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Complexity and organizational architecture

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  • Ioannides, Yannis M.

Abstract

This paper examines how features of organizational architecture, with organizations whose members screen projects, affect organizational screening performance. The paper explores consequences for organizational design of a theorem (attributed to Von Neumann by Moore and Shannon) on how to build reliable networks using unreliable components. The paper examines general properties of committee decision making and shows the superiority of committees with respect to composition, that is when each member of organization is replaced by a replica of the entire organization. The paper links with the modern Condorcet Jury Theorem literature. It also shows that organizational screening performance is sigmoid in individual screening performance for hierarchies of polyarchies and for polyarchies of hierarchies. The supermodularity and sub-modularity properties of organizations’ screening performance allows us to link with results from the theory of teams. When agents are heterogeneous, hierarchies favor sorting and polyarchies favor mixing.

Suggested Citation

  • Ioannides, Yannis M., 2012. "Complexity and organizational architecture," Mathematical Social Sciences, Elsevier, vol. 64(2), pages 193-202.
    • Handle: RePEc:eee:matsoc:v:64:y:2012:i:2:p:193-202
    DOI: 10.1016/j.mathsocsci.2012.04.005
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    3. Mateos-Garcia, Juan, 2017. "To Err is Algorithm: Algorithmic fallibility and economic organisation," SocArXiv xuvf9, Center for Open Science.

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    More about this item

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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