Complexity, Robustness, and Performance: Trade-Offs in Organizational Design

Tinbergen Institute Working Paper No. 2002-048/1

56 Pages Posted: 2 Sep 2002

See all articles by Bauke Visser

Bauke Visser

Erasmus University Rotterdam - Department of Economics; Tinbergen Institute Rotterdam (TIR)

Date Written: April 2002

Abstract

This paper analyses the relationship between organizational complexity (the degree of detail of information necessary to correctly assign agents to positions), robustness (the relative loss of performance due to mis-allocated agents), and performance. More complex structures are not necessarily more profitable, but are less robust. One of the least complex structures always performs worst. Superior organizational performance may vanish completely due to mis-allocated agents. Organizational performance can be enhanced through training agents; re-assigning them when adequate knowledge about their characteristics is obtained through monitoring; simplifying the organizational structure; and influencing the environment. The trade-offs involved are analysed.

Suggested Citation

Visser, Bauke, Complexity, Robustness, and Performance: Trade-Offs in Organizational Design (April 2002). Tinbergen Institute Working Paper No. 2002-048/1. Available at SSRN: https://ssrn.com/abstract=316481 or http://dx.doi.org/10.2139/ssrn.316481

Bauke Visser (Contact Author)

Erasmus University Rotterdam - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+ 31 (0)10 40 81449 (81441) (Phone)
+ 31 (0)10 40 89149 (Fax)

Tinbergen Institute Rotterdam (TIR)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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