IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v28y2007i1p13-26.html
   My bibliography  Save this article

Efficient organization of information processing

Author

Listed:
  • Jacek Cukrowski

    (United Nations Development Programme, Europe and the CIS Bratislava Regional Centre, Grosslingova 35, 81109 Bratislava, Slovak Republic)

  • Manfred M. Fischer

    (Institute for Economic Geography and GIScience, Vienna University of Economics and Business Administration, Nordbergstr 15|4|A, A-1090 Vienna, Austria)

Abstract

The paper examines the application of the concept of economic efficiency to organizational issues of collective information processing in decision making. Information processing is modeled in the framework of the dynamic parallel processing model of associative computation with an endogenous setup cost of the processors. The model is extended to include the specific features of collective information processing in the team of decision makers which may lead to an error in data analysis. In such a model, the conditions for efficient organization of information processing are defined and the architecture of the efficient structures is considered. We show that specific features of collective decision making procedures require a broader framework for judging organizational efficiency than has traditionally been adopted. In particular, and contrary to the results available in economic literature, we show that there is no unique architecture for efficient information processing structures, but a number of various efficient forms. The results indicate that technological progress resulting in faster data processing (ceteris paribus) will lead to more regular information processing structures. However, if the relative cost of the delay in data analysis increases significantly, less regular structures could be efficient. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Jacek Cukrowski & Manfred M. Fischer, 2007. "Efficient organization of information processing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 13-26.
    • Handle: RePEc:wly:mgtdec:v:28:y:2007:i:1:p:13-26
    DOI: 10.1002/mde.1305
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.1305
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.1305?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andrzej Baniak & Jacek Cukrowski, 1999. "Organizational restructuring in response to changes in information-processing technology," Review of Economic Design, Springer;Society for Economic Design, vol. 4(4), pages 295-305.
    2. Timothy Van Zandt, 1995. "Continuous Approximations in the Study of Hierarchies," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 575-590, Winter.
    3. Van Zandt, T., 1995. "Continuous approximations in the study of hierarchies," LIDAM Reprints CORE 1253, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Patrick Bolton & Mathias Dewatripont, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 809-839.
    5. Barton L. Lipman, 1995. "Information Processing and Bounded Rationality: A Survey," Canadian Journal of Economics, Canadian Economics Association, vol. 28(1), pages 42-67, February.
    6. Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters, in: Comparative Institutional Analysis, chapter 5, pages 57-58, Edward Elgar Publishing.
    7. Prat, Andrea, 1997. "Hierarchies of Processors with Endogenous Capacity," Journal of Economic Theory, Elsevier, vol. 77(1), pages 214-222, November.
    8. VAN ZANDT, Timothy, 1995. "Continuous Approximations in the Study of Hierarchies," LIDAM Discussion Papers CORE 1995002, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Catherine de Fontenay & Kieron J. Meagher, 2001. "original papers : Returns to scale in one-shot information processing when hours count," Review of Economic Design, Springer;Society for Economic Design, vol. 6(1), pages 113-124.
    10. Michael Keren & David Levhari, 1979. "The Optimum Span of Control in a Pure Hierarchy," Management Science, INFORMS, vol. 25(11), pages 1162-1172, November.
    11. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    12. Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-1146, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrea Patacconi, 2009. "Coordination and delay in hierarchies," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 190-208, March.
    2. Andrea Patacconi, 2005. "Optimal Coordination in Hierarchies," Economics Series Working Papers 238, University of Oxford, Department of Economics.
    3. Phillip J. Lederer & Xiaobo Zheng, 2021. "Can information economics explain the organization of productive facilities?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(3), pages 525-553, August.
    4. Van Zandt, Timothy, 2004. "Balancedness of Real-Time Hierarchical Resource Allocation," CEPR Discussion Papers 4276, C.E.P.R. Discussion Papers.
    5. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    6. Wouter Dessein & Tano Santos, 2003. "The Demand for Coordination," NBER Working Papers 10056, National Bureau of Economic Research, Inc.
    7. Cho, Myeonghwan, 2010. "Efficient structure of organization with heterogeneous workers," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1125-1139, November.
    8. Delmastro, Marco, 2002. "The determinants of the management hierarchy: evidence from Italian plants," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 119-137, January.
    9. Meagher, Kieron J., 2003. "Generalizing incentives and loss of control in an optimal hierarchy: the role of information technology," Economics Letters, Elsevier, vol. 78(2), pages 273-280, February.
    10. Jacek Cukrowski, "undated". "Parallel Computing: Technological Changes and Organizational Redesign," Computing in Economics and Finance 1996 _014, Society for Computational Economics.
    11. Nicholas Bloom & Luis Garicano & Raffaella Sadun & John Van Reenen, 2014. "The Distinct Effects of Information Technology and Communication Technology on Firm Organization," Management Science, INFORMS, vol. 60(12), pages 2859-2885, December.
    12. Paola Rovelli & Vincenzo Butticè, 2020. "On the organizational design of entrepreneurial ventures: the configurations of the entrepreneurial team," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(2), pages 243-269, June.
    13. René Brink & Pieter Ruys, 2008. "Technology driven organizational structure of the firm," Annals of Finance, Springer, vol. 4(4), pages 481-503, October.
    14. Lex Borghans & Bas Weel, 2006. "The Division of Labour, Worker Organisation, and Technological Change," Economic Journal, Royal Economic Society, vol. 116(509), pages 45-72, February.
    15. Grüner, Hans Peter, 2007. "Information Technology, Efficient Restructuring and the Productivity Puzzle," CEPR Discussion Papers 6109, C.E.P.R. Discussion Papers.
    16. Van Zandt, Timothy, 1995. "Hierarchical computation of the resource allocation problem," European Economic Review, Elsevier, vol. 39(3-4), pages 700-708, April.
    17. Dostie Benoit & Jayaraman Rajshri, 2012. "Organizational Redesign, Information Technologies and Workplace Productivity," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-41, February.
    18. Yingyi Qian & Gerard Roland & Chenggang Xu, 1999. "Coordinating Changes in M-form and U-form Organizations," William Davidson Institute Working Papers Series 284, William Davidson Institute at the University of Michigan.
    19. Thesmar, David, 2002. "Time Based Competition and Innovation," CEPR Discussion Papers 3293, C.E.P.R. Discussion Papers.
    20. Nathalie Greenan & Emmanuelle Walkowiak, 2005. "Informatique, organisation du travail et interactions sociales," Économie et Statistique, Programme National Persée, vol. 387(1), pages 35-63.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:28:y:2007:i:1:p:13-26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.