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The Structure of Problem-Solving Knowledge and the Structure of Organizations

  • Marengo, Luigi, et al

This work presents a rather general model of organizational problem-solving able to account for the relationships between problem complexity, decentralization of tasks and problem-solving efficiency. Whenever problem-solving requires the coordination of a multiplicity of interdependent elements, the varying degrees of decentralization of cognitive and operational tasks shape the solutions which can be generated, tested and selected. Suboptimality and path-dependence are shown to be ubiquitous features of organizational problem-solving. At the same time, the model allows a precise exploration of the possible trade-offs between decomposition patterns and search efficiency involved in different organizational architectures. Copyright 2000 by Oxford University Press.

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Article provided by Oxford University Press in its journal Industrial & Corporate Change.

Volume (Year): 9 (2000)
Issue (Month): 4 (December)
Pages: 757-88

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Handle: RePEc:oup:indcch:v:9:y:2000:i:4:p:757-88
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  1. Michael D. Cohen & Roger Burkhart & Giovanni Dosi & Massimo Egidi & Luigi Marengo & Massimo Warglien & Sidney Winter & with comments by Benjamin Coriat, 1995. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Working Papers 95-11-101, Santa Fe Institute.
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  4. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
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  7. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-96, September.
  8. Levinthal, Daniel A, 1998. "The Slow Pace of Rapid Technological Change: Gradualism and Punctuation in Technological Change," Industrial and Corporate Change, Oxford University Press, vol. 7(2), pages 217-47, June.
  9. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185.
  10. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
  11. Jean-Jacques Laffont & Jean Tirole, 1985. "The Dynamics of Incentive Contracts," Working papers 397, Massachusetts Institute of Technology (MIT), Department of Economics.
  12. Laffont, Jean-Jacques & Martimort, David, 1998. "Mechanism Design with Collusion and Correlation," IDEI Working Papers 81, Institut d'Économie Industrielle (IDEI), Toulouse.
  13. Scott E. Page, 1996. "Two measures of difficulty (*)," Economic Theory, Springer, vol. 8(2), pages 321-346.
  14. David, Paul A., 1994. "Why are institutions the 'carriers of history'?: Path dependence and the evolution of conventions, organizations and institutions," Structural Change and Economic Dynamics, Elsevier, vol. 5(2), pages 205-220, December.
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