EDACafe Weekly : Elastix Clocks Reduce Margins. Landing in Barcelona. - June 09, 2008

Interview to the founders of Elastix in 2008, interesting reflections on starting up a company (technology based) and working in Silicon Valley and Barcelona.

http://www10.edacafe.com/nbc/articles/view_weekly.php?articleid=541321&page_no=1

IG Nobel Prize in Management

Extracted from Wired Magazine:

" Management Prize
Those who've recently been passed over for a promotion might not be pleased to hear about the winner of the management prize. Alessandro Pluchino, Andrea Rapisarda, and Cesare Garofalo of the University of Catania, Italy demonstrated that organisations can become more efficient by randomly promoting people.

Their paper: "The Peter Principle Revisited: A Computational Study", was published in the Italian journal, Physica A, and took a mathematical look at how people are promoted. They found that appointing people to higher roles at random could increase most companies' efficiency."

Article Information - from http://arxiv.org/abs/0907.0455

The Peter Principle Revisited: A Computational Study

Authors: Alessandro Pluchino, Andrea Rapisarda, Cesare Garofalo

(Submitted on 2 Jul 2009 (v1), last revised 29 Oct 2009 (this version, v3))

Abstract: In the late sixties the Canadian psychologist Laurence J. Peter advanced an apparently paradoxical principle, named since then after him, which can be summarized as follows: {\it 'Every new member in a hierarchical organization climbs the hierarchy until he/she reaches his/her level of maximum incompetence'}. Despite its apparent unreasonableness, such a principle would realistically act in any organization where the mechanism of promotion rewards the best members and where the mechanism at their new level in the hierarchical structure does not depend on the competence they had at the previous level, usually because the tasks of the levels are very different to each other. Here we show, by means of agent based simulations, that if the latter two features actually hold in a given model of an organization with a hierarchical structure, then not only is the Peter principle unavoidable, but also it yields in turn a significant reduction of the global efficiency of the organization. Within a game theory-like approach, we explore different promotion strategies and we find, counterintuitively, that in order to avoid such an effect the best ways for improving the efficiency of a given organization are either to promote each time an agent at random or to promote randomly the best and the worst members in terms of competence.

Comments:	final version published on Physica A, 10 pages, 4 figures, 1 table (for on-line supplementary material see the link: this http URL)
Subjects:	Physics and Society (physics.soc-ph); Computer Science and Game Theory (cs.GT); Adaptation and Self-Organizing Systems (nlin.AO); Popular Physics (physics.pop-ph)
Journal reference:	Physica A 389 (2010) 467-472
DOI:	10.1016/j.physa.2009.09.045
Cite as:	arXiv:0907.0455v3 [physics.soc-ph]

Submission history

From: Alessandro Pluchino [view email]
[v1] Thu, 2 Jul 2009 18:02:48 GMT (151kb)
[v2] Fri, 4 Sep 2009 12:44:50 GMT (151kb)
[v3] Thu, 29 Oct 2009 14:10:40 GMT (154kb)