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Information Processing in the Theory of the Firm: The Rise of General Motors

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  • Seth Norton

Abstract

This article reviews alternative theories of the firm and their relationship to the spectacular rise of General Motors during the 1920s. The article examines the degree of synchronization of GM's sales to dealers with dealers' sales to final consumers, both before and after Alfred Sloan's forecasting and information processing reforms. It also examines the link between the synchronization and GM's performance during the period. The data document a dramatic improvement in GM's information processing capabilities and a direct link between those capabilities and GM's profitability.

Suggested Citation

  • Seth Norton, 2004. "Information Processing in the Theory of the Firm: The Rise of General Motors," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 11(2), pages 123-140.
    • Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:123-140
    DOI: 10.1080/1357151042000222483
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    References listed on IDEAS

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    1. Masten, Scott E. (ed.), 1996. "Case Studies in Contracting and Organization," OUP Catalogue, Oxford University Press, number 9780195092523.
    2. Chandler, Alfred D., 1990. "Scale and Scope: A Review Colloquium - Scale and Scope: The Dynamics of Industrial Capitalism. By Alfred D. ChandlerJr., with Takashi Hikino · Cambridge, Mass.: Harvard University Press, 1990. xix + 8," Business History Review, Cambridge University Press, vol. 64(4), pages 690-735, January.
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    Cited by:

    1. Chandna, Vallari & Salimath, Manjula S., 2018. "Peer-to-peer selling in online platforms: A salient business model for virtual entrepreneurship," Journal of Business Research, Elsevier, vol. 84(C), pages 162-174.

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