Innovation Criterion for Evaluating the Organizational Effectiveness of a Retail Chain using a Complex Adaptive System Model and the SWARM Simulation Environment

In this paper we examine the application of a Complex Adaptive System (CAS) on studying the relative organizational effectiveness of Centralized and Decentralized Retail Chains. The criterion for the evaluation of this effectiveness is the rate of creation of new (innovative) ideas, related to management policies and practices, by the Shops of the Chain, which are the agents of the CAS Model. The diffusion of these innovations throughout the Organizational structure and finally their adoption as a new standard practice or policy by the whole chain, is also an important dimension of the evaluation criterion. We provide here some basics for the CAS modeling and their connection with the traditional Systems Dynamics modeling, justifying as well our decision to use the CAS formalism. We examine a generic Retail Chain organization, the corresponding structure of the CAS model and finally we give details on the simulation of the model with the SWARM software system. We produce various scenaria by changing the chain’s main structural parameters and finally we discuss the results obtained and draw conclusions on the relative organizational effectiveness of centralized and decentralized Retail Chains.