Effects of organizational structure on performance : experimental results

Abstract : A multi-person, model-driven experiment has been designed on the basis of a mathematical model of distributed tactical decision making. Two organizational structures are used in the investigation: a parallel one and a hierarchical one. The performance of the organization is measured in terms of its response time and accuracy. These two measures represent team performance. In addition, the cognitive workload of decision makers (DMs) during the execution of the task is estimated because bounded rationality imposes a limitation on the human's capability for processing information and making decision. The results show that interaction among DMs compensates for differences in individual performance characteristics. Individual differences have more influence on performance in the organization in which DMs have more autonomy in making decisions than in the organization in which individual decisions are coupled with the decisions of other organization members. When available decreases, time pressure is introduced in the organization and DMs have to adjust their processing rate. 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 feasible workload. (jhd)