An Empirical Test of the Information Processing Theory

According to the propositions in the information processing theory, this study tests the relationship between task uncertainty and three organizational design strategies, i.e., creation of lateral relationships, investment in information systems, and creation of self-contained tasks. Data from 125 North American manufacturing firms are used and business environment uncertainty is employed to measure task uncertainty. Sourcing practice and delivery practice measure the creation of lateral relationships, while Information quality measures the investment in information systems. Also, just-in-time production and human resource management measure the creation of self-contained tasks. Regression analysis shows that business environment uncertainty has significant positive influence on sourcing practice, delivery practice, information quality, just-in-time production, and human resource management. While the information processing theory was proposed more than thirty years ago, this study empirically extends the relevance of information processing theory to today’s supply chain environment. DOI: 10.4018/978-1-4666-1601-1.ch071