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The purpose of this paper is to investigate how information and communication technology (ICT) impacts firm performance, by changing the information processing ability of a firm.

It takes the firm as information processing unit to coordinate production in an industry with two‐stage production and demand uncertainty. ICT is assumed to improve the information processing ability. It models that, conditional on the structure of markets described by level of uncertainty, a firm with information processing ability comes into being endogenously from market‐coordinated production, with profit generated.

It is argued that the profit of the firm depends on both the structure of markets, and the firm's information processing ability. The improving information processing ability increases firm profitability as long as market‐coordinated production persists elsewhere. However, when the improving information processing ability enables enough firms to compete with no market‐coordinated production left, it decreases profitability of all firms. Finally, case studies on the wholesale and retail industry and the finance and insurance industry of ten OECD countries presents consistent evidence that ICT does not necessarily bring better performance.

This paper is an innovation based on several streams of literature to model a firm with the consideration of specialization, demand uncertainty, and information processing ability. It thus provides a different perspective on how ICT contributes to firm performance. It theoretically and empirically shows that such contributions are conditional on market structure of a certain industry.

The paper seeks to clarify the aesthetic and operational characteristics of UK boutique hotels so as to obtain a clearer definition of boutique hotels.

Since an official list of boutique hotels is not available, the study looked at 15 consortia recognised as operating bona fide boutique hotels by a few authoritative sources (e.g. Pricewaterhouse Coopers, the RAC). Web sites of each boutique hotel were scrutinised by content analysing vital operational characteristics and aesthetic features that were presented. A comparative analysis was then carried out with the findings and interviews obtained from four boutique hotel managers to establish the common characteristics of boutique hotels.

The paper describes the aesthetics and operational characteristics of UK boutique hotels, indicating what can be found in a boutique hotel. One of the many important findings of this study suggests that the majority of boutique hotels are not privately owned, contradicting previous studies.

The list of characteristics is not exhaustive, although the interest in UK boutique hotels is rather recent. The research method used in this study has not been used before, and it is therefore recommended that research on consumer perceptions of boutique hotels should help to augment and balance the findings of this study.

A meaningful and functional definition of boutique hotels will enable trade bodies and relevant associations to revise their grading systems, better serving the hotel industry, as well as business and leisure travellers.

This paper aims to give credibility to the sector so that not any hotel can claim to be boutique, as specific characteristics have to be fulfilled.