Operations Management in the Information Economy: Information Products, Processes, and Chains

Journal of Operations Management, Vol. 25, No. 2, pp. 438-453, March 2007

16 Pages Posted: 17 Jan 2008

See all articles by Uday S. Karmarkar

Uday S. Karmarkar

University of California, Los Angeles (UCLA) - Anderson School of Management

Uday Apte

affiliation not provided to SSRN

Abstract

The process of economic evolution from agriculture to manufacturing to services is nearing its end in the U.S. and other developed economies. Another major evolution along a different dimension is now underway: it is from a material-based economy to an information-based economy. In the past, the product-service dichotomy has proved useful as an organizing principle for the study of operations management. Today, however, a material-information categorization of products and services appears to be equally important and useful. The information sector now comprises the major share of the U.S. private economy and includes many of the largest industrial sectors and firms. We discuss the implications of this evolution for research and teaching in operations management (OM).

The basic questions addressed here are: In what ways are information products, services, processes and chains similar to, or different from, those in the material world? To what extent is it possible to manage operations in information industries using the existing operations management concepts and techniques? The conclusions are mixed. To a great extent, traditional concepts are indeed applicable and useful. However, there are significant differences. For example, quantification and measurement pose a fundamental problem in the study of information industries. As a result, there are difficulties in analyzing some of the most basic OM issues related to productivity, cost, value, and transformation. Nevertheless, the process-centric methods of operations management can be quite effective in analyzing firms and industries that produce information goods and services. An understanding of process economics and information chains is also central to the analysis of competition given the impact of new technologies on processes, firms, information chains and information industries. We conclude that while there is much in the information sector that can be addressed with our current toolkit, some very interesting and challenging issues still remain open for research. From the perspective of management education too, operations management in the information economy is an area of growing importance, with some easy wins and some significant challenges.

Keywords: Information economy, Information products, Information processes, Information chains, Information intensive services

Suggested Citation

Karmarkar, Uday S. and Apte, Uday, Operations Management in the Information Economy: Information Products, Processes, and Chains. Journal of Operations Management, Vol. 25, No. 2, pp. 438-453, March 2007, Available at SSRN: https://ssrn.com/abstract=1084970

Uday S. Karmarkar (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Uday Apte

affiliation not provided to SSRN ( email )

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