Friederike Wall

The (Beneficial) Role of Informational Imperfections in Enhancing Organisational Performance

The paper analyses the effects of imperfect information on organisational performance under the regime of alternative organisational settings. The analysis is based on an agent-based model which is an extended variant of the NK model. In the simulations, fitness measurements are distorted with imperfections according to information asymmetries that are related to differentiation and delegation of decision-making. The results indicate that the effects of informational imperfections on organisational performance subtly interfere with coordination mode, incentives and intra-organisational interactions. The results might throw some new light on imperfect information as in some organisational settings rather insignificant performance losses compared to perfectly informed decision-makers occur, and in some settings imperfect information turn out to be beneficial.

Agent-based modeling in managerial science: an illustrative survey and study

This article provides an overview of the current state of agent-based modeling in managerial science. In particular, the aim is to illustrate major lines of development in agent-based modeling in the field and to highlight the opportunities and limitations of this research approach. The article employs a twofold approach: First, a survey on research efforts employing agent-based simulation models related to domains of managerial science is given which have benefited considerably from this research method. Second, an illustrative study is conducted in the area of management accounting research, a domain which, so far, has rarely seen agent-based modeling efforts. In particular, we introduce an agent-based model that allows to investigate the relation between intra-firm interdependencies, performance measures used in incentive schemes, and accounting accuracy. We compare this model to a study which uses both, a principal-agent model and an empirical analysis. We find that the three approaches come to similar major findings but that they suffer from rather different limitations and also provide different perspectives on the subject. In particular, it becomes obvious that agent-based modeling allows us to capture complex organizational structures and provides insights into the processual features of the system under investigation.

Multiobjective Decision Making Policies and Coordination Mechanisms in Hierarchical Organizations: Results of an Agent-Based Simulation

This paper analyses how different coordination modes and different multiobjective decision making approaches interfere with each other in hierarchical organizations. The investigation is based on an agent-based simulation. We apply a modified NK-model in which we map multiobjective decision making as adaptive walk on multiple performance landscapes, whereby each landscape represents one objective. We find that the impact of the coordination mode on the performance and the speed of performance improvement is critically affected by the selected multiobjective decision making approach. In certain setups, the performances achieved with the more complex multiobjective decision making approaches turn out to be less sensitive to the coordination mode than the performances achieved with the less complex multiobjective decision making approaches. Furthermore, we present results on the impact of the nature of interactions among decisions on the achieved performance in multiobjective setups. Our results give guidance on how to control the performance contribution of objectives to overall performance and answer the question how effective certain multiobjective decision making approaches perform under certain circumstances (coordination mode and interdependencies among decisions).

Phrasing and Timing Information Dissemination in Organizations: Results of an Agent-Based Simulation

This paper analyzes how managers suffering from decision-making biases in interrelated decision processes affect the performance of an overall business organization. To perform the analysis, we utilize an NK-type agent-based simulation model, in which decision-making is represented by adaptive walks on performance landscapes. We find that organizational performance holds up well, if the decision problem breaks into disjointed sub-problems. If decisions are, however, highly cross-related between departments, the overall organization’s performance degrades, while both negatively phrasing information and relying more heavily on recently derived information account for an improvement. The effect of positively phrasing information that is relevant for decision-making works towards the same direction, but much more reluctantly. These results cautiously raise doubt about the claim that decision-making should always be as rational as possible.

Organizational dynamics in adaptive distributed search processes: effects on performance and the role of complexity

In this paper, the effects of altering the organizational setting of distributed adaptive search processes in the course of search are investigated. We put particular emphasis on the complexity of interactions between partial search problems assigned to search agents. Employing an agent-based simulation based on the framework of NK landscapes we analyze different temporal change modes of the organizational set-up. The organizational properties under change include, for example, the coordination mechanisms among search agents. Results suggest that inducing organizational dynamics has the potential to increase the effectiveness of distributed adaptive search processes with respect to various performance measures like the final performance achieved at the end of the search, the chance to find the optimal solution of the search problem, or the average performance per period achieved during the search process. However, results also indicate that the mode of temporal change in conjunction with the complexity of the search problem considerably affects the order of magnitude of these beneficial effects. In particular, results suggest that organizational dynamics induces a shift towards more exploration, i.e., discovery of new areas in the fitness landscape, and less exploitation, i.e., stepwise improvement.

Comparing Basic Design Options for Management Accounting Systems with an Agent-Based Simulation

The paper applies an agent-based simulation to investigate the effectiveness of basic design options for management accounting systems. In particular, different settings of how to improve the information base by measurement of actual values in the course of adaptive walks are analyzed in the context of different levels of complexity and coordination modes. The agent-based simulation is based on the idea of NK fitness landscapes. Results provide broad, but no universal support for conventional wisdom that lower inaccuracies of information lead to more effective adaptation processes. Furthermore, results indicate that the effectiveness of improving judgmental information by actual values subtly depends on the complexity of the decisions and the coordination mode applied.

Diversity of the Knowledge Base in Organizations: Results of an Agent-Based Simulation

The knowledge base used in organizations for decision-making usually is diverse due to various information systems or differing expertise of decisionmakers. By an agent-based simulation the paper analyzes the question which level of diversity in the knowledge base in an organization is beneficial. The findings indicate that the preferable level of diversity subtly depends on the need and the mode to coordinate decisions in organizations. However, the findings provide support to rather unify the knowledge base on a medium level of quality than fragmenting and specializing the knowledge base. Furthermore, it appears that learning and adjustment capabilities in decentralized structures are more promising than the investment in a knowledge base as perfect as possible.

Job selection in a network of autonomous UAVs for delivery of goods

This article analyzes two classes of job selection policies that control how a network of autonomous aerial vehicles delivers goods from depots to customers. Customer requests (jobs) occur according to a spatio-temporal stochastic process not known by the system. If job selection uses a policy in which the first job (FJ) is served first, the system may collapse to instability by removing just one vehicle. Policies that serve the nearest job (NJ) first show such threshold behavior only in some settings and can be implemented in a distributed manner. The timing of job selection has significant impact on delivery time and stability for NJ while it has no impact for FJ. Based on these findings we introduce a methodological approach for decision-making support to set up and operate such a system, taking into account the trade-off between monetary cost and service quality. In particular, we compute a lower bound for the infrastructure expenditure required to achieve a certain expected delivery time. The approach includes three time horizons: long-term decisions on the number of depots to deploy in the service area, mid-term decisions on the number of vehicles to use, and short-term decisions on the policy to operate the vehicles.

Effects of Organizational Dynamics in Adaptive Distributed Search Processes

In this paper, the effects of alternating the organizational setting of distributed adaptive search processes in the course of search processes are investigated. The organizational properties under change include, for example, the coordination mechanisms among agents. We analyze different temporal change modes using an agent-based simulation. Results suggest that inducing organizational dynamics has the potential to increase the effectiveness of search, but that the mode of change in conjunction with the complexity of the search problem considerably affects the order of magnitude of this beneficial effect.

Beneficial Effects Of Randomized Organizational Change On Performance

In this paper, we investigate the effects on performance of inducing organizational dynamics in collaborative search processes. Using an agent-based simulation, we analyze different temporal modes and levels of scope of change. The organizational properties under change are chosen randomly out of three dimensions of organizational design. Results suggest that inducing organizational dynamics has the potential to increase the effectiveness of search, but that the temporal change mode, the frequency and the scope of change in conjunction with the complexity of the search problem considerably affect the order of magnitude of this beneficial effect. The paper characterizes conditions under which different modalities of organizational change are beneficial.