Network Centralization and Collective Adaptability to a Shifting Environment

Ethan S. Bernstein (), Jesse C. Shore () and Alice J. Jang ()
Additional contact information
Ethan S. Bernstein: Harvard Business School, Organizational Behavior Unit, Boston, Massachusetts 02163
Jesse C. Shore: Questrom School of Business, Boston University, Boston, Massachusetts 02215
Alice J. Jang: Pamplin College of Business, Virginia Polytechnic Institute and State University, Blacksburg, Virginia 24061

Organization Science, 2023, vol. 34, issue 6, 2064-2096

Abstract: We study the connection between communication network structure and an organization’s collective adaptability to a shifting environment. Research has shown that network centralization—the degree to which communication flows disproportionately through one or more members of the organization rather than being more equally distributed—interferes with collective problem-solving by obstructing the integration of existing ideas, information, and solutions in the network. We hypothesize that the mechanisms responsible for that poor integration of ideas, information, and solutions would nevertheless prove beneficial for problems requiring adaptation to a shifting environment. We conducted a 1,620-subject randomized online laboratory experiment, testing the effect of seven network structures on problem-solving success. To simulate a shifting environment, we designed a murder mystery task and manipulated when each piece of information could be found: early information encouraged an inferior consensus, requiring a collective shift of solution after more information emerged. We find that when the communication network within an organization is more centralized, it achieves the benefits of connectivity (spread of novel better solutions) without the costs (getting stuck on an existing inferior solution). We also find, however, that these benefits of centralization only materialize in networks with two-way flow of information and not when information only flows from the center of the network outward (as can occur in hierarchical structures or digitally mediated communication). We draw on these findings to reconceptualize theory on the impact of centralization—and how it affects conformity pressure (lock-in) and awareness of diverse ideas (learning)—on collective problem-solving that demands adaptation.

Keywords: network centralization; adaptation; organizational structure; communication networks; social networks; problem-solving; dynamic environments; collective intelligence (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/orsc.2022.1584 (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:ororsc:v:34:y:2023:i:6:p:2064-2096

Access Statistics for this article

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