Information in Organizations as Signal and Symbol

TLDR

Formal rational‑choice theory predicts that information is sought only when its precision, relevance, and reliability justify its cost, yet empirical studies show organizations routinely collect more information than they use and continue to request additional data, a pattern difficult to explain by standard theory. The authors propose that this discrepancy arises because organizational contexts for information use differ from the assumptions of simple decision theory. They argue that information use is embedded in social norms that render it highly symbolic. The paper discusses implications of this symbolic, over‑information pattern. Acknowledgements: thanks to scholars and funding from the Spencer Foundation, Brookings Institution, Hoover Institution, and National Institute of Education.

Abstract

We are grateful for the comments of Kenneth Arrow, Kennette Benedict, Robert Biller, David Brereton, Louise Comfort, Jerry Feldman, Victor Fuchs, Anne Miner, J. Rounds, Alan Saltzstein, Guje Sevon, and J. Serge Taylor; for the assistance of Julia Ball; and for grants from the Spencer Foundation, Brookings Institution, Hoover Institution, and National Institute of Education. Formal theories of rational choice suggest that information about the possible consequences of alternative actions will be sought and used only if the precision, relevance, and reliability of the information are compatible with its cost. Empirical studies of information in organizations portray a pattern that is hard to rationalize in such terms. In particular, organizations systematically gather more information than they use, yet continue to ask for more. We suggest that this behavior is a consequence of some ways in which organizational settings for information use differ from those anticipated in a simple decision-theory vision. In particular, the use of information is embedded in social normsthat make it highly symbolic. Some of the implications of such a pattern of information use are discussed.