Past research linking information technology and organizational structure has been inconclusive and contradictory. The purpose of this study is to resolve some of this confusion by taking into consideration one theoretical issue and three methodological problems. The one theoretical issue is an assessment of the importance of environment as a key external variable constraining both organizational structure and the use of information technology. To date, there has been no systematic, empirical research on the conceptual linkage among all three of these variables. The three methodological issues concern measurement problems associated with (1) controlling for different levels of analysis, (2) establishing a clear operationalization of information technology, and (3) differentiating institutional and questionnaire approaches to data collection. The research results in four conclusions. First, data confirm the environment as a key external variable in the linkage between information technology and organizational structure. Second, three central dimensions of information technology are identified: Growth of Capacity, extensiveness of information technology use, and information technology sophistication. Third, in order to maximize the explanatory power of information technology on other organizational constructs, it is necessary to differentiate between the actual use of information technology as opposed to the mere presence of information technology. Fourth, carefully designed questionnaire measures reveal no significant differences from institutional measures in the assessment of key organizational constructs.