst, W. and Barney, J. 1995. Information Technology and Sustained Competitive

Advantage: A Resource-based Analysis. MIS Quarterly, 19(4) 487-505.

Maton, B. 1988. Socio-Technical Systems: Conceptual and Implementation Problems.

Relations Industrielles, 43(4) 869-887.

Melone, N. 1990. A Theoretical Assessment of the User-Satisfaction Construct in Information

Systems Research. Management Science, 36(1) 68-78.

Mitchell, V.and Zmud, R. 1999. The Effects of Coupling IT and Work Process Strategies in

Redesign Projects. Organization Science, 10(4) 424-438.

Mumford, E. 1996. “Planning for Human Systems.” Human Relations, 49(4) 527-532.

Myers, R. 1986. Classical and Modern Regression with Applications. Boston, MA: Duxbury

Press.

Nadler, D. and Tushman, M. 1997. Competing by Design: The Power of Organizational

Architecture. Oxford University Press, New York, NY.

29
Nelson, R. and Winter, S. 1982. An Evolutionary Theory of Economic Change. Canbridge, MA:

Harvard University Press.

Noble, F.and Newman, M. 1990. User Involvement as an Interactive Process: A Case Study.

Information Systems Research, 1(1) 89-113.

Orlikowski, W.J. 1992. The Duality of Technology: Rethinking the Concept of Technology in

Organizations, Organization Science, 3(4) 398-427.

Oliner, S.D., and D.E. Sichel, 2000. The Resurgence of Growth in the Late 1990's: Is

Information Technology the Story? Journal of Economics Perspectives, 14 (4) 3-22.

Orr, J. 1996. Talking About Machines: An Ethnography of a Modern Job. Ithica, NY: ILR

Press.

Pasmore, W.; Francis, F,; Haldeman, J. and Shani, A. 1982. Sociotechnical Systems: A North

American Reflection on Empirical Studies of the Seventies. Human Relations, 35(12) 1179-

1204.

Pasmore, W.; Petee, J. and Batrian, R. 1986. Sociotechnical Systems in Health Care: A Field

Experiment. The Journal of Applied Behavioral Science, 22(3): 329-240.

Pava, C. 1986. Redesigning Sociotechnical Systems Design: Concepts and Methods for the

1990s. Journal of Applied Behavioral Science, 22(2): 201-222.

Pinto, J. and Mantel, S. 1990. The Causes of Project Failure. IEEE Transactions on Engineering

Management, 37(4): 269-275.

Pinto, J. and Slevin, D. 1986. The Project Implementation Profile: New Tool for Project

Managers. Project Management Journal, September: 57-70.

Polanyi, M. 1974. Personal Knowledge, Towards a Post-Critical Philosophy. Chicago:

University of Chicago Press.

30
Ravichandran, T. and Rai, A. 2000. Quality Management in Systems Development: An

Organizational System Perspective. MIS Quarterly, 24(3) 381-415.

Schultz,R. and Slevin, D. 1975. Implementation and Organizational Validity: an empirical

Investigation. In Implementing Operations Research and Management Science (Schultz and

Slevin, eds). New York: Elsevier Publishing.

Shani, A.B., and Sena, J.A. 1994. Information Technology and the Integration of Change:

Sociotechnical Systems Approach. Journal of Applied Behavioral Science, 30 (2): 247-270.

Spender, J-C. 1996. Making Knowledge the Basis of a Dynamic Theory of the Firm. Strategic

Management Journal, 17: 45.

Stanfield, G. 1976. Technology and Organization Structure as Theoretical Categories.

Administrative Science Quarterly, 21 (September) 489-493.

Stevens, J. 1986. Applied Multivariate Statistics for the Social Sciences. Hillsdale, NJ:

Lawrence Erlbaum Associates.

Stone, E. 1978. Research Methods in Organizational Behavior. Glenview, IL: Scott, Foresman

and Company.

Taylor, J. 1986. Long-Term Sociotechnical Systems Change in a Computer Operations

Department. Journal of Applied Behavioral Science, 22(3) 303-313.

Thompson, J.D. 1967. Organzations in Action. McGraw-Hill Inc..

Thorsrud, E.; Sorensen, B. and Gustavsen, B. 1976. Sociotechnical Approach to Industrial

Democracy in Norway. In Handbook of Work, Organization and Society R. Dubin, (Ed.).

Chicago: Rand McNally.

Tornatzky, L. and Fleischer, M. 1990. The Processes of Technological Innovation. Lexington,

Ma: Lexington Books.

31
Trist, E. 1981. The Sociotechnical Perspective. In Perspectives on Organization Design and

Behavior, Van de Ven and Joyce (Eds.), New York: John Wiley and Sons.

Trist, E. and Bamforth, K. 1951. Some Social and Psychological Consequences of the Long-

wall Method of Coal-Getting. Human Relations, 4: 3-38.

Troyer, C. 2002. GMA Information Technology Spending Study. Computer Sciences

Corporation. http://www.csc.com/newsandevents/news/1303.shtml.

Van de Ven, A., and Joyce, W. 1981. Overview of Perspectives on Organization Design and

Behavior. In Perspectives on Organization Design and Behavior, Van de Ven and Joyce

(Eds.), New York: John Wiley and Sons.

van der Zwaan, A. 1975. The Sociotechnical Systems Approach: A Critical Evaluation.

International Journal of Production Research, 13: 149-163.

Von Hippel, E. 1998. Economics of Product Development by Users: The Impact of Sticky Local

Information. Management Science, 44(4): 629-644.

32
Appendix A - Survey Instruments: Project Manager Questionnaire

This survey is being conducted to gain a better understanding of the relationship between a
firm’s information technology and the redesign of its business processes. Your input is needed
to advance our knowledge in this area.

Background Information

What is the most recent redesign project you’ve implemented (project name)? ___________
When did this project start? __________________________________________________
What was the initial scheduled completion date? __________________________________
What was the actual completion date? __________________________________________
How many significant delays were experienced in implementing the project? ____________
What were the primary causes of delay? ________________________________________
What was the most critical IT-related delay experienced? ___________________________
How many members of your redesign team had previous redesign experience? __________

Client Satisfaction Strongly Strongly

Please circle the extent to which you agree with the following statements. Disagree Neutral Agree

1. The redesigned process which has been implemented, works well. 1 2 3 4 5 6 7

2. The redesigned process is used by its intended clients. 1 2 3 4 5 6 7
3. The redesigned process has directly benefited or will benefit the
intended users through increasing efficiency or effectiveness. 1 2 3 4 5 6 7
4. Given the problem for which it was developed, the redesigned
process seems to do the best job of solving the problem. 1 2 3 4 5 6 7
5. Clients, directly affected by the process, like the new design. 1 2 3 4 5 6 7
6. I am satisfied with how the redesigned process was implemented. 1 2 3 4 5 6 7
7. The redesigned process has been accepted by its intended users. 1 2 3 4 5 6 7
8. The redesigned process improved process performance. 1 2 3 4 5 6 7
9. The redesigned process had a positive impact on those who use it. 1 2 3 4 5 6 7
10. Outcomes of the redesigned process represent a definite
improvement in performance over the old business process. 1 2 3 4 5 6 7

Note: Items 1-10 adapted from Pinto and Slevin, 1986.

33
IT Manager Questionnaire

This survey is being conducted to gain a better understanding of the relationship between a
firm’s information technology and the redesign of its business processes. Your input is needed
to advance our knowledge in this area.

IT/Reengineering Issues Strongly Strongly

Please circle the extent to which you agree with the following statements. Disagree Neutral Agree
The redesign project was significantly delayed because of:
Software acquisition or development activities…………… 1 2 3 4 5 6 7
Database development or modification activities…………. 1 2 3 4 5 6 7
Alterations made to linkages among hardware components 1 2 3 4 5 6 7
Alterations to the network’s configurations………………. 1 2 3 4 5 6 7
New or modified policies…………………………………. 1 2 3 4 5 6 7
Expertise that had to be obtained…………………………. 1 2 3 4 5 6 7
Training requirements for employees……………………... 1 2 3 4 5 6 7
The redesigned process was jointly planned by business & IT units. 1 2 3 4 5 6 7
Goals for the redesign project are shared by business and IT units. 1 2 3 4 5 6 7
The redesigned process had top management support from the start. 1 2 3 4 5 6 7
People who use the process contributed input to the new design. 1 2 3 4 5 6 7

34
Table 1: Descriptive Statistics and Rotated Principle Component Matrices.

Descriptive Statistics Two Factor PCA Three Factor PCA

Functional-
IT/Reengineering Issues Standard Social Technical Social Technical Knowledge
Mean Deviation Dimension Dimension Dimension Dimension Dimension
Software development 3.7460 2.0943 0.893 -0.007 0.885 0.003 -0.137
Database development 3.3333 2.1327 0.890 -0.009 0.881 0.002 -0.164
Hardware linkages 3.2698 2.2448 0.869 -0.001 0.872 0.001 -0.001
Network configuration 3.2222 2.3241 0.801 0.007 0.825 -0.004 0.177
Expertise 4.1905 2.2133 0.003 0.850 0.203 0.811 0.006
Training 4.0794 2.0423 -0.258 0.713 0.004 0.750 0.129
Policies 4.4444 2.3264 0.266 0.660 -0.301 0.713 0.253
Top management support 2.4127 1.8107 0.009 0.658 -0.056 0.864 0.294
Joint planning 2.3333 1.6656 -0.001 0.702 0.003 0.279 0.763
User involvement 1.8571 1.1196 -0.125 0.732 -0.007 0.219 0.878
Shared goals 2.2170 1.4198 -0.124 0.604 -0.006 0.009 0.825

35
Table 2: Principle Component Analysis - Total Variance Explained.

Component Initial Eigenvalues % of Variance Cumulative %

1 3.593 32.667 32.667
2 3.085 28.048 60.716
3 1.362 12.380 73.096
4 0.766 6.962 80.057
5 0.606 5.506 85.563
6 0.505 4.587 90.150
7 0.451 4.096 94.245
8 0.234 2.126 96.372
9 0.176 1.602 97.974
10 0.149 1.350 99.324
11 0.007 0.676 100.000

36
Table 3: Multiple Regression Results

Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

beta beta (VIF) beta beta (VIF) beta (VIF) beta (VIF)
IT-Delay
Constant 6.698*** 6.698*** 6.698*** 6.687*** 6.698*** 6.688***
Social (S) -0.131 -0.283 (1.043) -0.398 -1.392* (1.352) -0.457 (1.158) -1.466 (1.298)
Technical (T) 0.667 0.683 (1.101) 1.883** 2.878*** (1.356) 3.351*** (1.341) 1.890** (1.000)
Functional (F) -1.222 -2.406*** (1.169) -2.413*** (1.169) -1.222 (1.000)
S*T 0.634 (1.043) -1.228 (1.775) -0.188 (1.560)
S*F 2.024** (1.376) -2.841*** (1.422)
T*F -2.693*** (1.427) 1.557* (1.320)
S*T*F 2.625*** (1.479) 2.267** (1.298)
R2 0.009 0.020 0.105 0.378 0.287 0.183
Adj. R2 -0.024 -0.030 0.060 0.300 0.211 0.127
F-Statistic 0.283 0.407 2.314* 4.748*** 3.760*** 3.245**
Client Satisfaction
Constant 66.587*** 66.587*** 66.587*** 66.580*** 66.587*** 66.575***
Social (S) -3.717*** -4.023*** -3.704*** -5.586*** -4.997*** -5.008***
Technical (T) 0.685 0.718 0.229 0.453 0.615 0.238
Functional (F) 0.717 1.273*** 1.269 0.717
S*T 1.275 3.765*** 4.419***
S*F -1.632 0.999
T*F 1.092 -1.926*
S*T*F 1.652 2.768**
R2 0.174 0.200 0.174 0.351 0.329 0.243
Adj. R2 0.146 0.160 0.132 0.268 0.257 0.191
F-Statistic 6.310*** 4.927*** 4.137*** 4.249*** 4.582*** 4.662**
Significance values: * 0.10, ** 0.05, ***0.01
Note: VIF for independent variables are the same for both sets of regressions.

37