Abstract

This article examines the role of advanced information technologies, particularly computer‐integrated manufacturing (CIM), in coordinating manufacturing activities. Our focus is on understanding the nature of changes in organizational structure and processes that are a result of, or are associated with, the introduction of CIM systems. The analysis is premised on the observation that coordination tasks are largely related to the acquisition and processing of information and are, therefore, sensitive to the application of information technology. Economic theories of organization facilitate the development of the relationships between information costs and the attributes of organizations. We use a model of a manufacturing firm, which incorporates elements of these theories, to study the organizational implications of CIM systems.