Emergence of Task Formation in Organizations: Balancing Units' Competence and Capacity

This paper studies the emergence of task formation under conditions of limited knowledge about the complexity of the problem to be solved by an organization. Task formation is a key issue in organizational theory and the emergence of task formation is of particular interest when the complexity of the overall problem to be solved is not known in advance, since, for example, an organization is newly founded or has gone through an external shock. The paper employs an agent-based simulation based on the framework of NK fitness landscapes and controls for different levels of task complexity and for different coordination modes. In the simulations, artificial organizations are observed while searching for higher levels of organizational performance by two intertwined adaptive processes: short-termed search for superior solutions to the organizations' task and, in mid term, learning-based adaptation of task formation. The results suggest that the emerging task formations vary with the complexity of the underlying problem and, thereby, the balance between units' scope of competence and the organizational capacity for problem-solving is affected. For decomposable problems, task formations emerge which reflect the nature of the underlying problem; for non-decomposable structures, task formations with a broader scope of units' competence emerge. Furthermore, results indicate that, particularly for non-decomposable problems, the coordination mode employed in an organization subtly interferes with the emergence of task formation.