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Evaluation of Information Entropy in Organizational System

Author

Listed:
  • Minodora URSACESCU

    (The Bucharest University of Economic Studies, Romania)

  • Mihai CIOC

    (The Bucharest University of Economic Studies, Romania)

Abstract

Entropy, as a thermodynamic concept, indicates the degree of system disorganization. The concept of entropy is associated with a measure of disorder and uncertainty in a physical system that leads to progressive loss of the relationships that integrate a system. The study of entropy becomes relevant for organization systems, which are described as interconnected elements, having a defined goal, and interacting with a dynamic environment. These systems are essentially based on the acquisition and application of information to ensure their self-determination and future development. In such a context, the approach of entropy is related to the Information Theory, referring to a measure of the amount of information that exists in an organizational system. This paper discusses the concept of information entropy and proposes a manner to evaluate its level under the influence of certain events that reveals particular organizational aspects. A case study for testing the relationship between information and entropy in the case of a company has been elaborated. The findings reveal that the increasing of order within a company system, through highly structured states leads to low level of information entropy.

Suggested Citation

  • Minodora URSACESCU & Mihai CIOC, 2016. "Evaluation of Information Entropy in Organizational System," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 1(2), pages 82-91, December.
  • Handle: RePEc:rom:merase:v:1:y:2016:i:2:p:82-91
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    More about this item

    Keywords

    entropy; event; information entropy; organizational system; probability.;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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