Structural Change and Homeostasis in Organizations: A Decision-Theoretic Approach

Abstract

We present here a decision-theoretic framework for the analysis of organizational change and homeostasis under risk. An algorithm is demonstrated that identifies optimal change paths given uncertainty involving execution time, intervention cost, and payoffs resulting from particular structural configurations. An elaboration of the basic framework to accommodate external structural perturbations is shown, and is applied to the problem of organizational homeostasis. Finally, an extension of the decision model is provided that admits multiple decision makers with divergent preferences and capacities for inducing organizational change.

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