ABSTRACT
This chapter develops an integrated theoretical model, the Information Processing Theory (IPT) of organization. There are three major components of IPT: information, information processing, and the dynamic and cybernetic properties of systems. Conceptualizing organizations as streams of information and IP activities, linked dynamically as conceptualized by both cybernetics theory and systems theory (hereinafter "cybernetic systems theory"), is a unified way to understand organizational processes and outcomes. The conceptual approach of IP theory has continued to be represented as a small but persistent voice in the literature of organization and international business. Its conceptual place in this literature has often been only loosely related to other theories, however. The differentiation of an organization into dynamic components introduces a problem of integration and the nature of the linkages between the parts. Approaches taken to cope with risk require learning and feedback as part of organizational information processing, since there are often considerable time lags between processing and outcomes.
