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Managerial Issues in Complex Planning Procedures Bahram Alidaee Other Research Members Keith Womer Cesar Rego Gary K

2. This Research Was Inspired by:Numerous studies over the years have attempted to provide technological solutions to the problem of sailor distribution and assignment. To date these studies have failed to provide a substantive solution to this vexing problem. In our opinion the main reason that

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Managerial Issues in Complex Planning Procedures Bahram Alidaee Other Research Members Keith Womer Cesar Rego Gary K

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    1. 1 Managerial Issues in Complex Planning Procedures Bahram Alidaee Other Research Members Keith Womer Cesar Rego Gary Kochenberger Fred Glover June 2003

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    3. 3 This Research Was Inspired by (continued): Strategic Choices, Product Diversification, Real Option: Why are firms different? … the sources of firm heterogeneity underlie competitive advantage. The source based view and knowledge management approaches suggest that capabilities and knowledge form the basis differential firm preference. But how do successful firms get to the point where they have superior resources and knowledge, and how do firms maintain this superiority through time? Dynamic capabilities that enable firms to introduce new products and processes and adapt to changing market condition play an important role. … At the heart of [our] model are sequences of products within and across vertical chains (supply chains or value chains), suported by an underlying system of knowledge and systems of learning. At any given point in time, an organizations portfolio of products serves as a platform for future product sequences. These product platforms evolve over time in concert with knowledge and capabilities, and provide opportunities for competitive advantage through the strategic linkage of products up, down, and across vertical chains (supply chains or value chains). Helfat, Raubitschek (2000) Strategic Management Journal, Kogut and Kulatilaka (2001) Organization Science, Bowman and Moskowitz (2001) Organization Science, Montgomery (1994) Journal of Economic Perspectives.

    4. 4 This Research Was Inspired by (continued): Adaptive Complex Systems: The principal challenges facing strategy process research is … to address the ‘central evolutionary and transformational process’ through which organizations renew themselves, rather than simply focusing on single administrative systems. There are two well-established perspectives from which this strategy process challenge is most frequently viewed are: (1) strategic choice -- a transformational process in which organizations adapt to environmental changes by restructuring themselves in an intentional, rational manner, (2) ecology -- an evolutionary process of competitive selection in which whole populations of organizations adapt to environmental change … A third view on strategic process is through the ‘science of complexity.’ … It is concerned with the fundamental logical properties of the behavior of non-linear and network feedback systems. Stacey (1996) Strategic Management Journal, Kauffman and Weinberger (1989) Journal of Theoretical Biology, Kauffman (1993) The Origins of Order

    5. 5 Systems: Systems composed of a finite number of parts. For each part, it is necessary to choose one of several interchangeable components which then interact with each other in complex ways that often cannot be measured. One objective in designing such a system is to choose, for each part, one of the available components in such a way that the resulting system is the best according to a specific measure of performance.

    6. 6 Examples: Kauffman and Weinberger (1989) Journal of Theoretical Biology. [... in the study of maturation of the immune response, an antibody (the “system”) is collection of amino acid cites (the “parts”) in the V region. At each cite is one of 20 amino acids (the “components”). The affinity of an antibody for a particular antigen, which depends on how the chosen amino acids interact with each other, is a measure of the fitness (“performance”) of resulting antibody.]

    7. 7 Examples: Kauffman (1993), The Origins of Order. [… in the study of the evolution of genomes, a genome (the “system”) consists of a number of gene positions, or loci (the “parts”). At each locus, evolution selects one of several versions of a gene, that is, the alleles (the “components”). The fitness (the “performance”) of the resulting genome is based on how the selected genes interact with each other. It is assumed that genomes evolve so that allelic substitutions at each locus tend to maximize genomic fitness.]

    8. 8 Examples: Derrida (1981) Physics Review B, Condensed Matter. [… in the study of spin glasses, the system consists of a number of contiguous atoms (the “parts”). For each atom, it is possible to select a spin up or a spin down (the “components”). The total energy (the “performance”) of the atoms depends on how the selected spins interact with each other. The objective is to determine the spin of each atom so that the resulting ensemble has the least total energy.]

    9. 9 Examples: Solow et al. (2002) Management Science. [… in the study of team building in an organization, a team (the “system”) consists of a number of job positions (the “parts”). For each job position, it is possible to select one of a number of qualified individuals (the “components”). The effectiveness (the “performance”) of such a team is based on how the selected individuals interact with each other and the objective is to determine who to select for each position so that the resulting team is most effective.]

    10. 10 Examples: Levinthal (1997) Management Science, Levinthal and Warglrein (1999) Organization Science, McKelvey (1999) Organization Science [… in the study of organization change, the system represents an organization having a number of attributes (the “parts”). For each attribute, it is possible to choose one of two alternative forms (the “components,” for example, the decision whether to offer a narrow range of products or a wide range of products. Another component may be the decision to whether to invest in flexible machine tools or not). In such system the effect of the amount of interaction among these attributes on the overall effectiveness (“performance”) of the organization is studied.]

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    12. 12 Examples: McCarthy and Tan (2000) Journal of Materials Processing Technology [… the study of manufacturing competitiveness and fitness landscape.] Ebeling et al. (2001) Advances in Complex Systems. [… investigating the dynamics of economic evolution and technological change.] Kauffman, Lobo, and Macready (2000) Journal of Economic Behavior & Organization, [… investigates optimal search on a technology landscape.]

    13. 13 System:

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    15. 15 Fitness Landscape: A fitness landscape is defined by three things: A representation space (all possible words in the encoding); A neighborhood relation denoting which points in the representation space are neighbors; and A fitness function that assigns a fitness value to each point in the space.

    16. 16 NK-Landscape:

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    20. 20 Design Process of a Product as NK Model: Quality Function Deployment (QFD) is a systematic process of capturing Customer ‘needs’ and ‘wants’ into design of product and the processes and in many cases into strategy of the firm. One possible scenario is (Bahill and Chapman, 1993, TUTORIAL): ‘Customer Demands,’ ‘Quality Characteristics,’ ‘Product Characteristics,’ ‘Manufacturing Characteristics,’ and ‘Quality Control.’

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    25. 25 Some Issues to be Discussed: A major research issue in complex systems is that it is ‘the number of ties’ rather than their ‘individual strength or weakness’ that determines the variety in the behavior of a system. Thus, questions related to number of stages, and number of ties in each stage and across stages should be studied. Does performance of the system decrease as interaction between the components in each state increase (complexity catastrophe)? Does performance of the system decrease as interaction across states increase (coupled dancing)? Does change in number of interactions across stages affect interactions in each stage? What are effects of a “minimal” or “structural” change? What are the effects of budget restrictions of performance of the system? Another major research issue in complex systems is ‘number of peaks’ and ‘how to get there.’ Related to this, in the process of strategic change, depending on the goals of the organization, how much variation from the goal these peaks present? How to minimize the variation from the goal? History and research has shown human groups perform best at a maximum size of about 150. Is this supported by complex adaptive system (CAS)? Organizational fit are based on mission and goals. How does CAS help in organizational fit?

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