Have you ever wondered how we are able to remember certain things that happened to or with us a long time back?

Do you know how and why we tend to remember a few things only for a short period of time?

Some memories stay with us forever while some leave our systems after a certain time.

In an organizational context, a strong memory is directly proportional to better results. Why? Because when you are able to retain important information, you are able to make better decisions.

In this article, we will discover information processing theory, its application in businesses, benefits, and limitations.

Let’s start off with a basic definition of the theory.

What Is Information Processing Theory?

Information processing theory is a cognitive theory that explains how information is encoded in our memory. The theory further explains the following:

  • How does our brain filter information?
  • What do we pay attention to in the present moment?
  • What gets stored in our short-term and long-term memory?

According to the information processing theory, long-term memory develops in three stages. Let’s first look at the definitions of all three types of memory:

Sensory memory: Everything that we see, hear, taste, feel in the present moment is perceived through it
Short term memory: Memory that we use to remember things for a short duration
Long term memory: This type of memory is permanently stored in our brains

Now let’s move on to understanding the origin of this theory.

History of Information Processing Theory

The information processing theory was developed by American psychologists in the 1950s. In recent year, this theory has compared the human brain to the computer. The input is the information we give to a human brain or computer, the CPU is linked to a short-term memory while the hard drive is our long-term memory. Fascinating isn’t it?

The cognitive processes in our brain filter information to see what is important from the sensory memory to save in the short term memory and from there to the long term memory. For clarity, cognitive processes include thinking, remembering, recognition, perception, logical reasoning, imagining, planning, problem-solving, and our sense of judgment.

In a corporate environment when employees are given training, it is important that it gets stored in their long-term memory.

Examples of Information Processing Theory

Create Memories Using Different Stimuli

The first stage of the information processing theory is sensory memory. As the word suggests, it means what we experience through our senses such as sight, taste, listening, touch, or smell. sight and hearing are considered to be the most important ones.

In an organization, if you’re demonstrating a product sample to your employees, you can do it in a number of ways.

  • The first option is to explain the product and its benefits verbally. This is called an echoic memory as employees have their hearing seen activated.
  • Next, you can represent it visually maybe through a slide deck. This creates an iconic memory
  • Finally, you can pass around the product sample so that can employees can feel it.

The advantage of presenting information in different ways is that you get to appeal to everyone’s strengths. For example, some employees may retain information better through visual representation while others do it better when they have the product right in front of them. All in all, you’re basically increasing the likelihood of information retention by employees.

The Role of  Short-Term or Working Memory

The information once given to us is filtered from our sensory memory to our working or short-term memory.  From this point on, we process the information further. Some of the information in our short-term memory is filtered and discarded whereas some stays and is encoded in our long-term memory.

There are several factors that impact how we process information in our working memory:

  • Our individual cognitive abilities
  • Amount of information we’re being asked to remember
  • How focused and attentive we are to certain information?

Humans possess the ability to sharpen their focus and attention to information that is very important. In that case, they use selective processing to shift attention to details that they would want to remember in the future.

An important factor to consider here is repetition. If you want your employees to remember a certain point about a product or training, then repeating it several times will encode it in their long-term memory.

Encoding Information Into Long-Term Memory

Information Processing Theory Model


Information is filtered out in each processing stage. Therefore, as a trainer or manager, you should deploy certain strategies to ensure that your employees understand a topic in depth.

Break Information Into Smaller Parts

If you have called a meeting where the agenda is to give a product tutorial, then you may want to conduct this session in breaks. Giving a product tutorial is a comprehensive task where you have to explain everything in detail. If you want your audience to understand and retain the information, break the presentation into parts. If there is a certain aspect that is lengthy, break that down too. Moreover, go slow. Give your audience plenty of mini-breaks so that they are able to process information.

The same applies when holding workshops or training. A gradual pace with several mini-breaks will do the job even better.

Make It Meaningful

Whatever information you deliver, make sure it is meaningful. You can do so by associating them with real-life scenarios or personal experiences.

Connect the Dots

An even better strategy is to communicate the information by connecting it to what was previously taught or delivered and then connecting it to future lessons. This will optimize the chances of the information being encoded in the long-term memory.

Keep Repeating

We have already mentioned it earlier in this article. You can repeat a piece of information in a different way and format each time. A lecture can be augmented by showing an image or the product at hand in reality. You will be surprised how well the employees will retain the knowledge in their long-term memory.

Limitations of Information Processing Theory

Just like other theories, information processing theory has its pitfalls too. Let’s have a look at a few:

Limited Analogy Between Computer and Human

Firstly, how much and how well a human brain processes information depends on several other factors such as emotions and motivation. On the contrary, a computer is devoid of them.

Secondly, there is a quantity gap between the human brain and the computer. This means that the former can accommodate processes that the former can not.

Lastly, a human brain’s capacity to process information is way better than that of a computer.

The Serial Processing is Limited

Serial processing means that one process needs to be completed before the next one begins. This is similar to computer function hence the analogy.

However, a human mind is capable of parallel processing. This means the ability to process various inputs with differing quality.

Benefits of Information Processing Theory for Organizations

Information processing theory can be applied to organizations as well because organizations also process information as part of their functionalities.

An organization processes information in four stages. However, they don’t necessarily occur in chronological order.


Employees in an organization seek or receive information. The source of an information can either be internal or external. The internal source includes knowledge base in the company, experts, or performance appraisals from employees. External sources on the other hand include other entities or third-party experts.


Information in a company is stored in either

  • The human mind
  • Computers
  • Databases
  • Servers
  • Other forms of media

Storing is a crucial part of an information processing workflow because it lets employees access information as and when needed.


This stage occurs when employees want to transform or modify the stored information. This includes analyses, expansion, or compression in order to make important decisions.


This is the transfer of information to relevant stakeholders. The information can move from one of the three stages above.

Information processing theory help organizations in the following way:

  • Reduces uncertainty
  • Helps employees understand the task better and execute it appropriately
  • Improves efficiency
  • Employees are able to make well-informed decisions
  • Improves resource and change management
  • Minimizes potential issues
  • Relevant strategies can be formulated to improve workflow

information processing thery image

Current Areas of Research

Information processing theory is being currently applied to other industries and entities:

Artificial Intelligence (AI)

Information processing theory originates from cognitive psychology and is a result of the scientists’ desire to understand the human mind. AI aims to understand this theory and replicate the findings in machines such as natural language processing, information retrieval, memory encoding, etc.

Family Unit

This theory is also being used to understand family dynamics, culture, and relationships. It includes attending, sensing, and encoding stimuli in the family. A family unit then forms mutual and individual schemes that affect how information is processed and responded to.


In the previous section, we saw how this theory can be applied to study organizational behavior. The information processing theory plays a vital role in helping companies utilize business or market information, deciding which information is relevant, and formulating long-term strategies.

Key Takeaway

As a manager, you are well aware of the importance of processing information in the right manner. The way employees process and respond to information impacts an organization’s workflow considerably.

By putting this theory to its best use, you and your business can benefit substantially.

Apart from organizational benefits, this theory also increases our own knowledge base as well.

Information processing theory leaves us in awe of how fascinating a human mind is and sparks our curiosity to understand it even more.