Computational Enterprise Models: Towards Analysis Tools for Designing Organizations

Engineers who design physical structures like bridges or buildings have long been supported by mathematical techniques, and more recently, by computational analysis techniques like the Finite Element Method. Engineers use these "virtual prototypes" during design, and perform "virtual experiments" to validate and refine new structural systems and even new theories of structural mechanics. The goal of the Virtual Design Team (VDT) research program conducted by the authors and their colleagues at Stanford University is to develop computational simulation tools that: (1) can be used by managers to generate and test alternative "virtual organizations" to systematize the practice of organizational (re)engineering, and (2) can be used by organizational researchers to perform "virtual experiments" to aid in validating and refining new theories describing the organizational dynamics of knowledge-intensive work. The second version of our simulation model, VDT-2-has been successfully validated by comparing its predictions with observations of multiple industrial design teams. VDT-2 thus provides significant new capabilities for analyzing the structure, policies and communication tools of project organizations engaged in complex, but routine, engineering tasks and for generating detailed performance predictions at the level of organizational "actors"-individuals or small, homogeneous subteams. This chapter explains the motivation for our initial focus on routine, project-oriented work and lays out a series of conceptual extensions that we believe will allow the framework to be used for modeling organizations at the enterprise level.