Chiara Francalanci, Paolo Giacomazzi



Evaluating the Economic Implications of Information Systems: A Formal Model of Information Processing Capacity

pdf PDF


The choice of the pattern for cooperation is a traditional issue of the organizational debate on business process design, which typically compares alternative cooperation patters on the basis of cost variables. From an engineering perspective, costs should be contrasted against production capacity as a primary indicator of performance. This paper takes this perspective and proposes a formal model of information processing capacity to evaluate alternative cooperation patterns. Simulation results show how a capacity perspective delivers significantly different results from the cost-oriented organizational view. Traditional design principles for the selection of the most efficient organizational structure (i.e. degree of process networking, specialization, delegation and information overflow) are significantly complemented.


Information Theory, Value of Information, Information processing capacity


[1] J. Lee, K. Siau, S. Hong. 2003. Enterprise Integration with ERP and EAI. Communications of the ACM, 46, 2 (2003) 54-60.

[2] Y. Jiang, J. Zhao. 2014. Co-creating business value of information technology, Industrial Management and Data Systems, 114 (1), pp. 53-69, 2014.

[3] T.W. Malone, K. Crowston. 1994. The Interdisciplinary Study of Coordination. ACM Computing Surveys, 26(1), 87-119.

[4] W.R. Scott. 1992. Organizations: Rational, Natural, and Open Systems. Prentice Hall, 3rd ed.

[5] M.F. Balcan, A. Blum, Y. Mansour, The Price of Uncertainty, ACM Trans. on Economics and Computation, 1(3), pp. 15-29, 2013.

[6] G. De Michelis, E. Dubois, M. Jarke, F. Matthes, J. Mylopoulos, M. Papazoglou, K. Pohl, J. Schmidt, C. Woo, E. Yu. 1997. Cooperative Information Systems: A Manifesto, Cooperative Information Systems: trends & Directions, M. Papazoglou, G. Schlageter eds.

[7] A.G. Sutcliffe, N.A. M. Maiden, S. Minocha, D. Manuel. 1998. Supporting ScenarioBased Requirements Engineering. IEEE Trans. on Software Engineering, 24(12), 1072-1088.

[8] I. Sommerville, P. Sawyer, S. Viller. 1999. Managing Process Inconsistency Using Viewpoints. IEEE Trans. on Software Engineering, 25(6), 784- 799.

[9] A. Lamsweerde, E. Letier. 2000. Handling Obstacles in Goal-Oriented Requirements Engineering. IEEE Trans. on Software Engineering, 26(10), 978-1005.

[10] T.W. Malone. 1987. Modeling Coordination in Organizations and Markets. Management Science, 33(10), 1317-1332.

[11] V. Gurbaxani and S. Whang. 1991. The Impact of Information Systems on Organizations and Markets. Communications of the ACM, 34(1), 49-73.

[12] E. Brynjolfsson, T.W. Malone, V. Gurbaxani, A. Kambil. 1994. Does Information Technology Lead to Smaller Firms? Management Science, 40(12), 1628-1645.

[13] R.H. Hayes, S.C. Wheelwright, K.B. Clark. 1988. Dynamic manufacturing: Creating the learning organization. New York: Free Press; London: Collier Macmillan.

[14] J.R. Galbraith. 1977. Organization Design. Addison-Wesley Publishing Company, New York (NY).

[15] R. Glazer. 1993. Measuring the value of information: The information-intensive organization. IBM Systems Journal, 32(1), 99-110.

[16] G.P. Huber. 1990. A Theory of the Effects of Advanced Information Technologies on Organizational Design, Intelligence, and Decision Making. Academy of Management Review, 15(1), 47-71.

[17] F. Tsung. 2000. Impact of Information Sharing on Statistical Quality Control. IEEE Trans. on Systems, Man and Cybernetics – PART A: Systems and Humans, 30(2), 211-216.

[18] A. Pete, K.R. Pattipati, D.L. Kleinman, Y.N. Levchuk. 1988. An Overview of Decision Networks and Organizations. IEEE Trans. on Systems, Man and Cybernetics, 28, 172-192.

[19] F. Taylor. 1947. Scientific Management. Harper & Brothers, New York (NY).

[20] M.D. Giudice and V. Maggioni. 2014. Managerial practices and operative directions of knowledge management within inter-firm networks: A global view, Journal of Knowledge Management, 18(5), 841-846, 2014.

[21] J. Bolton, K. Kim, R. Vertegaal. 2012. A Comparison of Competitive and Cooperative Task Performance Using Spherical Flat Displays, Proc. of CSCW 2012, 529-538, Seattle (US), Feb. 2012.

[22] M. Weber. 1968. Economy and Society: An Interpretive Sociology. Bedminister Press, New York (NY).

[23] J.A. LePine, J.R. Hollenbeck, D.R. Ilgen, J. Hedlund. 1997. Effects of individual differences on the performance of hierarchical decision-making teams. Journal of Applied Psychology, 82(5), 803- 811.

[24] P. Bolton and M. Dewatripont. 1994. The Firm as a Communication Network. Quarterly Journal of Economics, 109(4), 809-838.

Cite this paper

Chiara Francalanci, Paolo Giacomazzi. (2016) Evaluating the Economic Implications of Information Systems: A Formal Model of Information Processing Capacity. International Journal of Computers, 1, 242-251


Copyright © 2017 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0