The Information Problems in Organizations: A Research Model for the Value of Information and Information Systems*

Abstract

ABSTRACT Growing recognition of the need for better management information system (MIS) theory and practice centers around problems with identifying the value of information and information systems in organizations. This paper addresses this issue by showing that existing theory in organizational economics and industrial organization directly relates to information problems in organizations (their nature, and their effects in terms of organization structure and performance). The paper categorizes these problems and associated theories into four distinct classes and shows that MIS research and practice can be mapped to information problems of each type. Because the economic theory pertinent to specific information problems includes the nature of the organizational response to information constraints, it also provides insight into the nature of the improvement to be realized if information constraints can be overcome. These improvements can then be interpreted as the value of the associated information systems which suggests using the resultant classification scheme to map between information problems and system value. The paper shows that this methodology provides a more appropriate level of focus than either traditional normative or business value methods, especially because many improvements have structural as well as performance consequences.