The research presented in this paper demonstrates that Katz and Kahn's (1966) distinction between people-processing and object-processing organizations is a useful classification scheme that can help explain differences in organizational communication systems. To assess the usefulness of Katz and Kahn's scheme, data derived from a sample of more than 4,000 organizations in Wisconsin were analyzed to determine whether the structure and function of communication systems used by people-processing and object-processing organizations vary systematically. The analysis focused on variances in measures of the structure and function of the water-use (task-oriented) communication systems used by these different types of organizations. The research findings support the proposition that an organization's through-put will significantly influence the structure and function of the organization's task-oriented communication system. Object-processing organizations in this study scored significantly higher on the data acquisition index than people-processing organizations. Also, the evidence indicates that object-processing organizations place much more emphasis on data transportation than do people-processing organizations, probably due to the immediate demands of the marketplace. (LL)