Adaptive Learning in Organizations: A System Dynamics-Based Exploration

1997 ◽  
Vol 23 (4) ◽  
pp. 561-582 ◽  
Author(s):  
Alessandro Lomi ◽  
Erik R. Larsen ◽  
Ari Ginsberg
Keyword(s):  
Decision Making ◽  
Experiential Learning ◽  
System Dynamics ◽  
Adaptive Learning ◽  
Time Delays ◽  
Traditional Approach ◽  
System Level ◽  
Individual Actions ◽  
Individual Decisions ◽  
Individual Choices

This paper employs a system dynamics-based framework to examine the limitations of experiential learning as a guide for decision-making in organizations. This framework departs from the more traditional approach to modelling experiential learning processes in organizations by emphasizing the systematic interaction between decision-making agents and their environments, rather than the effects of varying degrees of noise on performance. We present the results of a series of computer simulations that examined the consequences of adaptive learning in organizations by concentrating explicitly on the link between individual decisions and the system-level consequences generated by the interaction of individual choices. The results show that experience is a poor basis for learning primarily because the understanding of structural relations between individual actions and their aggregate consequences is confounded by nonlinear dynamics, time delays, and misperception of feedback.

scholarly journals A new measure of group decision-making efficiency

2020 ◽  
Vol 5 (1) ◽  
Author(s):  
Cheng-Ju Hsieh ◽  
Mario Fifić ◽  
Cheng-Ta Yang
Keyword(s):  
Decision Making ◽  
Information Processing ◽  
Group Decision Making ◽  
Group Decision ◽  
Detection Task ◽  
Detection Sensitivity ◽  
System Level ◽  
Workload Capacity ◽  
Individual Decisions ◽  
Collective Benefit

Abstract It has widely been accepted that aggregating group-level decisions is superior to individual decisions. As compared to individuals, groups tend to show a decision advantage in their response accuracy. However, there has been a lack of research exploring whether group decisions are more efficient than individual decisions with a faster information-processing speed. To investigate the relationship between accuracy and response time (RT) in group decision-making, we applied systems’ factorial technology, developed by Townsend and Nozawa (Journal of Mathematical Psychology 39, 321–359, 1995) and regarded as a theory-driven methodology, to study the information-processing properties. More specifically, we measured the workload capacity CAND(t), which only considers the correct responses, and the assessment function of capacity AAND(t), which considers the speed-accuracy trade-off, to make a strong inference about the system-level processing efficiency. A two-interval, forced-choice oddball detection task, where participants had to detect which interval contains an odd target, was conducted in Experiment 1. Then, in Experiment 2, a yes/no Gabor detection task was adopted, where participants had to detect the presence of a Gabor patch. Our results replicated previous findings using the accuracy-based measure: Group detection sensitivity was better than the detection sensitivity of the best individual, especially when the two individuals had similar detection sensitivities. On the other hand, both workload capacity measures, CAND(t) and AAND(t), showed evidence of supercapacity processing, thus suggesting a collective benefit. The ordered relationship between accuracy-based and RT-based collective benefit was limited to the AAND(t) of the correct and fast responses, which may help uncover the processing mechanism behind collective benefits. Our results suggested that AAND(t), which combines both accuracy and RT into inferences, can be regarded as a novel and diagnostic tool for studying the group decision-making process.

scholarly journals Subjective Knowledge, Perceived Risk, and Information Search when Purchasing a Franchise: A Comparative Exploration from Australia

2021 ◽  
Vol 14 (8) ◽  
pp. 338
Author(s):  
Peter Balsarini ◽  
Claire Lambert ◽  
Maria M. Ryan ◽  
Martin MacCarthy
Keyword(s):  
Decision Making ◽  
Information Search ◽  
Perceived Risk ◽  
Traditional Approach ◽  
Growth Strategy ◽  
Local Market ◽  
Significant Information ◽  
Subjective Knowledge ◽  
Decision Making Processes ◽  
The Relationship

Franchising has long been a method by which organizations seek to expand and facilitate local market development. However, franchising as a growth strategy can often be hampered by lack of suitable franchisees. To mitigate this shortage, some franchisors have engaged in recruiting franchisees internally from the ranks of their employees in addition to the traditional approach of recruiting franchisees externally. Predominantly franchisees are individuals rather than corporations and thus purchasing a franchise should most commonly be characterized as a consumer acquisition. To explore the relationship between subjective knowledge, perceived risk, and information search behaviors when purchasing a franchise qualitative interviews were conducted with franchisees from the restaurant industry. Half of these respondents were externally recruited having never worked for the franchisor and half were internally recruited having previously been employees of the franchisor. The external recruits expressed a strong desire to own their own business and engaged in extensive decision-making processes with significant information search when purchasing their franchises. Contrastingly, the internal recruits expressed a strong desire to be their own boss and engaged in limited, bordering on habitual decision-making processes with negligible information search when acquiring their franchises. The results reveal that differences in subjective knowledge and perceived risk appear to significantly impact the extent of information search between these two groups. A model of the relationship between subjective knowledge, perceived risk and information search in the purchasing of a franchise is developed that reconciles these findings. The findings also have practical implications for franchisors’ franchisee recruiting efforts which are integral to their capacity to develop local markets.

The value of sociality

foresight ◽  
2014 ◽  
Vol 16 (4) ◽  
pp. 309-328 ◽  
Author(s):  
Evgeniya Lukinova ◽  
Mikhail Myagkov ◽  
Pavel Shishkin
Keyword(s):  
Decision Making ◽  
Utility Function ◽  
Social Relationship ◽  
Social Utility ◽  
Content Type ◽  
Individual Level ◽  
Know How ◽  
General Utility ◽  
The Social ◽  
Individual Decisions

Purpose – This paper aims to study the value of sociality. Recent experimental evidence has brought to light that the assumptions of the Prospect Theory by Kahneman and Tversky do not hold in the proposed substantive domain of “sociality”. In particular, the desire to be a part of the social environment, i.e. the environment where individuals make decisions among their peers, is not contingent on the framing. Evolutionary psychologists suggest that humans are “social animals” for adaptive reasons. However, entering a social relationship is inherently risky. Therefore, it is extremely important to know how much people value “sociality”, when the social outcomes are valued more than material outcomes and what kinds of adaptations people use. Design/methodology/approach – We develop a new theory and propose the general utility function that features “sociality” component. We test the theory in the laboratory experiments carried out in several countries. Findings – Our results suggest that when stakes are low the theory of “sociality” is successful in predicting individual decisions: on average, people do value “sociality” and it surpasses the monetary loss. Originality/value – The main contribution of this paper is the breakdown of the risk attitudes under low stakes and individual level of decision-making. Another advancement is the ability to formalize the social utility or the theory of “sociality” in an economic model; we use general utility function that we define both on the outcomes and on the process of the decision-making itself and test in laboratory studies.

The Fertile Fields of Policy? Examining Fertility Decision-Making and Policy Settings

2008 ◽  
Vol 7 (2) ◽  
pp. 159-172 ◽  
Author(s):  
Jane Maree Maher
Keyword(s):  
Decision Making ◽  
Qualitative Study ◽  
Work And Family ◽  
Fertility Rates ◽  
Family Policies ◽  
Fertility Decision ◽  
Individual Choices ◽  
Fertility Choices ◽  
The Relationship ◽  
Oecd Data

OECD data suggest a significant gap between desired fertility rates and the total fertility rate achieved in developed industrial nations. In a qualitative study conducted in Australia in 2002 and 2003, people were asked how family policies influenced their decisions to have children. Participants did not clearly associate their fertility choices and prevailing policy settings. But their decision-making was grounded in commonplace accounts of incompatibility in balancing work and family. This article considers how individual choices may be shaped by such social and policy discourses and what implications this has for our understanding of the relationship between fertility choices and policy settings.

scholarly journals Groups Make Better Self-Interested Decisions

2012 ◽  
Vol 26 (3) ◽  
pp. 157-176 ◽  
Author(s):  
Gary Charness ◽  
Matthias Sutter
Keyword(s):  
Decision Making ◽  
Group Decision Making ◽  
Group Decision ◽  
Economic Behavior ◽  
Economic Research ◽  
Individual Decision ◽  
Bottom Line ◽  
Individual Decision Making ◽  
Cognitive Limitations ◽  
Individual Decisions

In this paper, we describe what economists have learned about differences between group and individual decision-making. This literature is still young, and in this paper, we will mostly draw on experimental work (mainly in the laboratory) that has compared individual decision-making to group decision-making, and to individual decision-making in situations with salient group membership. The bottom line emerging from economic research on group decision-making is that groups are more likely to make choices that follow standard game-theoretic predictions, while individuals are more likely to be influenced by biases, cognitive limitations, and social considerations. In this sense, groups are generally less “behavioral” than individuals. An immediate implication of this result is that individual decisions in isolation cannot necessarily be assumed to be good predictors of the decisions made by groups. More broadly, the evidence casts doubts on traditional approaches that model economic behavior as if individuals were making decisions in isolation.

Proposing a basic methodology for developing balanced scorecard by system dynamics approach

Kybernetes ◽  
2015 ◽  
Vol 44 (6/7) ◽  
pp. 1049-1066 ◽  
Author(s):  
Seyed Behnam Khakbaz ◽  
Nastaran Hajiheydari
Keyword(s):  
System Dynamics ◽  
Balanced Scorecard ◽  
Public Transportation ◽  
Time Delays ◽  
Scenario Planning ◽  
Content Type ◽  
Integrated Framework ◽  
Management Scenario ◽  
Transportation Company

Purpose – Successful future has inspired organizations to measure long-term and non-financial measurements and key performance indicators (KPIs). Kaplan and Norton proposed balanced scorecard (BSC) for this issue and have extended it to one of the most preferred strategic management system’s tools. However, available planning tools like BSC have some limitations, like dependency to the developer, weakness in showing time delays, and also mathematical relationships between lead and lag indicators. In this paper, the authors would present a new methodology for developing BSCs, which would be able to overcome these limitations. Therefore, the purpose of this paper is to develop an integrated framework for developing BSC with system dynamics approach (a dynamic BSC (DBSC)) which has lower limitation in compare with traditional BSC. The other purpose of this paper is developing a DBSC for an Iranian public transportation company. Design/methodology/approach – Based on this purpose, related literature was thoroughly reviewed and the proposed methodology designed using the system dynamics and BSC concepts. This methodology is a composition of original BSC development methodology and system dynamics principles. An assumed organization has been used for showing methodology’s capability and procedure. Furthermore, a case study has been accomplished in this paper. This case study is a DBSC which has been developed for an Iranian public transportation company. The purpose of this case study is to ensure about proposed methodology implication in action. Findings – The authors proposed a methodology which can be applied for developing BSCs. This methodology consists of six different steps which are: developing a system for organization, selecting stakeholders’ most important objectives and target, identifying organization’s objectives and their KPIs for different BSC aspects, developing strategy map, targeting, and selecting initiatives. In the proceeding of this paper, the proposed methodology and its steps would be explained in detail. Originality/value – The system dynamic approach has precedents in business studies; however, this research makes this approach operational in BSC designing and analysis. BSCs, which developed by this methodology can show time delays between an organization’s objectives, its KPIs’ relationship and also planning for it. Selecting achievable and rational vision and objectives’ targets, change management, scenario planning and policy analysis are other values which can be achieved by DBSC deployment which need further researches. In summary, this research has shown an integrated framework for developing DBSC and then applies it to an Iranian public transportation company. Therefore, another contribution of this paper is the application of this method for an Iranian public transportation company.

Slouching Toward Disaster

2011 ◽  
Author(s):  
Stephen A. Batzer ◽  
John S. Morse
Keyword(s):  
Decision Making ◽  
Gulf Of Mexico ◽  
Slow Motion ◽  
Deepwater Horizon ◽  
Complete Loss ◽  
Missing Information ◽  
Financial Loss ◽  
Low Profile ◽  
Decision Making Processes ◽  
Individual Decisions

“But, who cares, it’s done, end of story, [we] will probably be fine and we’ll get a good cement job.” This is an oft-repeated email quotation from one BP engineer to another on April 16, 2010, just four days before the Macondo well blew out in the Gulf of Mexico. Although these two men survived, 11 others did not. The well blowout also brought with it poisoning of the ecology and vast financial loss. This quote, part of a discussion about centralizers for the well (BP ended up with just six instead of the planned 16 or 21), seems to epitomize the attitude regarding a series of decisions made about the well’s design. The product of the decisions was complete loss and worse. However, the parties did not seem to be aware of the importance of their individual decisions or their consequences as they were making them. This disaster, like many others, seemed in retrospect to unfold in slow motion, and the players involved did not perceive the sheer cliff before them until they had transgressed its edge. This paper will examine decision-making processes in the Deepwater Horizon blowout and a series of other disasters, both high and low profile events. All of these preventable events stemmed from decision-making failures. These failures include disregarding existing information, failing to soberly extrapolate “what if?” when existing information contained uncertainty, failing to obtain vital missing information, failing to question decisions — particularly from those considered authoritative, and a cavalier attitude regarding rules because probably nothing will happen anyway. “Who cares?”

scholarly journals Decision making in reverse logistics using system dynamics

2004 ◽  
Vol 14 (2) ◽  
pp. 259-272 ◽  
Author(s):  
P. Georgiadis ◽  
D. Vlachos
Keyword(s):  
Decision Making ◽  
System Dynamics ◽  
Reverse Logistics ◽  
Closed Loop ◽  
System Modeling ◽  
New Approach ◽  
Helpful Tool ◽  
Starting Point ◽  
Decision Making Tool

Reverse logistics is a modern field of consideration, research and study, providing helpful information on the operation of the closed-loop supply chain. Although the starting point of this field is traced back to the early 90?s, no standard method has been suggested, neither prevailed. The purpose of this paper is to introduce a new approach on the study of reverse logistics. It is actually a review on how System Dynamics (SD) can be a helpful tool when it is used in the reverse logistics field. The paper explains the basic theory of the system modeling and next it utilizes the reverse logistics model. Finally, an illustrative example shows how SD modeling can be used to produce a powerful long-term decision-making tool.

scholarly journals Interacting roles of lateral and medial Orbitofrontal cortex in decision-making and learning : A system-level computational model

2019 ◽  
Author(s):  
Bhargav Teja Nallapu ◽  
Frédéric Alexandre
Keyword(s):  
Decision Making ◽  
Prefrontal Cortex ◽  
Computational Model ◽  
Orbitofrontal Cortex ◽  
Temporal Dynamics ◽  
System Level ◽  
Interacting Networks ◽  
Cortical Regions ◽  
Experimental Findings

AbstractIn the context of flexible and adaptive animal behavior, the orbitofrontal cortex (OFC) is found to be one of the crucial regions in the prefrontal cortex (PFC) influencing the downstream processes of decision-making and learning in the sub-cortical regions. Although OFC has been implicated to be important in a variety of related behavioral processes, the exact mechanisms are unclear, through which the OFC encodes or processes information related to decision-making and learning. Here, we propose a systems-level view of the OFC, positioning it at the nexus of sub-cortical systems and other prefrontal regions. Particularly we focus on one of the most recent implications of neuroscientific evidences regarding the OFC - possible functional dissociation between two of its sub-regions : lateral and medial. We present a system-level computational model of decision-making and learning involving the two sub-regions taking into account their individual roles as commonly implicated in neuroscientific studies. We emphasize on the role of the interactions between the sub-regions within the OFC as well as the role of other sub-cortical structures which form a network with them. We leverage well-known computational architecture of thalamo-cortical basal ganglia loops, accounting for recent experimental findings on monkeys with lateral and medial OFC lesions, performing a 3-arm bandit task. First we replicate the seemingly dissociate effects of lesions to lateral and medial OFC during decision-making as a function of value-difference of the presented options. Further we demonstrate and argue that such an effect is not necessarily due to the dissociate roles of both the subregions, but rather a result of complex temporal dynamics between the interacting networks in which they are involved.Author summaryWe first highlight the role of the Orbitofrontal Cortex (OFC) in value-based decision making and goal-directed behavior in primates. We establish the position of OFC at the intersection of cortical mechanisms and thalamo-basal ganglial circuits. In order to understand possible mechanisms through which the OFC exerts emotional control over behavior, among several other possibilities, we consider the case of dissociate roles of two of its topographical subregions - lateral and medial parts of OFC. We gather predominant roles of each of these sub-regions as suggested by numerous experimental evidences in the form of a system-level computational model that is based on existing neuronal architectures. We argue that besides possible dissociation, there could be possible interaction of these sub-regions within themselves and through other sub-cortical structures, in distinct mechanisms of choice and learning. The computational framework described accounts for experimental data and can be extended to more comprehensive detail of representations required to understand the processes of decision-making, learning and the role of OFC and subsequently the regions of prefrontal cortex in general.

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