The Price of Governance: A Middle Ground Solution to Coordination in
Organizational Control
Abstract
Achieving coordination is crucial in organizational
control. This paper investigates a middle ground
solution between decentralized interactions and
centralized administrations for coordinating agents
beyond inefficient behavior. We first propose the
price of governance (PoG) to evaluate how such
a middle ground solution performs in terms of effectiveness and cost. We then propose a hierarchical supervision framework to explicitly model the
PoG, and define step by step how to realize the core
principle of the framework and compute the optimal PoG for a control problem. Two illustrative
case studies are carried out to exemplify the applications of the proposed framework and its methodology. Results show that the hierarchical supervision framework is capable of promoting coordination among agents while bounding administrative
cost to a minimum in different kinds of organizational control problems