Internal Markets for Supply Chain Capacity Allocation

This paper explores the possibility of solving supply chain capacity allocation problems using internal markets among employees of the same company. Unlike earlier forms of transfer pricing, IT now makes it easier for such markets to involve many employees, finegrained transactions, and frequently varying prices. The paper develops a formal model of such markets, proves their optimality in a baseline condition, and then analyzes various potential market problems and solutions. Interestingly, these proposed solutions are not possible in a conventional market because they rely on the firm's ability to pay market participants based on factors other than just the profitability of their market transactions. For example, internal monopolies can be ameliorated by paying internal monopolists on the basis of corporate, not individual, profits. Incentives for collusion among peers can be reduced by paying participants based on their profits relative to peers. Profit-reducing competition among different sales channels can be reduced by imposing an internal sales tax. And problems caused by fixed costs can be avoided by combining conditional internal markets with a pivot mechanism

Integrated information as a metric for group interaction

Researchers in many disciplines have previously used a variety of mathematical techniques for analyzing group interactions. Here we use a new metric for this purpose, called "integrated information" or "phi." Phi was originally developed by neuroscientists as a measure of consciousness in brains, but it captures, in a single mathematical quantity, two properties that are important in many other kinds of groups as well: differentiated information and integration. Here we apply this metric to the activity of three types of groups that involve people and computers. First, we find that 4-person work groups with higher measured phi perform a wide range of tasks more effectively, as measured by their collective intelligence. Next, we find that groups of Wikipedia editors with higher measured phi create higher quality articles. Last, we find that the measured phi of the collection of people and computers communicating on the Internet increased over a recent six-year period. Together, these results suggest that integrated information can be a useful way of characterizing a certain kind of interactional complexity that, at least sometimes, predicts group performance. In this sense, phi can be viewed as a potential metric of effective group collaboration

Integrated information as a metric for group interaction

Researchers in many disciplines have previously used a variety of mathematical techniques for analyzing group interactions. Here we use a new metric for this purpose, called "integrated information" or "phi." Phi was originally developed by neuroscientists as a measure of consciousness in brains, but it captures, in a single mathematical quantity, two properties that are important in many other kinds of groups as well: differentiated information and integration. Here we apply this metric to the activity of three types of groups that involve people and computers. First, we find that 4-person work groups with higher measured phi perform a wide range of tasks more effectively, as measured by their collective intelligence. Next, we find that groups of Wikipedia editors with higher measured phi create higher quality articles. Last, we find that the measured phi of the collection of people and computers communicating on the Internet increased over a recent six-year period. Together, these results suggest that integrated information can be a useful way of characterizing a certain kind of interactional complexity that, at least sometimes, predicts group performance. In this sense, phi can be viewed as a potential metric of effective group collaboration

Harnessing Crowds: Mapping the Genome of Collective Intelligence

Over the past decade, the rise of the Internet has enabled the emergence of surprising new forms of collective intelligence. Examples include Google, Wikipedia, Threadless, and many others. To take advantage of the possibilities these new systems represent, it is necessary to go beyond just seeing them as a fuzzy collection of “cool” ideas. What is needed is a deeper understanding of how these systems work. This article offers a new framework to help provide that understanding. It identifies the underlying building blocks—to use a biological metaphor, the “genes”—at the heart of collective intelligence systems. These genes are defined by the answers to two pairs of key questions: – Who is performing the task? Why are they doing it? – What is being accomplished? How is it being done? The paper goes on to list the genes of collective intelligence—the possible answers to these key questions—and shows how combinations of genes comprise a “genome” that characterizes each collective intelligence system. In addition, the paper describes the conditions under which each gene is useful and the possibilities for combining and re-combining these genes to harness crowds effectively. Using this framework, managers can systematically consider many possible combinations of genes as they seek to develop new collective intelligence systems. ∗ University of Maryland

ELECTRONIC MARKETS AND ELECTRONIC HIERARCHIES: EFFECTS OF INFORMATION TECHNOLOGY ON MARKET STRUCTUR CORPORATE STRATEGIES

This paper analyzes the fundamental changes in market structures that may result from the increasing use of information teChnology. First, an analytic framework is presented and its usefulness is demonstrated in explaining several major historical changes in American business structures. Then, the framework is used to help explain how electronic markets and electronic hierarchies will allow closer integration of adjacent steps in the value-added chains of our economy. The most surprising prediction is that information technology will lead to an overall shift toward proportionately more coordination by markets rather than by internal decisions within firms. Finally, several examples of companies where these changes are already occurring are used to illustrate the likely paths by which new market structures will evolve and the ways in which individual companies can take advantage of these changes

The Climate CoLab: Large scale model-based collaborative planning

The Climate CoLab is a system to help thousands of people around the world collectively develop plans for what humans should do about global climate change. This paper shows how the system combines three design elements (model-based planning, on-line debates, and electronic voting) in a synergistic way. The paper also reports early usage experience showing that: (a) the system is attracting a continuing stream of new and returning visitors from all over the world, and (b) the nascent community can use the platform to generate interesting and high quality plans to address climate change. These initial results indicate significant progress towards an important goal in developing a collective intelligence system - the formation of a large and diverse community collectively engaged in solving a single problem.Cisco Systems, Inc.Argosy FoundationMIT Energy InitiativeMIT Sloan Sustainability Initiativ

The Impact of Cognitive Style Diversity on Implicit Learning in Teams

Organizations are increasingly looking for ways to reap the benefits of cognitive diversity for problem solving. A major unanswered question concerns the implications of cognitive diversity for longer-term outcomes such as team learning, with its broader effects on organizational learning and productivity. We study how cognitive style diversity in teams-or diversity in the way that team members encode, organize and process information-indirectly influences team learning through collective intelligence, or the general ability of a team to work together across a wide array of tasks. Synthesizing several perspectives, we predict and find that cognitive style diversity has a curvilinear-inverted U-shaped-relationship with collective intelligence. Collective intelligence is further positively related to the rate at which teams learn, and is a mechanism guiding the indirect relationship between cognitive style diversity and team learning. We test the predictions in 98 teams using ten rounds of the minimum-effort tacit coordination game. Overall, this research advances our understanding of the implications of cognitive diversity for organizations and why some teams demonstrate high levels of team learning in dynamic situations while others do not. Keywords: teams; team learning; implicit coordination; collective intelligence; cognitive diversityNational Science Foundation (U.S.) (Grant IIS-0963451

Tools for Inventing Organizations: Toward a Handbook of Organizational Processes

This paper reports on the first five years of work in a project to address these problems by (1) developing methodologies and software tools for representing and codifying organizational processes at varying levels of abstraction, and (2) collecting, organizing, and analyzing numerous examples of how different groups and companies perform similar functions. The result of this work is an on-line process handbook which can be used to help people: (1) redesign existing business processes, (2) invent new processes (especially those that take advantage of information technology), and (3) organize and share knowledge about organizational practices. We also expect this process handbook to be useful in automatically (or semiautomatically) generating software to support or analyze business processes, but that is not the focus of this paper (see Dellarocas 1996, 1997a, 1997b)