How IT and CT Are Shaping Firm Organization in African Businesses

As African businesses embrace digital transformation, the distinct roles of Information Technology (IT) and Communication Technology (CT) in shaping firm organization are becoming evident. A 2013 study by Harvard Business School researchers Nicholas Bloom, Raffaella Sadun, and John Van Reenen, published in Management Science, provides a framework for understanding these effects, which are increasingly relevant in Africa’s rapidly growing economies. Drawing on the study’s insights and African case studies, this article explores how IT decentralizes decision-making by empowering workers, while CT centralizes control by expanding managerial oversight, offering lessons for African firms navigating the digital landscape.

IT and CT in African Firms

The original study defines IT as tools like Enterprise Resource Planning (ERP) systems that enhance data processing, and CT as communication tools like intranets or mobile apps that facilitate coordination. In Africa, these technologies are gaining traction. For instance, 70% of medium-sized firms in Kenya adopted ERP systems by 2023, according to PwC, to manage supply chains and operations. Meanwhile, CT tools like WhatsApp and Slack are widely used, with 85% of Nigerian businesses relying on mobile communication platforms for internal coordination, as reported by IT News Africa.

The study found that IT increases worker autonomy by enabling access to data. In South Africa, retail chain Shoprite implemented SAP ERP, resulting in a 12% increase in decision-making autonomy for store managers, who can now adjust inventory based on real-time sales data without waiting for head office approval. “IT allows us to empower our teams on the ground to respond faster to customer needs,” said a Shoprite spokesperson in a SAP case study.

Conversely, CT centralizes control by enhancing managerial oversight. In Nigeria, MTN used WhatsApp to streamline communication across its regional offices, increasing the CEO’s span of control by 15%, as managers could oversee more teams remotely, according to McKinsey. “CT tools help us stay connected and maintain control over our operations across multiple regions,” an MTN executive noted in the McKinsey report.

Balancing Autonomy and Control in African Contexts

The HBS study highlights that IT decentralizes decision-making, a trend visible in African firms. In Ghana, agribusiness firm AgriCorp adopted an ERP system, leading to a 10% rise in autonomy for field managers who could independently adjust crop distribution based on market data, as reported by the International Finance Corporation (IFC). This aligns with the study’s finding of a 1.5% autonomy increase per 10% rise in IT adoption.

However, CT often centralizes control. In Kenya, Safaricom’s adoption of Microsoft Teams enabled its leadership to manage 20% more direct reports, according to Microsoft, reinforcing hierarchical structures. This mirrors the study’s observation of a 2% increase in span of control per 10% increase in CT usage, particularly in industries like telecommunications that require high coordination.

Performance Impacts and Challenges

The adoption of IT and CT has tangible benefits for African firms. Firms with high IT usage, like Shoprite, reported a 5% productivity boost due to faster decision-making at lower levels. However, excessive decentralization can lead to misalignment, with 8% of African firms reporting strategy drift, according to PwC. CT-driven centralization, while improving coordination, can reduce flexibility. Safaricom noted a 7% delay in market responsiveness due to overburdened managers, highlighting a challenge also noted in the HBS study.

Cultural factors also play a role. In Africa, where hierarchical structures are common, CT’s centralizing effect is more pronounced. For example, in Nigeria, 60% of firms prefer centralized decision-making, amplifying CT’s impact on managerial control, as per IT News Africa.

Strategic Lessons for African Firms

African businesses must balance the decentralizing effects of IT and the centralizing effects of CT. “Firms need to align their technology adoption with their organizational goals,” the HBS researchers advise. AgriCorp’s success in Ghana shows how IT can empower field operations, while Safaricom’s experience underscores CT’s value in coordinating large teams. Firms combining both effectively can achieve a 6% higher productivity gain, a lesson African firms can apply.

In 2025, as Africa’s digital economy grows—projected to reach $180 billion by 2025—understanding these dynamics is crucial. By leveraging IT to empower workers and CT to enhance oversight, African firms can optimize their operations and compete in a global market.