Firm Structure, Search and Environmental Complexity

Nobuyuki Hanaki and Jason Barr

No 222, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: In this paper we explore the information processing problem of the firm by modeling the firm as type of network, which is comprised of two kinds of agents, 'searchers' and 'managers.' The searchers explore the external environment and report the information to the managers. We explore the role of centralization/decentralization in organizational structure to see how it affects firm performance. Centralization is defined in terms of the level at which decisions are made. We assume the information processing organization is arranged hierarchically, but that decisions can be made at different levels, and thus centralization directly relates to the quantity of information used in making a decision. We model the external environment as an NK landscape. Via simulations, we explore which type of organizational structure and level of decision making maximizes firm profits, given the complexity of the environment

Keywords: Organizational Structure; Decentralization; NK Landscape; Firm Search (search for similar items in EconPapers)
JEL-codes: C63 D21 D83 (search for similar items in EconPapers)
Date: 2005-11-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repec.org/sce2005/up.8366.1107106407.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf5:222

Access Statistics for this paper

More papers in Computing in Economics and Finance 2005 from Society for Computational Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().