Organizational Design and Resource Evaluation

A crucial problem of evaluating, discovering, and creating the value of resources remains at the center of the subject of business strategy. The present article draws on reliability theory to advance an analytical platform that can address part of this problem, the evaluation of resource value. Reliability theory offers a way to model managerial ability and to derive the evaluation properties of organizations, boards, teams and committees. It is shown how the problem of resource evaluation can be remedied by proper evaluation structures. An evaluation structure that is build out of a very few agents can achieve significant improvements. A simulation of the classical n-armed bandit problem shows how evaluation structures can help managers select innovations of better economic value.Reliability theory, resource value

Evaluation of Uncertain International Markets The Advantage of Flexible Organization Structures

The present article is concerned with organizational flexibility in transnational corporations (TNCs), i.e., larger firms that operate in multiple national markets. Contrasting prior research into entry modes (e.g. joint ventures, greenfield investments, or acquisitions), the present article examines the way the organization of evaluation teams can influence entry and exit decisions of business units. Empirical studies broadly support the claim that TNCs experiment with flexible organizational structures in response to increased levels of turbulence and uncertainty in international markets. However, these advances in the description of TNCs, and more generally in the literature on new organizational forms, have been largely ignored in our theories about evaluation of market opportunities in TNCs and multi-national corporations (MNCs). To address this gap in our knowledge, the present article examines the effects of flexible evaluation teams when TNCs assess the viability of international markets characterized by high levels of uncertainty. Remarkably, we show that TNCs employing flexible teams of (very) fallible evaluators can obtain profits at levels that asymptote optimality. Our main result supports the claim advanced in recent empirical studies. Structural flexibility can help TNCs employing (very) fallible evaluators achieve high levels of performance in conditions of turbulence and uncertainty.Multinational corporations, entry modes

The Human version of Moore-Shannon's Theorem: The Design of Reliable Economic Systems

Moore & Shannon's theorem is the cornerstone in reliability theory, but cannot be applied to human systems in its original form. A generalization to human systems would therefore be of considerable interest because the choice of organization structure can remedy reliability problems that notoriously plaque business operations, financial institutions, military intelligence and other human activities. Our main result is a proof that provides answers to the following three questions. Is it possible to design a reliable social organization from fallible human individuals? How many fallible human agents are required to build an economic system of a certain level of reliability? What is the best way to design an organization of two or more agents in order to minimize error? On the basis of constructive proofs, this paper provides answers to these questions and thus offers a method to analyze any form of decision making structure with respect to its reliability.Organizational design; reliability theory; decision making; project selection

Reference groups and variable risk strategies

The present article examines two important effects that have been given scant attention in prior studies of variable risk strategies. The first effect, reference group sensitivity, is the degree to which decision makers' aspirations are sensitive to their reference group. In this paper we compare the performances of decision makers with alternative levels of reference group sensitivity. Second, we introduce the novel concept of community effect. This relates to mobility among multiple segregated reference groups. The performance of decision makers residing in a world with one single population is compared with that of decision makers who have the possibility, which is more or less costly, to switch between multiple populations. The results support the findings from previous studies that variable risk strategies are preferred over fixed risk. The study of a community of populations provides additional insights that both support and complement previous research

Distribution of selected basidiomycetes in oceanic dwarf-scrub heaths in Paamiut area, low arctic South Greenland

The occurrence of 80 selected basidiomycetes (49 symbionts, 31 saprobionts) was investigated at seven sites in dwarf-scrub heaths in the Paamiut area (low arctic S Greenland). The sites are situated in the hyperoceanic zone (at the outer coast), in the oceanic zone (about 10-25 km from the outer coast) and in the suboceanic zone (more than 25 km from the outer coast). The number of species is larger in the oceanic than in the hyperoceanic zone, and there is a tendency for the proportion of symbionts to increase from the hyperoceanic zone and away from the coast. The total number of species indicates that the increase of symbionts in the oceanic zone is due to the larger number of Cortinarius and Russula species. Moreover, larger symbionts tend to dominate away from the coast. Observations from Paamiut peninsula (hyperoceanic zone) indicate that the number of saprobiontic species exceed the symbionts in the areas very close (< 3 km) to the ocean. Four distributional groups can be segregated based on the distributions in the Paamiut area. A: species most frequent in the hyperoceanic zone (nine symbionts and fourteen saprobionts), B: indifferent species (nine symbionts and five saprobionts), C: species most numerous and frequent in the oceanic zone (twenty-four symbionts and six saprobionts) and D: species most frequent in the suboceanic zone (two saprobionts). Cortinarius imbutus, Entolomafernandae and Pholiota scamba are new to the low arctic region