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Complexity, Robustness, and Performance

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  • B. Visser

    (Erasmus University Rotterdam)

Abstract

This paper analyses the relationship between organizational complexity ( the degree of detail of information necessary to correctly assign agents to positions), robustness (the relative loss of performance due to mis-allocated agents), and performance. More complex structures are not necessarily more profitable, but are less robust. One of the least complex structures always performs worst. Superior organizational performance may vanish completely due to mis-allocated agents. Organizational performance can be enhanced through training agents; re-assigning them when adequate knowledge about their characteristics is obtained through monitoring; simplifying the organizational structure; and influencing the environment. The trade-offs involved are analysed.

Suggested Citation

  • B. Visser, 2002. "Complexity, Robustness, and Performance," Tinbergen Institute Discussion Papers 02-048/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20020048
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    File URL: https://papers.tinbergen.nl/02048.pdf
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    References listed on IDEAS

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    1. Sah, Raaj Kumar & Stiglitz, Joseph E, 1986. "The Architecture of Economic Systems: Hierarchies and Polyarchies," American Economic Review, American Economic Association, vol. 76(4), pages 716-727, September.
    2. Ioannides, Yannis M., 1987. "On the architecture of complex organizations," Economics Letters, Elsevier, vol. 25(3), pages 201-206.
    3. Ruth Ben-Yashar & Shmuel Nitzan, 2001. "The robustness of optimal organizational architectures: A note on hierarchies and polyarchies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 155-163.
    4. Visser, Bauke, 2000. "Organizational communication structure and performance," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 231-252, June.
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    Cited by:

    1. Auke Hoekstra & Maarten Steinbuch & Geert Verbong, 2017. "Creating Agent-Based Energy Transition Management Models That Can Uncover Profitable Pathways to Climate Change Mitigation," Complexity, Hindawi, vol. 2017, pages 1-23, December.

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