Adaptation of the boundary system in growing firms: an agent-based computational study on the role of complexity and search strategy

The boundary system of a firm is intended to set constraints to the behaviour of organisational participants and, by this, to affect decision-making in the direction of the firm’s overall objective. In growing firms, the boundary system is subject to a particular tension: balancing the search for new opportunities and innovation with behavioural constraints to deal with increasing size and intra-organisational complexity. Against this background, the paper studies the adaptation of the boundary system in growing firms. For this, an agent-based simulation based on the framework of NK fitness landscapes is employed which is a rather new approach in the domain of management control systems. The study controls for different levels of task complexity and for different styles in firms’ search for new opportunities in terms of exploitative, explorative or ambidextrous search strategies. The results suggest that the level of task complexity subtly interferes with the search strategy employed in respect of the emerging boundaries. In particular, results support the conjecture that growing task complexity leads to more coordination via hierarchy. However, the search strategy employed shapes the predominance of boundaries compared to less constraining modes of coordination granting higher levels of autonomy to subordinate

An Agent-Based Approach for Evaluating Basic Design Options of Management Accounting Systems

This paper investigates the effectiveness of reducing errors in management accounting systems with respect to organizational performance. In particular, different basic design options of management accounting systems of how to improve the information base by measurements of actual values are analyzed in different organizational contexts. The paper applies an agent-based simulation based on the idea of NK fitness landscapes. The results provide broad, but no universal support for conventional wisdom that lower inaccuracies of accounting information lead to more effective adaptation processes. Furthermore, results indicate that the effectiveness of improving the management accounting system subtly interferes with the complexity of the interactions within the organization and the coordination mode applie

Distributed Search Systems with Self-Adaptive Organizational Setups

This paper studies the effects of learning-induced alterations of distributed search systems’ organizations. In particular, scenarios where alterations of the search-systems’ organizational setup are based on a form of reinforcement learning are compared to scenarios where the organizational setup is kept constant and to scenarios where the setup is changed randomly. The results indicate that learning-induced alterations may lead to high levels of performance combined with high levels of efficiency in terms of reorganization-effort. However, the results also suggest that the complexity of the underlying search problem together with the aspiration level (which drives positive or negative reinforcement) considerably shapes the effects of learning

Information Systems and Decision Quality: Lessons from Information Economics and Agency Theory

One of the arguments for using information systems (IS) is the expectation to enhance decision quality and, thereby, to increase overall business value. Practical experiences as well as empirical evidence show that this expectation is not always fulfilled and explanations are manifold. The paper applies information economics and, especially, agency theory as explanatory framework for analyzing the relation among IS and decision quality. Thereby, novel insights for unfulfilled expectations related to effects of IS on decision quality are derived. The paper seeks to substantiate the claim for an intensified agency-based research into IS - not only to enrich the IS discipline but also to indicate that agency-based research on management information could benefit from the IS discipline

Job Selection in a Network of Autonomous UAVs for Delivery of Goods

This article analyzes two classes of job selection policies that control how a network of autonomous aerial vehicles delivers goods from depots to customers. Customer requests (jobs) occur according to a spatio-temporal stochastic process not known by the system. If job selection uses a policy in which the first job (FJ) is served first, the system may collapse to instability by removing just one vehicle. Policies that serve the nearest job (NJ) first show such threshold behavior only in some settings and can be implemented in a distributed manner. The timing of job selection has significant impact on delivery time and stability for NJ while it has no impact for FJ. Based on these findings we introduce a methodological approach for decision-making support to set up and operate such a system, taking into account the trade-off between monetary cost and service quality. In particular, we compute a lower bound for the infrastructure expenditure required to achieve a certain expected delivery time. The approach includes three time horizons: long-term decisions on the number of depots to deploy in the service area, mid-term decisions on the number of vehicles to use, and short-term decisions on the policy to operate the vehicles

An Agent-Based Approach for Evaluating Basic Design Options of Management Accounting Systems

This paper investigates the effectiveness of reducing errors in management accounting systems with respect to organizational performance. In particular, different basic design options of management accounting systems of how to improve the information base by measurements of actual values are analyzed in different organizational contexts. The paper applies an agent-based simulation based on the idea of NK fitness landscapes. The results provide broad, but no universal support for conventional wisdom that lower inaccuracies of accounting information lead to more effective adaptation processes. Furthermore, results indicate that the effectiveness of improving the management accounting system subtly interferes with the complexity of the interactions within the organization and the coordination mode applie