On the Peter Principle: An agent based investigation into the consequential effects of social networks and behavioural factors

The Peter Principle is a theory that provides a paradoxical explanation for job incompetence in a hierarchical organisation. It argues that should staff be competent at a given level, their competence may not be implicit at higher levels due to the differences in the skill set required. Furthering the work of a recent investigation into the Peter Principle utilising agent based simulation, this paper explores external factors upon varying promotion strategies to assess efficiency. Through additional elements of social networks and organisational thought, a more representative view of workplace interaction is presented. Results of the simulation found that although the Peter Principle affects efficiency, it may not be to the levels previously suggested. Furthermore promotion on merit provided the most favourable maximum and minimum efficiency margins, given the absence of clear evidence pertaining to the existence of the Peter Principle.