Organizational performance under conditions of vulnerability: A multi-agent perspective

We develop a multi-agent system based on computational organization theory to analyze the effect of vulnerability on organizational performance. Agents within the organization are modeled as information processing units, while links between agents represent the communication network along which commands or instructions are transmitted. The vulnerability of an organization is defined in terms of the ability of the organization to accomplish tasks when the agent or communication link fails. We demonstrate the utility of this framework by comparing the performance of four classic forms of organizational structure, and propose a hybrid structure that maximizes flexibility in the face of a rapidly changing environment. It is the ability of information technology to support this flexibility, we suggest, that will allow future organizational forms to gain a competitive advantage.