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The Internet is flourishing and the World Wide Web is growing at an exponential rate. A fundamental concept of Intranet, the so-called second wave, was introduced only a few years ago. Intranets have been embraced by corporate users of information services and made substantial inroads in strategic vision documents and procurement practices.In recent years, information has become the critical commodity needed for success in the changing global economic order. Information technology(IT) has created the Intranet as a vitally important mechanism for the storage, dissemination, and even the analysis data. The present study is an attempt to develop a more through understanding of the potential and actual impact of the Intranet on organizational functions and activities. Expecially, it also consists of an effort to assess the impact of the Intranet on productivity. The research also addresses the issue of how the Intranet affects productivity and shapes or modifies business activities. The results of literature review and study revealed that middle managers believe that the extent of the Intranet use is significantly related to improvements in overall organizational functions and activities. While communication, decision-making, productivity, work collaboration, and business activities are all enhanced by Intranet use, productivity appears to be most dramatically improved by Intranet use.