Information processing capacities of the firm

Hideshi Itoh*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)


We analyze the informational structure of a one-top and one-subordinate organization of the firm facing an uncertain environment. Before the realization of the true state, the top manager must choose the information processing capacity of the subordinate, which is an ability to discern the local aspect of the environment and depends upon the global aspect of the environment observed by the top manager. We examine how uncertainty in the environment affects the degree of specialization in the optimal capacity and the amount of knowledge resources in the firm, and discuss its implications for comparisons between Japanese management and American management. J. Japan. Int. Econ., September 1987, 1(3), pp. 299-326. Graduate School of Business, Stanford University, Stanford, CA 94305.

Original languageEnglish
Pages (from-to)299-326
Number of pages28
JournalJournal of The Japanese and International Economies
Issue number3
Publication statusPublished - 1987 Sept
Externally publishedYes

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations


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