The main purpose of the research was to investigate the relationship, if any, between the nature of the information a business unit processes in conducting transactions on a daytoday basis with its customers, its business strategy and the organisation structures it adopts.

The research has demonstrate that measuring the information content of the operational transaction flow along three orthogonal dimensions

Scale

The number of transactions done

Complexity

The information content of each individual transaction

Diversity

The number of different types of transaction

provides a useful mechanism capable of identifying similar organisations across different industries and marketplaces.

The total variety (V) of the information processed by an organisation

V= (ƒScale)2+(ƒComplexity)2+(ƒDiversity)2

is surprisingly consistent across all the disparate organisations studied, suggesting that there is an effective limit to the maximum variety that any one business unit can deal with. No organisation was above the average for all three dimensions, and only three (out of 52) were below the average on all three dimensions. This implies that organisations are, explicitly or implicitly, making choices as to the way in which they deploy their available variety.

The absolute level of variety measured in the organisations correlated with the organisations reported Operating Margin % suggesting that organisations that increase their information processing capability benefit from increased operational performance.

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