Abstract: Centralization and formalization have previously been employed in research designs investigating organizational innovation. The results, however, have been mixed. Three arguments are raised toward explaining this inconsistency. First, innovation is a multi-phased process in which the influence of centralization and formalization could be expected to differ. Second, as innovations may vary with regard to their compatibility to individuals in organizations, the expected influence of centralization and formalization may also vary. Third, organizational innovations may be directed toward particular vested interests, such as the technical or administrative core. Accordingly, the influence of centralization and formalization may also vary. This paper reports on a study which examines the influence of centralization and formalization on organizational innovation given the arguments given above. The effectiveness of employing structural overlays to overcome the conflicting forces often arising between organizational processes and particular organizational behaviors-such as innovative behavior-is investigated as well. Managers of 49 software development groups responded to a questionnaire assessing the influences of centralization and formalization on the initiation, adoption, and implementation of six modern software practices MSP within their software groups. Three of the MSP were technical in nature and three were administrative. The technical MSP were viewed as being incompatible to the technical core. Two structural overlays were investigated regarding their ability to improve the diffusion process: the existence of a formal body responsible for identifying MSP and introducing them into the software group; and, the assignment of computer specialists to projects as "set" teams.

Abstract: Prominent trends in leadership research are reviewed. Theoretical perspectives are organized in a four-fold typology based on the dominating assumptions of the research effort: (1) the focus on a universally appropriate set of leadership traits, (2) the focus on a universally appropriate behavioral style, (3) the focus on situationally contingent leadership traits, and (4) the focus on situationally contingent behavioral styles. Potential organizational prescriptions following from each perspective are identified (e.g., selection, placement, training). It is argued that existing research has mapped only a portion of the domain of leadership phenomena due to a concentration on relatively few leadership constructs and because of the popularity of a limited set of empirical methodologies. Recent developments, promising new directions, and novel methods in leadership research are described.

Abstract: In this paper we study the computational complexity of the capacitated lot size problem with a particular cost structure that is likely to be used in practical settings. For the single item case new properties are introduced, classes of problems solvable by polynomial time algorithms are identified, and efficient solution procedures are given. We show that special classes are NP-hard, and that the problem with two items and independent setups is NP-hard under conditions similar to those where the single item problem is easy. Topics for further research are discussed in the last section.

Abstract: This paper considers the question: How should a firm allocate a resource among divisions when the productivity of the resource in each division is known only to the division manager? Obviously if the divisions as represented by their managers are indifferent among various allocations of the resource, the headquarters can simply request the division managers to reveal their private information on productivity knowing that the managers have no incentive to lie. The resource allocation problem can then be solved under complete or at least symmetric information. This aspect is a flaw in much of the recent literature on this topic, i.e., there is nothing in the models considered which makes divisions prefer one allocation over another. Thus, although in some cases elaborate allocation schemes are proposed and analyzed, they are really unnecessary. In the model we develop, a division can produce the same output with less managerial effort if it is allocated more resources, and effort is costly to the manager. We further assume that this effort is unobservable by the headquarters, so that it cannot infer divisional productivity from data on divisional output and managerial effort. Given these assumptions, we seek an optimal resource allocation process. Our results show that certain types of transfer pricing schemes are optimal. In particular, if there are no potentially binding capacity constraints on production of the resource, then an optimal process is for each division to choose a transfer price from a schedule announced by the headquarters. Division managers receive a fixed compensation minus the cost of the resource allocated to them at the chosen transfer price. Resources are allocated on the basis of the chosen transfer prices. If there is a potentially binding constraint on resource production, a somewhat more complicated, but similar, scheme is required.

Abstract: This paper introduces methods for formulating and solving a general class of nonpreemptive resource-constrained project scheduling problems in which the duration of each job is a function of the resources committed to it. The approach is broad enough to permit the evaluation of numerous time or resource-based objective functions, while simultaneously taking into account a variety of constraint types. Typical of the objective functions permitted are minimize project duration, minimize project cost given performance payments and penalties, and minimize the consumption of a critical resource. Resources which may be considered include those which are limited on a period-to-period basis such as skilled labor, as well as those such as money, which are consumed and constrained over the life of the project. At the planning stage the user of this approach is permitted to identify several alternative ways, or modes, of accomplishing each job in the project. Each mode may have a different duration, reflecting the magnitude and mix of the resources allocated to it. At the scheduling phase, the procedure derives a solution which specifies how each job should be performed, that is, which mode should be selected, and when each mode should be scheduled. In order to make the presentation concrete, this paper focuses on two problems: given multiple resource restrictions, minimize project completion time, and minimize project cost. The latter problem is also known as the resource-constrained time-cost tradeoff problem. Computational results indicate that the procedures provide cost-effective optimal solutions for small problems and good heuristic solutions for larger problems. The programmed solution algorithms are relatively simple and require only modest computing facilities, which permits them to be potentially useful scheduling tools for organizations having small computer systems.

Abstract: Utility functions are an important component of normative decision analysis, in that they characterize the nature of people's risk-taking attitudes. In this paper we examine various factors that make it difficult to speak of the utility function for a given person. Similarly we show that it is questionable to pool risk-propensity data across studies (for descriptive purposes) that differ in the elicitation methods employed. The following five sources of bias or indeterminacy are hypothesized and demonstrated. First, certainty equivalence methods generally yield greater risk-seeking than probability equivalence methods. Second, the probability and outcome levels used in reference lotteries induce systematic bias. Third, combining gain and loss domains yields different utility measures than separate examinations of the two domains. Fourth, whether a risk is assumed or transferred away exerts a significant influence on people's preferences in ways counter to expected utility theory. Finally, context or frami...

Abstract: Application of heuristic solution procedures to the practical problem of project scheduling has previously been studied by numerous researchers. However, there is little consensus about their findings, and the practicing manager is currently at a loss as to which scheduling rule to use. Furthermore, since no categorization process was developed, it is assumed that once a rule is selected it must be used throughout the whole project. This research breaks away from this tradition by providing a categorization process based on two powerful project summary measures. The first measure identifies the location of the peak of total resource requirements and the second measure identifies the rate of utilization of each resource type. The performance of the rules are classified according to values of these two measures, and it is shown that a rule introduced by this research performs significantly better on most categories of projects.

Abstract: A school may be viewed as an enterprise in which the professional staff provide the operating conditions for converting quantifiable resources or inputs into pupil learning outputs. The resources are determined by budgets, teacher assignments, and student assignments while learning is determined by various outputs scored according to standardized tests such as the Iowa Test of Basic Skills. Following the work of Charnes, Cooper, and Rhodes Charnes, A., W. W. Cooper, E. Rhodes. 1981. Evaluating program and managerial efficiency: an application of data envelopment analysis to program follow through. Management Sci.27 6 668-697., we use a ratio definition of efficiency that takes account of all outputs and inputs without requiring a priori specification of weights. Instead a series of mathematical programs are applied to determine "virtual multipliers" from actual data. The multipliers produce values that can be regarded as the "most favorable weights" for each school being evaluated. If the resulting optimum virtual multipliers for a given school yield an efficiency ratio of one, then that school is said to be efficient. If the ratio is less than one then that school is said to be inefficient relative to the other schools in the analysis. The ratio is also accorded operational significance-it is not merely an index number-so that the resulting values and the associated virtual multipliers make it possible to locate where improvements may be made along with their relative magnitudes. This analysis was applied to 167 elementary schools in the Houston Independent School District. Of these schools, 78 were found to be inefficiently utilizing their resources as compared to the 89 efficient schools. Based on this pilot study, an Educational Productivity Council has been formed at the University of Texas at Austin to provide an annual analysis for all of its member schools. At present 285 Texas schools in 22 districts are scheduled for participation in the annual analysis as described in this investigation.

Abstract: In dynamic facility location problems, one desires to select the time-staged establishment of facilities at different locations so as to minimize the total discounted costs for meeting demands specified over time at various customer locations. We formulate a particular dynamic facility location problem as a combinatorial optimization problem. The formulation permits both the opening of new facilities and the closing of existing ones. A branch-and-bound procedure incorporating a dual ascent method is presented and shown, in computational tests, to be superior to previously developed methods. The procedure is comparable to the most efficient methods for solving static single-period location problems. Problems with 25 potential facility locations, 50 customer locations, and 10 time periods have been solved within one second of CPU time on an IBM 3033 computer. Extensions of the dynamic facility location problem that allow price-sensitive demands, linearized concave costs, interdependent projects, multiple stages, and multiple commodities also can be solved by the dual ascent method. The method can serve as a component of a solution process for capacitated dynamic location problems.

Abstract: This paper explores some of the consequences of adopting a modern subjective view of probability for game theory. The consequences are substantial. The subjective view of probability clarifies the important distinction between normative and positive theorizing about behavior in games, a distinction that is often lost in the search for "solution concepts" which largely characterizes game theory since the work of von Neumann and Morgenstern. Many of the distinctions that appear important in conventional game theory two-person versus n-person, zero-sum versus variable sum appear unimportant in the subjective formulation. Other distinctions, such as single play versus repetitive-play games, appear to be more important in the subjective formulation than in the conventional formulation.

Abstract: This paper is concerned with organizational information systems. Examples of such systems include intelligence systems, communications systems, management information systems, decision support systems, and administrative control systems. Systems such as these are critical to an organization's functioning; indeed to its survival. The paper is intended to be of use to three types of professionals: those who study organizations; those who design information systems; and those who manage. This fact causes the paper to differ in a number of ways from earlier works dealing with organizational communications and related topics. For example, the paper draws on three different literatures: the psychological literature dealing with perception and cognition, the social-psychological literature dealing with the role of motivation in communications, and the organizational literature dealing with behavior in information systems. Further, the paper gives greater attention than do earlier works to logistical determinants of information system effectiveness, such as the workload of the unit processing the message or the priority assigned to a message, as contrasted with social-psychological determinants. Finally, the explicit introduction of judgment and argument by analogy when direct evidence is unavailable is a third way in which the paper differs from earlier works. The paper focuses in particular on the determinants of the performance and behavior of systems such as those mentioned above. It discusses in some detail the impact of these determinants on four processes that are of key importance in the operation of information systems. Two of these processes are used to increase system efficiency. One, message routing causes any particular message to be distributed to relatively few organizational units, and thus greatly reduces the information processing load of the many units that might otherwise be involved in receiving or relaying the message. The other, message summarizing, plays a similar role. It has as its purpose reducing the size of the message while at the same time faithfully reproducing its meaning. The remaining two processes follow from the fact that organizational units necessarily exercise some discretion in the way that they handle messages. Message delay is a consequence of the priority assignment given a message, and in many cases enhances the effectiveness not only of the operating unit but of the organization as a whole. Message modification refers to the distortion of message meaning. Its source may be either the cognitive limitations or the motivations of the sender or receiver. Modifications may be conscious or unconscious, well-intended or malicious. Each of these four processes is discussed in some depth. More specifically, the several determinants of the probability or extensiveness of each process's occurrence are identified. The literature related to the various process-determinant pairings is then reviewed, and is summarized in the form of propositions. Several areas where additional research is needed are noted and recommendations are made concerning what the nature of such research should be.

Abstract: The author's current decision-making environment is summarized. A short history of the Planning, Programming and Budgeting System is given and then the recent changes made by the Reagan Administration are discussed. Some remarks on analysis and decision-making at the top government levels are given.

Abstract: This paper proposes and tests a procedure for decomposing a large scale production planning problem modeled as a mixed-integer linear program. We interpret this decomposition in the context of Hax ...

Abstract: The case is made for performing more longitudinal research into organizations and their adaptive processes. Previous literature on the empirical longitudinal analysts of organizations is classified into five categories on the basis of the breadth of scope of the research, the number and diversity of organizations being studied, and the degree to which mathematical and statistical procedures are used to develop conclusions. The strengths and limitations of each of the five types of longitudinal research are discussed. It is argued that there should be a more concerted attempt to undertake research that focuses on a broad array of organizational variables in many organizations and which uses quantitative methods to derive results which are replicable and whose range of generality has been carefully established. Several proposals are made toward this end. Methods are suggested for gathering valid and reliable longitudinal multivariate data from numerous organizations in an economical fashion. Also, techniques of statistical and mathematical analysis are proposed for handling the complications caused by multivariate nonlinearities in longitudinal data. Of particular interest in this regard is the use of techniques of organizational taxonomy generation and testing and the use of algebraic heuristic procedures for identifying and differentiating among common scenarios of change in organizations. These suggestions should help to combat the non-cumulative nature of longitudinal research by avoiding the very common problems of specification error, nongenerality, and non-replicability.

Abstract: A location problem with a hierarchy of facilities and services is proposed and solved. The formulation defines a demand point to be covered for a given level of service if some member of the facility hierarchy eligible to provide that service is present within an appropriate distance. Furthermore, the absence of coverage at any one service level for a demand point is taken to imply lack of coverage in the grand measure of coverage. The problem's objective is the maximum coverage of population given specific limits on either the number of each type of facility or on the total investment that can be made in all facility types. Relaxed linear programming, supplemented by branch and bound where necessary, is used to solve the resulting integer programming problem. An application is described that uses distance and population data developed for a region of Honduras. Honduran nationals are currently being trained in the use of this and related location methodologies under a contract with the Agency for International Development. This effort is in support of work being undertaken by the Honduran National Planning Council to develop a nationwide data set of populated places in Honduras to which location methodologies will be applied.

Abstract: This paper investigates the Borda-Kendall method for the determination of a consensus ranking. It is shown that in the case of ties the method does not perform as claimed. A "minimum variance" method for determining the consensus ranking is proposed and its properties examined. It is shown to be equivalent to the Borda-Kendall method if ties are not allowed. An algorithm to determine the "minimum variance" consensus ranking in the case of ties is described. Results obtained from the solution of problems of various sizes are discussed.

Abstract: The impact of a decision calculus model on decision quality is assessed in a laboratory setting. An experimental design assesses the effects of: (a) the size of the problem (i.e., the number of control units over which allocations are to be made), (b) the noise-to-signal ratio in the market and (c) individual differences among the model users. The aspects of individual differences studied are: (1) time taken on the task, (2) mathematical ability and (3) cognitive style. The main experiment involved 96 subjects in a full factorial design. In general, the decision calculus model had a beneficial impact on a broad range of decision quality measures, particularly profit achievement.

Abstract: This study investigated the effects of two group decision making techniques on a set of four problems in groups of sizes 3, 7, and 11. Participants included 192 male and 132 female undergraduates. Estimates that could be evaluated for accuracy for each of the problems were collected for a series of three trials. One set of groups received face-to-face verbal feedback from each other, while the other set received written feedback. These data were compared to mean estimates obtained from randomly selected, pooled individual estimates. The results suggested that the pooled individual estimates were somewhat more accurate than those obtained from either of the interacting groups. At the same time, all individuals became more confident of their answers, suggesting the possibility of groupthink. No effects for different group sizes were found, possibly due to the constraints imposed by the structured nature of the two techniques.

Abstract: This paper presents a stochastic linear programming formulation of a firm's short term financial planning problem. This framework allows a more realistic representation of the uncertainties fundamental to this problem than previous models. In addition, using Wets's algorithm for linear simple recourse problems, this formulation has approximately the same computational complexity as the mean approximation i.e., the deterministic program obtained by replacing all random elements by their means. Using this formulation we empirically investigate the effects of differing distributions and penalty costs. We conclude that even with symmetric penalty costs and distributions the mean model is significantly inferior to the stochastic linear programming formulation. Thus we are able to demonstrate that ignoring the stochastic components in linear programming formulations can be very costly without having significant computational savings.

Abstract: Appropriate inspection is a significant component of production systems. In this paper a model is developed to determine the optimal placement of inspection stations within n-stage linear production systems. This model accommodates two types of inspector fallibility: "predictable," which implies that the error rates are known and constant, and "erratic," which requires a random variable to describe inspector performance. Cost per good unit accepted by the customer is used as the optimizing criterion. The cost-quality response surface is explored through a sequential sensitivity analysis. Our results indicate that under certain conditions the level of predictable inspector fallibility significantly impacts the number and placement of inspection stations as well as cost per good unit produced. The modeled systems, however, were quite insensitive to the variability of inspector performance. This production-inspection model provides management with information on the optimal number and placement of inspection stations for specific planned or existing serial production systems. It can also be used by management to explore various policy options, such as the cost implications of increasing the quality vs. the quantity of inspection stations. The data required by the model can be obtained at reasonable cost provided management is willing to estimate or determine judgementally certain of the variables.

Abstract: The normative solution concepts of game theory try to provide a clear mathematical characterization of what it means to act rationally in a game where all players expect each other to act rationally. Kadane and Larkey reject the use of these normative solution concepts. Yet, this amounts to throwing away an important piece of information to the effect that the players are rational and expect each other to be rational. Even in situations where the players do not expect each other to act with complete rationality, normative game theory can help them heuristically to formulate reasonable expectations about the other players' behavior.

Abstract: This paper develops two distinct models for studying inventory systems with continuous production and perishable items. The perishable items have a deterministic usable life after which they must be outdated. For each of the models, analytical expressions derived from queueing theory, are found for the steady-state distribution of system inventory. Knowledge of this steady-state behavior may be used for evaluation of system performance, and for consideration of alternatives for improving system performance. Both models assume that inventory is replenished by a continuous production process. The first model, assuming continuous inventory units, has Poisson demand requests with the size of each request distributed as an exponential random variable. The second model has Poisson demand requests with all demands being for a single unit. The analysis for both models exploits the similarity of the inventory system with a single-server queueing system.

Abstract: We continue our survey of methods for constructing confidence intervals for steady-state means via simulation by studying sequential procedures which determine the length of the simulation during the course of the run. Our goal is to provide the simulation practitioner with some guidance as to which published procedures might actually perform well in practice. Empirical results for a variety of stochastic models with known steady-state means suggest that sequential procedures by Fishman and by Law and Carson provide good performance relative to the criterion probability of coverage.

Abstract: In recent years, performance measurement has become the focus of attention in a variety of public sector fields. Unfortunately, too little has been done to develop valid operational definitions of performance, or to identify the weaknesses and biases inherent m certain types of performance measures. Thus, the potential exists for the inappropriate use of certain indicators in performance evaluations and decisions. One field in which there has been increasing effort to deal with performance problems is that of transit. Regardless, the nebulous nature of "performance" has been all too apparent in this industry. The terms "productivity," "efficiency," and "effectiveness" have been used synonymously in some instances, while in other cases "efficiency" and "effectiveness" have been considered to be different aspects of overall "productivity." This confusion is of major significance, because the use of performance measures in operations assessment, decision making, and resource allocation is increasing. Furthermore, since it increasingly is being urged that subsidy payments be linked to the performance of a transit system, and since subsidies now constitute over half of transit revenues, the performance measurement problem is particularly important. This paper examines weaknesses and biases inherent in commonly used measures of urban mass transit performance. It is shown that measures of efficiency, such as cost per passenger, are being incorrectly used as measures of effectiveness and that various traditional measures of efficiency, such as those which incorporate mileage, can be misleading when applied in decision making. Suggestions are made for developing valid performance indicators and for developing safeguards that will avoid present shortcomings.

Abstract: Hiring new staff in R&D provides an important opportunity for a firm to acquire new technological knowledge. It also takes a considerable length of time before new R&D staff become fully integrated into the organization. This study compares the communication patterns of new and veteran R&D staff as a function of their work activities. The results suggest that both the benefits and problems in the hiring and integration of new R&D staff is moderated by the type of research, development or technical service work involved. Particular attention should be paid to the integration of new staff involved in new product or process development, where the benefits of bringing in new people are great, but the communication barriers to overcome are also found to be the most serious.

Abstract: Improved priority scheduling rules are presented for a repair shop supporting a multi-item repairable inventory system with a hierarchical product structure. A variety of scheduling rules are evaluated using a simulation of a representative shop and product structure. The results indicate that dynamic rules which use inventory status information perform better than other dynamic or static rules which ignore inventory status; moreover, dynamic rules which use work-in-process inventory information outperform dynamic rules which ignore work-in-process inventory levels. In the simulation, the use of improved scheduling rules provides performance equivalent to a 20% reduction in spares inventory.

Abstract: This paper is concerned with the formulation of short-term forecasting models, and introduces a range of models of considerable importance. These are defined in terms of predictions and sensible updating mechanisms for estimates of quantities such as level, growth, and seasonality, and constitute generalizations of familiar linear exponential smoothing predictors. They are shown to be equivalent to particular ARIMA models, and generally these do not lie within that subset of the ARIMA class which forms the basis of the Box-Jenkins modelling approach. It is argued that the models of this paper have a reasoned structure, and are to be preferred to the Box-Jenkins models for most socio-economic applications.

Abstract: This paper presents a new method, called the batch quantile method, for estimating quantiles in regenerative simulations. The quantile estimator is consistent and asymptotically normal, and the method can be easily implemented and does not require prior knowledge of the range of values the data will assume. Empirical studies show adequate coverage of confidence intervals when batches of 50 cycles or more are used.

Abstract: This paper develops a methodology for modeling consumer response that integrates previous research in stochastic brand selection, diffusion of innovation, test market analysis, and new product design. The methodology makes it practical to extend brand selection models to include diffusion phenomena such as awareness, trial, and information flow. Purchase timing and brand selection are interdependent and both phenomena depend jointly on managerial controls such as advertising, coupons, price-off promotion, product positioning, and consumer characteristics. Within this general structure, we provide practical estimation procedures a least squares approximation to the maximum likelihood estimates to determine the parameters which link managerial controls to consumer response. Closed form solutions are derived for cumulative awareness, cumulative trial, penetration, expected sales, and purchases due to promotion-all as a function of time. We also provide simplified expressions for equilibrium t → ∞ market share. Tradeoffs among complexity of the diffusion process, number of managerial variables, nonstationarity, complexity of purchase timing, consumer segmentation, and sample size are made explicit so that the marketing scientist can customize his analyses to the managerial problems that he faces. The effects of sample size, data interval frequency, and collinearity in the explanatory variables are investigated with simulations based on a five-state consumer response process which depends on 8-10 marketing variables. The paper closes with a brief description of the application and predictive test of a consumer response model based on the methodology.