Visiting Lecturer Program (12)

Speaker: Prof. Hazhir Rahmandad
Assistant Professor of Industrial and Systems Engineering
Virginia Tech, VA, USA

Local Organizer: Keyvan Vakili

Title: Impact of Delays on Organizational Learning

Time: Monday, Dec 25, 2006
Location: School of Management and Economics, Sharif University of Technology, Tehran

Abstract:

There are two papers on this theme, with the following abstracts:

(1) Learning and adaptation are central concepts in our understanding of organizations. Despite considerable literature on modeling organizational learning, a common assumption in this literature is the immediacy of action and payoff. We study how delays between action and payoff impact speed and efficiency of organizational adaptation. Through theoretical arguments and computational experiments, delays are shown to increase learning complexity and performance heterogeneity through two mechanisms. First, the complexity of state-space, and therefore learning, grows exponentially with the size of delays. Second, the time it takes to experience the benefits of long-term policies results in under-valuing of the intermediate steps for those policies, leading to immature abandonment of potentially fruitful regions of the strategy space. These results point to temporal complexity of payoff landscape as a complementary explanation for adaptation of organizational routines to diverse, and inefficient, arrangements, and therefore heterogeneous firm performance.

(2) Learning figures prominently in many theories of organizations. Understanding barriers to
learning is therefore central to understanding firms’ performance. This essay investigates the role of time delays between taking an action and observing the results in impeding learning. These delays, ubiquitous in real-world settings, can introduce important tradeoffs between the long-term and the short-term performance. In this essay, four learning algorithms, with different levels of complexity and rationality, are built and their performances in a simple resource allocation task are analyzed. The study focuses on understanding the effect of time delays on learning. Simulation analysis shows that regardless of the level of rationality of the organization, misperceived delays can impede learning significantly.