Effect of Organizational Structure on Performance of Decision Making Teams
Abstract
Distributed decision making (DDM) organizations consist of human decision makers (DMs) and equipment, structured so as to accomplish a set of given tasks. A multi-person, model-driven experiment has been designed to investigate the effect of organization structure on performance. The experiment has been designed on the basis of an existing mathematical model of interacting DMs and organizational structures. In the experiment, a distributed decision making environment was created. Two organizational structures were used in the investigation: a parallel organization and a hierarchical organization. The experimental results show that the variation in performance is less between different teams than between individual DMs within a team. Therefore, organizational performance is more predictable than individual performance. Interaction among DMs in an organization compensates for differences in individual performance characteristics. The main controlled variable in the experiment was the available time for perform a task. Decrease in available time introduced time pressure. The experimental results confirm a hypothesis which predicts that with decreasing available time, a significant degradation of performance occurs first in the organization which has the highest minimum required workload. These results are consistent with the findings from the theoretical model. Furthermore, the critical value of the ratio of response time to available time for doing a task is an observable measure of the bounded rationality constraint and can be used as a key parameter in organization design.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 01, 1990
- Accession Number
- ADA223160
Entities
People
- Victoria Y. Jin
Organizations
- Massachusetts Institute of Technology