Correspondence: Speculations on the use of shannon's entropy formula to characterize an organizational structure (university of cincinnati)

Abstract

AbstractFrom Shannon's informational entropy formula, a power index for each organizational unit and an organizational efficiency were developed for the structure of a corporation. Of the four models tested, it was shown that a horizontal configuration is most efficient, a chaos model least. Chaos occurs when each unit is completely independent and has the same budget. These concepts were applied to the University of Cincinnati to show that the efficiency diminished from 81 to 74% during its 1962–1963 through 1979–1980 period of rapid expansion when the budget increased four‐fold (corrected for inflation). At the same time, students enrolled, per dollar (corrected for inflation), declined by about 50%.