AN OVERVIEW OF DECISION NETWORKS AND ORGANIZATIONS

This paper summarizes recent results on both binary and M-ary distribu ted hypothesis testing problems with decision makers (DM's) organized in structured decision networks. The general problem of finding an opt imal organizational structure and decision strategy for such networks is formulated as a functional optimization problem. A normative model to study the effect of interactions between task structure and organiz ational design on the performance of hierarchical organizations is pre sented. A binary signal detection model is considered to illustrate th e joint impact of organizational design and of task environment on the organizational decision performance. The concept of a congruent organ izational structure (i.e., a structure that achieves centralized perfo rmance with minimal communication) is introduced, and a graph decompos ition algorithm to synthesize congruent structures is discussed.