MIT System Dynamics Seminar: Conflict, Chaos, and the Art of Institutional Design

Please visit the MIT System Dynamics Seminars page for more information.

You are invited to attend the System Dynamics Faculty Candidate Seminar being held this Friday, November 12^th from 1:00-2:30pm ET in the Jay W. Forrester conference room, E62-450, or virtually via Zoom: https://mit.zoom.us/j/95806449715. Our guest speaker will be Scott Ganz (Georgetown McDonough School of Business) presenting Conflict, Chaos, and the Art of Institutional Design (abstract and brief bio below).

The metaphor of the organization as a garbage can is often invoked as a playful insult. However, as was recognized early on by management theorists studying garbage can ideas, the unpredictability arising from the garbage can decision-making has the potential to be adaptively rationale for organizations facing complex task environments. The chaos produced by Intra organizational goal conflict and fluid participation in collective decision-making can aid in search by enabling firms to escape local performance peaks or competency traps. The decades-old hypothesis that conflict and chaos could promote adaptively rational search, however, has largely been overlooked in research on organizational design. This paper uses an agent-based model to evaluate these competing views and, in the process, identify conditions under which garbage can decision making is indeed adaptively rational. In particular, I explore the conditions under which preference conflict and fluid participation in decision-making promote effective search in an uncertain task environment. I show that the biased and chaotic outcomes that emerge as a result of garbage can decision making—the very features of garbage cans that lead them to be perceived to be dysfunctional—can facilitate short-term exploitation and long-term exploration of uncertain technical landscapes when organizations engage in the serial judgment of local alternatives and internal conflict over desired outcomes is not too extreme. I conclude that decision-making routines that encourage chaotic conflict are robust to bounded rationality and complex task uncertainty and thus should be included in the organizational designer’s portfolio.

Scott C. Ganz is a visiting assistant professor of strategy at Georgetown MSB and a research fellow in economic policy studies at the American Enterprise Institute. His research focuses on how organizations learn and, specifically, how organizational politics, hierarchy, and the design of decision-making institutions impact information aggregation, organizational adaptation, and organizational performance. He also writes on various topics in economic policy, including business policy, healthcare policy, environmental policy, tax policy, and housing policy.