This paper answers the question, “Why do organizations process information?” Uncertainty and equivocality are defined as two forces that influence information processing in organizations. Organization structure and internal systems determine both the amount and richness of information provided to managers. Models are proposed that show how organizations can be designed to meet the information needs of technology, interdepartmental relations, and the environment. One implication for managers is that a major problem is lack of clarity, not lack of data. The models indicate how organizations can be designed to provide information mechanisms to both reduce uncertainty and resolve equivocality.

A field study of middle- and upper-level managers was undertaken to explain managers’ selection of communication media. The findings indicate that media vary in their capacity to convey information cues. Managers prefer rich media for ambiguous communications and less rich media for unequivocal communications. The data suggest that high performing managers are more sensitive to the relationship between message ambiguity and media richness than low performing managers. Implications for managers’ use of information systems and electronic media are discussed.