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Modeling Organizational Adaptation as a Simulated Annealing Process

Author

Listed:
  • KATHLEEN M. CARLEY

    (Carnegie Mellon University)

  • DAVID M. SVOBODA

    (Carnegie Mellon University)

Abstract

Organizations can be characterized as complex systems composed of adaptive and intelligent agents. Organizational adaptation occurs through restructuring and learning. Organizations can be modeled using a dual-level model in which restructuring is modeled as a simulated annealing process and individual learning is modeled using a stochastic learning model and boundedly rational agents. Such a model is presented, and its behavior is illustrated using a virtual experiment where the type of organizational adaptation is varied. Results suggest that the organizational design and performance relationship may be chaotic, despite the simple rules of change. Simple restructuring rules lead to a wide range of emergent organizational structures that increases with individual adaptation. Organizations locate good designs (through chance and slow change) regardless of the agents' intelligence; however, emergent designs depend on adaptability. Design features are not systematically related to performance; rather, small initial differences in design and environment can affect the emergent behavior.

Suggested Citation

  • Kathleen M. Carley & David M. Svoboda, 1996. "Modeling Organizational Adaptation as a Simulated Annealing Process," Sociological Methods & Research, , vol. 25(1), pages 138-168, August.
    • Handle: RePEc:sae:somere:v:25:y:1996:i:1:p:138-168
    DOI: 10.1177/0049124196025001005
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    References listed on IDEAS

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    Cited by:

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    2. Karén Hovhannisian & Marco Valente, 2005. "Modeling Directed Local Search Strategies on Technology," Computational Economics 0507001, University Library of Munich, Germany.
    3. Piórkowska Katarzyna, 2016. "Behavioural strategy: Adaptability context," Management, Sciendo, vol. 20(1), pages 256-276, May.
    4. Bill McKelvey & Benyamin B. Lichtenstein & Pierpaolo Andriani, 2012. "When organisations and ecosystems interact: toward a law of requisite fractality in firms," International Journal of Complexity in Leadership and Management, Inderscience Enterprises Ltd, vol. 2(1/2), pages 104-136.
    5. Michael Lenox, 1998. "Organizational Design and the Acquisition of Rent-Producing Resources," Research in Economics 98-06-051e, Santa Fe Institute.
    6. Nicolaj Siggelkow & Daniel A. Levinthal, 2003. "Temporarily Divide to Conquer: Centralized, Decentralized, and Reintegrated Organizational Approaches to Exploration and Adaptation," Organization Science, INFORMS, vol. 14(6), pages 650-669, December.

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