The issue regarding the impact of information technology on organizations is here reconsidered by applying a new analytical framework. Information technology affects the cost of transactions which take place under alternative institutional arrangements, such as markets, bureaucracies and groups; namely it shifts the boundaries which separate these different types of organizations. Information technology can affect the efficiency of the organizations which apply it and the organizational behavior of their members. Empirical data show how computerization changes organizational patterns according to efficiency considerations. An enlargement of the framework to take into account alternative mechanisms for organizational participation, such as exit, voice and loyalty, allows to examine the impacts of information technology on participation possibilities within organizations.