Organization design: an information processing view

Abstract

A basic proposition is that the greater the uncertainty of the task, the greater the amount of information that has to be processed between decision makers during the execution of the task. If the task is well understood prior to performing it, much of the activity can be preplanned. If it is not under- stood, then during the actual task execution more knowledge is acquired which leads to changes in resource allocations, schedules, and priorities. All these changes require information processing during task performance. There- fore the greater the task uncertainty, the greater the amount of information that must be processed among decision makers during task execution in order to achieve a given level of performance. The basic effect of uncertainty is to limit the ability of the organization to preplan or to make decisions about activities in advance of their execution. Therefore it is hypothesized that the observed variations in organizational forms are variations in the strategies of organizations to 1) increase their ability to preplan, 2) increase their flexibility to adapt to their inability to preplan, or, 3) to decrease the level of performance required for continued viability. Which strategy is chosen depends on the relative costs of the strategies. The function of the framework is to identify these strategies and their costs.