2011/04 LEM Working Paper Series

Toward Formal Representations of Search Processes and Routines in Organizational Problem Solving: An Assessment of the State-of-The-Art

Giovanni Dosi, Marco Faillo, Luigi Marengo, Daniele Moschella
Information processing, Problem-solving, Organizational structure

  JEL Classifications
D23, D83, L22

This paper presents a critical overview of some recent attempts at building formal models of organizations as information-processing and problem-solving entities. We distinguish between two classes of models according to two distinct objects of analysis. The first class includes models mainly addressing information processing and learning; the second class includes models focusing upon the relationship between the division of cognitive labor and search process in some problem-solving space. The results begin to highlight important comparative properties regarding the impact on problem-solving efficiency and learning of different forms of hierarchical governance, the dangers of lock-in associated with specific forms of adaptive learning, the relative role of "online" vs. "offline" learning, the impact of the "cognitive maps" which organizations embody, the possible trade-offs between accuracy and speed of convergence associated with different "decomposition schemes", the (ambiguous) role of organizational memory in changing environments. We argue that these are important formal tools towards the development of a comparative institutional analysis focusing on the distinct properties of different forms of organization and accumulation of knowledge.

download pdf