Nolan's State Hypothesis on the assimilation of computer technology by organizations provides one of the most popular frameworks for describing and managing the growth in corporate data processing. The model has achieved a high level of acceptance despite little formal evidence of its reliability or robustness. One previously published test was unable to con firm the predicted S-shared growth curve for EDP budgets. Our study of 273 large Canadian organizations tested another prediction of the Stage Hypothesis--that more "mature" DP groups would be more likely to have a formal Data Administration function than less "mature ones--and fai led to find the hypothesized relationship. Further analysis of the results revealed that the var iables used to assess DP maturity do not exhibit a sufficient degree of intercorrelation for them to be considered aspects of a common construct. These results cast considerable doubt on a basic premise of the Stage Hypothesis.