Seminars @ NDSSL

Title: Network organizations in a volatile environment

Presenter: Dr. Fernando Vega-Redondo
Department of Economics, University of Alicante/University of Essex

Date and Time: Tuesday May 15, 2007, 3:00 - 4:00PM

Abstract:

An organization is modeled as a network whose pattern of links defines the channels of communication and exploration through which their constituent units (agents) search for new possibilities and solutions in response to a changing environment. We address the issue of optimal organizational (network) design in two polar scenarios. In one of them, the network is assumed fixed as the environment changes, and search is subject to the threat of congestion. This scenario best corresponds to the problem of finding the optimal formal chart of the organization, whose architecture is bound to be quite stable over time. Alternatively, we consider a context where the links are quite flexible and they do evolve as the environment changes. This scenario is best viewed as modeling the informal network of the organization, whose links can adapt quite flexibly to varying needs and circumstances. In both cases, we find that there is sharp transition in the optimal design of the organization as the volatility of the environment changes. This suggests that the formal structure of organizations should be either very centralized or very decentralized, while its informal structure should either be very adaptable or very rigid. In our theoretical setup, that is, no intermediate arrangements ever qualify as optimal.

Seminar Location: The seminars are held at:
    Virginia Tech, Corporate Research Center
    1880 Pratt Drive, Building XV
    Seminar Room 2018, Second Floor
    Directions: Map (PDF)

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