Studies of Information Technology (IT) services consistently show that IT services are organized differently in large versus small firms. Larger firms often locate independent IT centers throughout the firm (e.g., within each product division), where each center maintains its own decision rights. Smaller firms often have just one IT unit or center that serves all divisions. Provide a potential explanation for this observation.

In large firms, some business functions are consolidated centrally instead of being controlled by the various divisions of the company. One example is environmental compliance and control, which is a function responsible for complying with environmental regulations and managing the risk of impacts on the environment. Provide a potential explanation for this observation.

Some large firms are highly diversified and others are more focused. Holding firm size and the number of product divisions constant, which type of firm (diversified or focused) is more likely to have decentralized IT units? Explain.