Permeable Boundaries in Organizational Learning: Computational Modeling Explorations

In this paper we investigate the nature of the organizational boundary in the context of organizational learning. Using the Organizational Learning Systems Model (OLSM (Schwandt, 1997) and building upon computational organization theory (Carley & Prietula, 1994b) we precisely define boundary permeability and decompose it into constituent parts: information gathering efficiency, search intensity and knowledge diffusion effectiveness. Hypotheses are developed and tested using data from 5,500 artificial organizations. We find strong support for the usefulness of boundary permeability as a predictor of organizational learning and agent survival and suggest ways to operationalize this construct in future laboratory and field studies. The recent collapse of the internet bubble highlights the importance of remaining in tune with the environment during times of rapid change. In the context of organizational learning research (Schwandt & Marquardt, 2000), we examine information flow through an organization's boundary and its impact on the organization's survivability. As a mechanism for studying emergent structures in complex social systems, we computationally model a nonlinear application of structuration theory (Giddens, 1984) as a mechanism for organizational learning. In addition, organizational learning literature, offers a rich vein supporting organizational learning as a real, and measurable phenomenon at the collective level In this paper we use computational modeling to explore explicitly the impact of various levels of boundary permeability on organizational learning with the understanding that information and knowledge are distributed both inside and outside the collective (Tsoukas, 1996). We test this broad notion using agent-based modeling techniques to explore agent activities at the organization's boundary and how these micro-effects are aggregated at the organizational level and enable the collective to sense the nature of its environment through its perceptual filter (Daft & Weick, 1984; Hedberg, 1981) as is described in organizational learning. Our intent is to test the notion that " boundary permeability, " as a measure of the collective's ability to sense its environment, that is, gather information external to the organization and diffuse it internally, is a robust and cohesive construct at the organizational level. We do this by defining boundary permeability in the context of an agent-based view of organizations (Carley & Prietula, 1994a), and by varying aspects of agent level interaction at the boundary. Through a series of virtual experiments, we measure boundary permeability and its impact on organizational learning variables and organizational outcomes. We address the research question: What is the relationship, if any, between boundary permeability and …