Distributed decision making in complex organizations: the adaptive enterprise

In this paper, we give a tutorial overview of how the convergence of business decision making (BDM), information technology and computer aided process decision making can make organizations adaptive. One framework for advancing the conflux of these ideas is provided by distributed network theory and non-equilibrium thermodynamics. In this theory, the integrated system of decision makers, software and physical devices are viewed as a network of semi-autonomous activities that interact through boundary conditions. The dynamics of such systems can be stabilized using inventory and flow control. Decision making based on value analysis leads to trajectories that are stable and minimize cost. We describe the basis for evaluating business performance using the intrinsic value of new processes and products. We finish by reviewing very briefly how the drive towards excellence can make it easier for universities and industry to carry out cooperative R&D. © 2004 Elsevier Ltd. All rights reserved.