Crises and revolutions in information technology: lessons learned from Y2K

In an environment in which information technology has become a critical link between and among suppliers and customers, organizations were recently threatened by potential systems failures that could have erased the gains of the past decade. Although experts predicted that Y2K could lead to devastating results, those dire predictions turned out to be false. However, we suggest that a careful analysis of IS decision making during the Y2K crisis can provide insights into how and why IS managers make decisions. We argue that two schools of organizational theory provide cogent perspectives on this problem. In particular, the literatures of organizational ecology and institutional theory explain not only the difficulties firms had in recognizing and reacting to the Year 2000 problem, but also the pressures placed on them by constituents aware of this phenomenon. Such conclusions underscore the value of multiple theory bases in exploring what appear to be unprecedented managerial challenges brought on by the changing role of IT.