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A Theoretical Study of Organizational Performance Under Information Distortion

Author

Listed:
  • Kathleen M. Carley

    (Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

  • Zhiang Lin

    (Department of Management of Organizations, The Hong Kong University of Science & Technology, Hong Kong)

Abstract

How should organizations of intelligent agents be designed so that they exhibit high performance despite information distortion? We present a formal information-based network model of organizational performance given a distributed decision making environment in which agents encounter a radar detection task. Using this model, we examine the performance of organizations with various designs in different task environments subject to various types of information distortion. We distinguish five sources of information distortion---missing information, incorrect information, agent unavailability, communication channel breakdowns, and agent turnover. This formal analysis suggests that: (1) regardless of information distortion, performance is enhanced if there is a match between the complexity of organizational design and task environment; (2) task environment characteristics have more effect on performance than information distortion and the organizational design; (3) the effects of information distortion can be combated by training, but only to a limited extent; and (4) technology based information distortion typically is more debilitating than personnel induced information distortion.

Suggested Citation

  • Kathleen M. Carley & Zhiang Lin, 1997. "A Theoretical Study of Organizational Performance Under Information Distortion," Management Science, INFORMS, vol. 43(7), pages 976-997, July.
    • Handle: RePEc:inm:ormnsc:v:43:y:1997:i:7:p:976-997
    DOI: 10.1287/mnsc.43.7.976
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    Citations

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    Cited by:

    1. Lucio Biggiero & Enrico Sevi, 2009. "Opportunism by cheating and its effects on industry profitability. The CIOPS model," Computational and Mathematical Organization Theory, Springer, vol. 15(3), pages 191-236, September.
    2. John C. Butler & Jovan Grahovac, 2012. "Learning, Imitation, and the Use of Knowledge: A Comparison of Markets, Hierarchies, and Teams," Organization Science, INFORMS, vol. 23(5), pages 1249-1263, October.
    3. Y. I. Song & W. Woo & H. R. Rao, 2007. "Interorganizational information sharing in the airline industry: An analysis of stock market responses to code-sharing agreements," Information Systems Frontiers, Springer, vol. 9(2), pages 309-324, July.
    4. Zhiang (John) Lin & Xia Zhao & Kiran M. Ismail & Kathleen M. Carley, 2006. "Organizational Design and Restructuring in Response to Crises: Lessons from Computational Modeling and Real-World Cases," Organization Science, INFORMS, vol. 17(5), pages 598-618, October.
    5. Robin Cowan & Nicolas Jonard, 2023. "Modular organization and informal structure: Modularity, performance, and the alignment of organizational networks," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(1), pages 187-201.
    6. Dupouet, Olivier & Yildizoglu, Murat, 2006. "Organizational performance in hierarchies and communities of practice," Journal of Economic Behavior & Organization, Elsevier, vol. 61(4), pages 668-690, December.
    7. Sheen S. Levine & Mark Bernard & Rosemarie Nagel, 2018. "Strategic intelligence: The cognitive capability to anticipate competitor behaviour," Strategic Management Journal, Wiley Blackwell, vol. 39(2), pages 527-527, February.
    8. Edoardo Mollona & Andrea Marcozzi, 2009. "FirmNet: the scope of firms and the allocation of task in a knowledge-based economy," Computational and Mathematical Organization Theory, Springer, vol. 15(2), pages 109-126, June.
    9. Friederike Wall, 2023. "Modeling managerial search behavior based on Simon’s concept of satisficing," Computational and Mathematical Organization Theory, Springer, vol. 29(2), pages 265-299, June.
    10. Edoardo Mollona & Andrea Marcozzi, 2009. "Self-emerging coordination mechanisms for knowledge integration processes," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 8(2), pages 223-241, December.
    11. Jan W. Rivkin & Nicolaj Siggelkow, 2003. "Balancing Search and Stability: Interdependencies Among Elements of Organizational Design," Management Science, INFORMS, vol. 49(3), pages 290-311, March.
    12. Kathleen M. Carley, 1999. "On generating hypotheses using computer simulations," Systems Engineering, John Wiley & Sons, vol. 2(2), pages 69-77.
    13. Jan Thomsen & Raymond E. Levitt & John C. Kunz & Clifford I. Nass & Douglas B. Fridsma, 1999. "A Trajectory for Validating Computational Emulation Models of Organizations," Computational and Mathematical Organization Theory, Springer, vol. 5(4), pages 385-401, December.
    14. Hilal Atasoy & Emre M. Demirezen & Pei‐Yu Chen, 2021. "Impacts of Patient Characteristics and Care Fragmentation on the Value of HIEs," Production and Operations Management, Production and Operations Management Society, vol. 30(2), pages 563-583, February.
    15. Felipe A. Csaszar & J. P. Eggers, 2013. "Organizational Decision Making: An Information Aggregation View," Management Science, INFORMS, vol. 59(10), pages 2257-2277, October.
    16. Kent D. Miller & Shu-Jou Lin, 2015. "Analogical reasoning for diagnosing strategic issues in dynamic and complex environments," Strategic Management Journal, Wiley Blackwell, vol. 36(13), pages 2000-2020, December.
    17. Su-Jin Shin & Ahram Kang & Doyun Kim & Junseok Lee & Jang Won Bae & Il-Chul Moon, 2019. "Improving counterfire operations with enhanced command and control structure," Computational and Mathematical Organization Theory, Springer, vol. 25(4), pages 464-498, December.
    18. Simon Rodan, 2008. "Organizational learning: effects of (network) structure and (individual) strategy," Computational and Mathematical Organization Theory, Springer, vol. 14(3), pages 222-247, September.
    19. Luis Almeida Costa & João Amaro Matos, 2014. "Attitude change in arbitrarily large organizations," Computational and Mathematical Organization Theory, Springer, vol. 20(3), pages 219-251, September.
    20. Kathleen Carley & Michael J. Prietula & Zhiang (John) Lin, 1998. "Design Versus Cognition: the Interaction of Agent Cognition and Organizational Design on Organizational Performance," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 1(3), pages 1-4.
    21. Roopa Raman & Anandhi Bharadwaj, 2012. "Power Differentials and Performative Deviation Paths in Practice Transfer: The Case of Evidence-Based Medicine," Organization Science, INFORMS, vol. 23(6), pages 1593-1621, December.

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