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Multiscale decision-making: Bridging organizational scales in systems with distributed decision-makers

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  • Wernz, Christian
  • Deshmukh, Abhijit

Abstract

Decision-making in organizations is complex due to interdependencies among decision-makers (agents) within and across organizational hierarchies. We propose a multiscale decision-making model that captures and analyzes multiscale agent interactions in large, distributed decision-making systems. In general, multiscale systems exhibit phenomena that are coupled through various temporal, spatial and organizational scales. Our model focuses on the organizational scale and provides analytic, closed-form solutions which enable agents across all organizational scales to select a best course of action. By setting an optimal intensity level for agent interactions, an organizational designer can align the choices of self-interested agents with the overall goals of the organization. Moreover, our results demonstrate when local and aggregate information exchange is sufficient for system-wide optimal decision-making. We motivate the model and illustrate its capabilities using a manufacturing enterprise example.

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  • Wernz, Christian & Deshmukh, Abhijit, 2010. "Multiscale decision-making: Bridging organizational scales in systems with distributed decision-makers," European Journal of Operational Research, Elsevier, vol. 202(3), pages 828-840, May.
    • Handle: RePEc:eee:ejores:v:202:y:2010:i:3:p:828-840
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    Cited by:

    1. Wernz, Christian & Deshmukh, Abhijit, 2012. "Unifying temporal and organizational scales in multiscale decision-making," European Journal of Operational Research, Elsevier, vol. 223(3), pages 739-751.
    2. Hui Zhang & Christian Wernz & Danny R. Hughes, 2018. "Modeling and designing health care payment innovations for medical imaging," Health Care Management Science, Springer, vol. 21(1), pages 37-51, March.
    3. Peter A. Beling, 2013. "Multi-scale decision making: challenges in engineering and environmental systems," Environment Systems and Decisions, Springer, vol. 33(3), pages 323-325, September.
    4. Aditya U. Kulkarni & Christian Wernz, 2020. "Optimal incentives for teams: a multiscale decision theory approach," Annals of Operations Research, Springer, vol. 288(1), pages 307-329, May.
    5. Christian Wernz & Yongjia Song & Danny R. Hughes, 2021. "How hospitals can improve their public quality metrics: a decision-theoretic model," Health Care Management Science, Springer, vol. 24(4), pages 702-715, December.
    6. Hui Zhang & Christian Wernz & Anthony D. Slonim, 2016. "Aligning incentives in health care: a multiscale decision theory approach," EURO Journal on Decision Processes, Springer;EURO - The Association of European Operational Research Societies, vol. 4(3), pages 219-244, November.
    7. Andrew Henry & Christian Wernz, 2015. "A multiscale decision theory analysis for revenue sharing in three-stage supply chains," Annals of Operations Research, Springer, vol. 226(1), pages 277-300, March.

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