Computer simulation is a prominent method in organizational studies and strategic management. [1] While there are many uses for computer simulation (including the development of engineering systems inside high-technology firms), most academics in the fields of strategic management and organizational studies have used computer simulation to understand how organizations or firms operate. More recently, however, researchers have also started to apply computer simulation to understand organizational behaviour at a more micro-level, focusing on individual and interpersonal cognition and behavior [2] such as team working. [3]
While the strategy researchers have tended to focus on testing theories of firm performance, many organizational theorists are focused on more descriptive theories[ citation needed ], the one uniting theme has been the use of computational models to either verify or extend theories. It is perhaps no accident that those researchers using computational simulation have been inspired by ideas from biological modeling, ecology, theoretical physics and thermodynamics, chaos theory, complexity theory and organization studies since these methods have also been fruitfully used in those areas.
Researchers studying organizations and firms using computer simulations utilize a variety of basic distinctions and definitions that are common in computational science
There are a variety of different methodological approaches in the area of computational simulation. These include but are not limited to the following. (Note: this list is not Mutually Exclusive nor Collectively Exhaustive, but tries to be fair to the dominant trends. For three different taxonomies see Carley 2001; Davis et al. 2007; Dooley 2002)
Early research in strategy and organizations using computational simulation concerned itself with either the macro-behavior of systems or specific organizational mechanisms. Highlights of early research included:
Later research using computational simulation flowered in the 1990s and beyond. Highlights include:
Organizational learning is the process of creating, retaining, and transferring knowledge within an organization. An organization improves over time as it gains experience. From this experience, it is able to create knowledge. This knowledge is broad, covering any topic that could better an organization. Examples may include ways to increase production efficiency or to develop beneficial investor relations. Knowledge is created at four different units: individual, group, organizational, and inter organizational.
Computer simulation is the process of mathematical modelling, performed on a computer, which is designed to predict the behaviour of, or the outcome of, a real-world or physical system. The reliability of some mathematical models can be determined by comparing their results to the real-world outcomes they aim to predict. Computer simulations have become a useful tool for the mathematical modeling of many natural systems in physics, astrophysics, climatology, chemistry, biology and manufacturing, as well as human systems in economics, psychology, social science, health care and engineering. Simulation of a system is represented as the running of the system's model. It can be used to explore and gain new insights into new technology and to estimate the performance of systems too complex for analytical solutions.
Social simulation is a research field that applies computational methods to study issues in the social sciences. The issues explored include problems in computational law, psychology, organizational behavior, sociology, political science, economics, anthropology, geography, engineering, archaeology and linguistics.
James Gardner March was an American political scientist, sociologist, and economist. A professor at Stanford University in the Stanford Graduate School of Business and Stanford Graduate School of Education, he is best known for his research on organizations, his seminal work on A Behavioral Theory of the Firm, and the organizational decision making model known as the Garbage Can Model.
In sociology, social complexity is a conceptual framework used in the analysis of society. In the sciences, contemporary definitions of complexity are found in systems theory, wherein the phenomenon being studied has many parts and many possible arrangements of the parts; simultaneously, what is complex and what is simple are relative and change in time.
Computational sociology is a branch of sociology that uses computationally intensive methods to analyze and model social phenomena. Using computer simulations, artificial intelligence, complex statistical methods, and analytic approaches like social network analysis, computational sociology develops and tests theories of complex social processes through bottom-up modeling of social interactions.
An agent-based model (ABM) is a computational model for simulating the actions and interactions of autonomous agents in order to understand the behavior of a system and what governs its outcomes. It combines elements of game theory, complex systems, emergence, computational sociology, multi-agent systems, and evolutionary programming. Monte Carlo methods are used to understand the stochasticity of these models. Particularly within ecology, ABMs are also called individual-based models (IBMs). A review of recent literature on individual-based models, agent-based models, and multiagent systems shows that ABMs are used in many scientific domains including biology, ecology and social science. Agent-based modeling is related to, but distinct from, the concept of multi-agent systems or multi-agent simulation in that the goal of ABM is to search for explanatory insight into the collective behavior of agents obeying simple rules, typically in natural systems, rather than in designing agents or solving specific practical or engineering problems.
Kenneth D. Mackenzie is an American organizational theorist, former professor at the University of Kansas and management consultant. He is known for his early work on the "Theory of Group Structures" and his later work on organizational design
The knowledge-based theory of the firm, or knowledge-based view (KBV), considers knowledge as an essentially important, scarce, and valuable resource in a firm. According to the knowledge-based theory of the firm, the possession of knowledge-based resources, known as intellectual capital, is essential in dynamic business environments. These resources contribute to lower costs, foster innovation and creativity, improve efficiencies, and deliver customer benefits. Collectively, they are considered key drivers of overall organizational performance. The proponents of the theory argue, that because knowledge-based resources are usually complex and difficult to imitate, different sources of knowledge and intellectual capital can be seen as the main sources for a sustainable competitive advantage.
Dynamic network analysis (DNA) is an emergent scientific field that brings together traditional social network analysis (SNA), link analysis (LA), social simulation and multi-agent systems (MAS) within network science and network theory. Dynamic networks are a function of time to a set of graphs; for each time point there is a graph. This is akin to the definition of dynamical systems, in which the function is from time to an ambient space, where instead of ambient space time is translated to relationships between pairs of vertices.
Complexity theory and organizations, also called complexity strategy or complex adaptive organizations, is the use of the study of complexity systems in the field of strategic management and organizational studies. It draws from research in the natural sciences that examines uncertainty and non-linearity. Complexity theory emphasizes interactions and the accompanying feedback loops that constantly change systems. While it proposes that systems are unpredictable, they are also constrained by order-generating rules.
Michael Cohen was the William D. Hamilton Collegiate Professor of Complex Systems, Information and Public Policy at the University of Michigan.
Paul M. Leonardi was the Duca Family Professor of Technology Management at the University of California, Santa Barbara. He was also the Investment Group of Santa Barbara Founding Director of the Master of Technology Management Program. Leonardi moved to UCSB to found the Technology Management Program and start its Master of Technology Management and Ph.D. programs. Before joining UCSB, Leonardi was a faculty member in the School of Communication, the McCormick School of Engineering, and the Kellogg School of Management at Northwestern University.
The behavioral theory of the firm first appeared in the 1963 book A Behavioral Theory of the Firm by Richard M. Cyert and James G. March. The work on the behavioral theory started in 1952 when March, a political scientist, joined Carnegie Mellon University, where Cyert was an economist.
Resource slack, in the business and management literature, is the level of availability of a resource. Resource slack can be considered as the opposite of resource scarcity or resource constraints.
Vensim is a simulation software developed by Ventana Systems. It primarily supports continuous simulation, with some discrete event and agent-based modelling capabilities. It is available commercially and as a free "Personal Learning Edition".
Linda Argote is an American academic specializing in industrial and organizational psychology. She is Thomas Lord Professor of Organizational Behavior and Theory in the Tepper School of Business at Carnegie Mellon University, where she directs the Center of Organizational Learning, Innovation and Knowledge.
Organizational adaptation is a concept in organization theory and strategic management that is used to describe the relationship between an organization and its environment. The conceptual roots of organizational adaptation borrows ideas from organizational ecology, evolutionary economics, industrial and organizational psychology, and sociology. A systematic review of 50 years worth of literature defined organizational adaptation as "intentional decision-making undertaken by organizational members, leading to observable actions that aim to reduce the distance between an organization and its economic and institutional environments".
Hart E. Posen is an academic, researcher, and business analyst. He is a Professor of Strategy and Entrepreneurship at Dartmouth College, Tuck School of Business.
Alok Gupta is an American information scientist, economic engineer, and academic. He is the Professor of Information and Decision, a Senior Associate Dean of Faculty, Research and Administration, and Curtis L. Carlson School Wide Chair in Information Management in the Carlson School of Management at the University of Minnesota.
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