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148 Marshall Van Alstyne and Nathaniel BulkleyThe second section of the chapter develops a dozen broad hypothesesgoverning factors such as information search, coordination, risk, push, sharingincentives, know-how distribution, and network topology. The scope is limitedto the consideration of theories explaining how information management practicesmight influence individual output. For clarity of focus, it does not addressstrategic uses of information in a game theoretic or political sense. 1 Such questionstend toward the distribution of surplus while our interest centers on howsurplus is created. When information serves as an input, how does it connectto output?To breathe life into theory and illustrate each hypothesis, practical examplesare provided from an ongoing empirical study of output in the executivesearch industry. 2 Two firms are providing data that include six months of e-mail communications, one year of accounting data, online surveys, andpersonal interviews. A third firm also provided surveys, interviews, andmodest accounting data but ceased operations as an independent entity duringthis investigation. Survey response rates exceed 85 percent at three firms,while e-mail coverage exceeds 87 percent at two firms. 3 The virtue of executivesearch as a point of inquiry is that recruiting efforts involve complexwhite-collar professional tasks in a context where output is measurable andwhere information networks matter. Output can be measured in terms ofrevenue, duration, completion rate, and ability to multitask. Social networksalso help recruiters ascend industry learning curves as well as identify and vetviable candidates.WHAT IS PRODUCTIVITY?In this chapter, productivity refers to the definition of total factor productivityin economics: the difference between total real output product and total realfactor input (Jorgenson, 1995). Changes in the values of product and factorinput are separated into price and quality components. The definition is consistentwith a summary measure of performance based on the ratio of the totalvalue of output divided by the total value of input.Following the economic theory of production, firms are assumed to possessa means of transforming inputs into outputs. Different combinations of inputscan be used to produce specific levels of output, and the production functionis assumed to adhere to certain basic assumptions: Inputs and outputs arevalued at market prices and investments in fixed factors of production areapportioned as shares of input across time.Productivity increase is defined as an outward shift of feasible production(see figure 6.2b which shows increased production with the same resources).This is the difference between the rate of growth of real product and the rate