Özgecan Koçak, Daniel A. Levinthal, Phanish Puranam
August 2, 2022
Organizations increasingly need to adapt to challenges in which search and coordination cannot be decoupled. In response, many have experimented with “agile” and “flat” designs that dismantle traditional forms of hierarchy to harness the distributed knowledge of specialized individuals. Despite the popularity of such practices, there is considerable variation in their implementation as well as conceptual ambiguity about the underlying premise. Does effective rapid experimentation necessarily imply the repudiation of hierarchical structures of influence? We use computational models of multiagent reinforcement learning to study the effectiveness of coordinated search in groups that vary in how they influence each other’s beliefs. We compare the behavior of flat and hierarchical teams with a baseline structure without any influence on beliefs (a “crowd”) when all three are placed in the same task environments. We find that influence on beliefs—whether it is hierarchical or not—makes it less likely that agents stabilize prematurely around their own experiences. However, flat teams can engage in excessive exploration, finding it difficult to converge on good alternatives, whereas hierarchical influence on beliefs reduces simultaneous uncoordinated exploration, introducing a degree of rapid exploitation. As a result, teams that need to achieve agility (i.e., rapid satisfactory results) in environments that require coordinated search may benefit from a hierarchical structure of influence—even when the apex actor has no superior knowledge, foresight, or capacity to control subordinates’ actions.
Özgecan Koçak, Phanish Puranam
January 7, 2022
Coordinated action within and between organizations is easier when individuals share communication codes—mappings between stimuli and labels. Because codes are specific to the groups within which they arise as conventions, collaboration across organizational units that have developed their own distinctive codes is often difficult. However, not all code differences are equal in their implications for communication difficulty and the capacity of individuals starting out with different codes to develop a shared code. Using computational models, we develop a theory about the nature of differences in initial communication codes and how they impact convergence on a common code. Our results show that the difficulty of code convergence lies not as much in learning new codes as in unlearning existing ones. The most severe challenges to communication stem from “code clashes” where codes contain different mappings between the same labels and stimuli. Furthermore, clashes that arise when agents have developed their individual codes in different task environments but draw on a common set of labels are likely to be the hardest to recover from, reflecting the perils of being “separated by a common language.”
Computers in Human Behavior Reports
Özgecan Koçak, Sanghyun Park, Phanish Puranam
May 1, 2022
Ambiguity and semantic differences are each known to be independent sources of communication difficulty. However, we show using computational models that ambiguity can compensate for semantic differences across communicators. Given the heterogeneity of humans with which artificial systems interact, semantic differences will be the norm. Therefore each time a machine starts to communicate with a new user, our results suggest it will do well to start with a moderately ambiguous code in order to more effectively bridge semantic differences. We dub this the “adaptive ambiguity” hypothesis.
Başak Topaler, Özgecan Koçak, Behlül Üsdiken
March 8, 2021
The theory of strategic balance argues that organizations that are neither too similar to nor too distinct from their rivals will be best positioned to meet competing demands for legitimacy and competition. This is because a similar identity to other organizations signals conformity, thus generating legitimacy, while adopting a distinctive identity through differentiation provides competitive advantage. Recent studies have noted that various combinations of conformity and differentiation tactics can achieve “optimal distinctiveness,” which, depending on the particular competitive landscape, may be low, moderate, or high. This study disentangles the effect of distinctiveness in a landscape from the effects of conformity to and differentiation from ancestral identities that serve as templates for new identities. Taking a configurational approach, we explore whether distinctiveness, proximity to an ancestral identity, hybridization of multiple ancestral identities, and vertical or horizontal differentiation are necessary or sufficient, alone or in combination, to generate appeal for new identities.
Journal of Organization Design
August 28, 2020
When members of an organization share communication codes, coordination across subunits is easier. But if groups interact separately, they will each develop a specialized code. This paper asks: Can organizations shape how people interact in order to create shared communication codes? What kinds of design interventions in communication structures and systems are useful? In laboratory experiments on triads composed of dyads that solve distributed coordination problems, we examine the effect of three factors: transparency of communication (versus privacy), role differentiation, and the subjects’ social history. We find that these factors impact the harmonization of dyadic codes into triadic codes, shaping the likelihood that groups develop group-level codes, converge on a single group-level code, and compress the group-level code into a single word. Groups with transparent communication develop more effective codes, while acyclic triads composed of strangers are more likely to use multiple dyadic codes, which are less efficient than group-level codes. Groups of strangers put into acyclic configurations appear to have more difficulty establishing “ground rules”—that is, the “behavioral common ground” necessary to navigate acyclic structures. These coordination problems are transient—groups of different structures end up with the same average communication performance if given sufficient time. However, lasting differences in the code that is generated remain.
Strategic Management Journal
Greta Hsu, Balázs Kovács, Özgecan Koçak
August 15, 2019
In this study, we contribute to strategy and organizational theories of organizational adaptation by developing theory about the kinds of customers that facilitate an organization's ability to adapt to changing demand-side conditions. We propose that customers who have previously interacted with diverse types of organizations in the market convey informationally rich feedback that better enables organizations to understand and adapt to change—particularly in more rapidly changing con- texts. We further expect that organizations that position themselves congruently with market preferences will be stronger market competitors. We test and find support for our arguments using a unique dataset of over 8,000 canna- bis dispensaries operating in seven states that were listed on Weedmaps.com between July 2014 and June 2016.
Greta Hsu, Özgecan Koçak, Balázs Kovács
January 30, 2018
When recreational cannabis dispensaries first entered the U.S. market in 2014, how did incumbent medical cannabis dispensaries react? Did they emphasize their distinct identity as medical providers, distancing themselves from recreational dispensaries and those consumers who consume cannabis recreationally? Or did they downplay their medical orientation to compete directly for potential resources? In this study, we propose that how incumbent organizations position their identities in response to increasing competition from an emerging rival form depends on key audiences’ acceptance of the new form. Using data on the evolving cannabis markets in the states of Colorado and Washington during the year following the initial emergence of the recreational category, we find a sharpening of identity among medical dispensaries in communities with low voter support for recreational-use legalization. Medical dispensaries accentuated the medical orientation of their identities as recreational dispensaries increasingly set up operations and as buyers inclined more toward recreational use. In contrast, we find a blurring of medical/recreational identity in communities where voters demonstrated support for recreational-use legalization in the state-level ballot. Overall, the theoretical framework we advance integrates cultural and strategic approaches by explicitly considering conflict in different audiences’ beliefs about the legitimacy of products and its implications for market producers seeking to connect with and appeal to current/potential consumers.