Computationally modeling organizational learning and adaptability as resource allocation: An artificial adaptive systems approach

A framework for and a computational model of organizational behavior based on an artificial adaptive system (AAS) is presented. An AAS, a modeling approach based on genetic algorithms, enables the modeling of organizational learning and adaptability. This learning can be represented as decisions to allocate resources to the higher performing organizational agents (i.e., individuals, groups, departments, or processes, depending on the level of analysis) critical to the organization's survival in different environments. Adaptability results from the learning function enabling the organizations to change as the environment changes. An AAS models organizational behavior from a micro-unit perspective, where organizational behavior is a function of the aggregate actions and interactions of each of the individual agents of which the organization is composed. An AAS enables organizational decision making in a dynamic environment to be modeled as a satisficing process and not as a maximization process. To demonstrate the feasibility and usefulness of such an approach, a financial trading adaptive system (FTAS) organization is computationally modeled based on the AAS framework. An FTAS is an example of how the learning mechanism in an AAS can be used to allocate resources to critical individuals, processes, functions, or departments within an organization.