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Modeling the problem solving dynamics in complex engineering projects

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Coordination among many interdependent actors in complex product development projects is recognized as a key activity in organizational theory. It is well-known that this coordination becomes progressively more difficult with project size, but the authors do not yet sufficiently understand whether this effect can be controlled with frequent and rich communication among project members, or whether it is inevitable. Recent work in complexity theory suggests that a project might form a "rugged landscape", for which performance deterioration with system size is inevitable. This article builds a mathematical model of a complex design project that is divided into components (subproblems) and integrated back to the system. The model explicitly represents local component decisions, as well as component interactions in determining system performance. The model shows, first, how a rugged performance landscape arises even from simple components with simple performance functions, if the components are interdependent. Second, the authors characterize the dynamic behavior of the system analytically and with simulations. They show under which circumstances it exhibits performance oscillations or divergence to design solutions with low performance. Third, they derive classes of managerial actions available to improve performance dynamics, such as modularisation, immediate communication and system optimisation. Some migrating actions have not yet received widespread attention, such as controlling "effective" system size and exchanging preliminary information.

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