An overview of decision networks and organizations

The paper summarizes recent results on both binary and M-ary distributed hypothesis testing problems with decision makers (DMs) organized in structured decision networks. The general problem of finding an optimal organizational structure and decision strategy for such networks is formulated as a functional optimization problem. A normative model to study the effect of interactions between task structure and organizational design on the performance of hierarchical organizations is presented. A binary signal detection model is considered to illustrate the joint impact of organizational design and of task environment on the organizational decision performance. The concept of a congruent organizational structure (i.e., a structure that achieves centralized performance with minimal communication) is introduced, and a graph decomposition algorithm to synthesize congruent structures is discussed