The dynamics of organizational structures and performances

In this chapter we analyze the characteristics and dynamics of organizations wherein members diverge in terms of the capabilities and visions they hold, and the interests which they pursue. In particular we examine how different forms of power can achieve coordination among such diverse capabilities, visions and interests while at the same time ensuring control and allowing mutual learning. By means of a simple simulation model of collective decisions by heterogeneous agents, we will examine three different forms of power, ranging from the power to design the organization, to the power to overrule by veto the decisions of others, to the power to shape the very preferences of the members of the organization. We study the efficiency of different balances between the three foregoing mechanisms, within a framework in which organizations indeed “aggregate” and make compatible different pieces of distributed knowledge, but the causation arrow also goes the other way round: organizations shape the characteristics and distribution of knowledge itself, and of the micro “visions” and judgments.