Organizational Response: The Cost Performance Tradeoff

Zhiang Lin and Kathleen M. Carley
Additional contact information
Zhiang Lin: The Hong Kong University of Science & Technology, Department of Management and Organizations, Clear Water Bay, Kowloon, Hong Kong
Kathleen M. Carley: Carnegie Mellon University, Department of Social and Decision Sciences, Pittsburgh, Pennsylvania 15213

Management Science, 1997, vol. 43, issue 2, 217-234

Abstract: Organizations constantly face a dynamic environment where they must respond both quickly and accurately in order to survive. In this paper, we examine the issue: do organizations need to employ costly designs in order to exhibit high performance in a dynamic situation. In the context of a computational framework we derive a set of logically consistent propositions about the interrelationship among task, opportunities for review, training, and cost and their relative impact on organizational performance. Our analyses indicate that complex organizational designs have drawbacks and design is often not the dominant factor affecting performance. The relationship between organizational complexity (hence cost) and performance is complex and depends on the level of time pressure, training, and the task environment. Within the context of the computational framework, we find that the benefits of re-thinking decisions and of matching the organizational design to the task environment are questionable. Further, these results suggest that applying scarce resources to mitigate the adverse impact of time pressure may have more impact on performance than using those resources to support a more complex organizational design.

Keywords: decision making accuracy; cost; opportunity for review; organizational design; simulation; task environment; time pressure; training (search for similar items in EconPapers)
Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.43.2.217 (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:inm:ormnsc:v:43:y:1997:i:2:p:217-234

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().