Facts and Figuring: An Experimental Investigation of Network Structure and Performance in Information and Solution Spaces

35 Pages Posted: 22 Mar 2014 Last revised: 14 Jun 2014

Jesse Shore

Boston University, Questrom School of Business - Department of Information Systems

Ethan Bernstein

Harvard Business School - Organizational Behavior

David Lazer

Northeastern University - Department of Political Science; Harvard University - Harvard Kennedy School (HKS)

Date Written: June 1, 2014

Abstract

Using data from a novel laboratory experiment on complex problem solving in which we varied the network structure of 16-person organizations, we investigate how an organization’s network structure shapes performance in problem-solving tasks. Problem solving, we argue, involves both search for information and search for solutions. Our results show that the effect of network clustering is opposite for these two important and complementary forms of search. Dense clustering encourages members of a network to generate more diverse information, but discourages them from generating diverse theories: in the language of March (1991), clustering promotes exploration in information space, but decreases exploration in solution space. Previous research, generally focusing on only one of those two spaces at a time, has produced an inconsistent understanding of the value of network clustering. By adopting an experimental platform on which information was measured separately from solutions, we were able to bring disparate results under a single theoretical roof and clarify the effects of network clustering on problem-solving behavior and performance. The finding both provides a sharper tool for structuring organizations for knowledge work and reveals the challenges inherent in manipulating network structure to enhance performance, as the communication structure that helps one antecedent of successful problem solving may harm the other.

Keywords: networks, experiments, clustering, problem solving, exploration and exploitation, knowledge, information, communication, search

Suggested Citation

Shore, Jesse and Bernstein, Ethan and Lazer, David, Facts and Figuring: An Experimental Investigation of Network Structure and Performance in Information and Solution Spaces (June 1, 2014). Harvard Business School Organizational Behavior Unit Working Paper No. 14-075. Available at SSRN: https://ssrn.com/abstract=2412492 or http://dx.doi.org/10.2139/ssrn.2412492

Jesse Shore

Boston University, Questrom School of Business - Department of Information Systems ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

HOME PAGE: http://people.bu.edu/jccs/

Ethan S Bernstein (Contact Author)

Harvard Business School - Organizational Behavior ( email )

Soldiers Field
Boston, MA 02163
United States
6174964626 (Phone)
6174966554 (Fax)

HOME PAGE: http://www.hbs.edu/ebernstein

David Lazer

Northeastern University - Department of Political Science ( email )

Boston, MA 02115
United States
617-373-2796 (Phone)
617-373-5311 (Fax)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Taubman Center
Cambridge, MA 02138
United States
617-496-0102 (Phone)
617-496-1722 (Fax)

HOME PAGE: http://www.davidlazer.com

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