COMPUTATIONAL APPROACH TO ORGANIZATIONAL DESIGN

Alexander Arenas, Roger Guimera, Joan R. Alabart, Hans-Joerg Witt and Albert Diaz-Guilera
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Alexander Arenas: Universitat Rovira i Virgili
Roger Guimera: Universitat Rovira i Virgili
Joan R. Alabart: Universitat Rovira i Virgili
Hans-Joerg Witt: Dow Chemical, Rhein Center
Albert Diaz-Guilera: Universitat de Barcelona

No 275, Computing in Economics and Finance 2000 from Society for Computational Economics

Abstract: The idea of the work is to propose an abstract and simple enough agent-based model for company dynamics, in order to be able to deal computationally and even analytically with the problem of organizational design. Nevertheless, the model should be able to reproduce the essential characteristics of real organizations.The natural way of modeling a company is as being a network where the nodes represent employees and the links between them represent communication lines. In our model, problems arise in the company from time to time and this problems have to be solved by one of the employees. While this problems remain unsolved, the productivity of the company decreases in such a way that we can identify efficiency of the organizational design with ability for solving problems in the minimum time.This time is not only dependent on the structure of the network, but also in the ability of the employees to communicate with each other. Thus, each link in the network has a certain quality related to the abilities and the availability of the two linked nodes. Actually we consider three factors as determining the capacity of a particular node:-Time availability: Time is, of course, one of the main ingredients, and affects the capacity in two different ways, let's say active and passive. By active we mean that if an employee is dealing with one problem, she can spend all the time in that problem; if she is dealing with two problems, she has to split her time in two and so on. By passive we mean that every connection established in the company has a cost in terms of time, no matter whether this connection is being used or not.-Capacity: Related to the passive time consumption, the capacity of an individual tunes the ability of an employee to avoid time waste when she establishes a link.-Feeling: Including other natural, biological and/or psycological factors.A close relation between the structure of a hierarchical network and the performance is observed, and the simplicity of the model allows us to find analytical expressions for the behaviour of the whole system.

Date: 2000-07-05
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