A Model for Information Processing Capacity: Formalizing the Impact of Structural and Information System Choices on Organizational Performance

This paper proposes a formal model of information processing inorganizations. The model takes a process view of organizations and includesboth structural and IS features of processes. Two structural properties areconsidered, networking and parallelism. Information systems are representedin terms of quantity of information used and level of informationcustomization allowed. Process performance is measured in terms of totalinformation processing capacity and flexibility afforded by a process. Therelationship between structural and information system choices and processperformance is studied by simulating the model for a range of values. Thepaper derives a set of propositions describing the independent and combinedimpact of structural and information system choices on performance. The results suggest the predominance of networking over parallelism and ofinformation customization over information quantity in determininginformation processing capacity. They also show a negative effect ofnetworking on process flexibility and an amplifying effect of networking onthe benefits of information customization. Overall, the findings validatethe interdependence between structural and information system variables indetermining process performance.