Complex technological systems are prevalent in business and society. Typical examples include supply chains spanning multiple independent corporations, internet trading sites for business-to-business commerce, and health care delivery systems. However, the technological complexity of these systems poses numerous managerial challenges. These challenges are further amplified when management control is decentralized and delegated to multiple independent economic players. Therefore, to effectively manage such decentralized technological systems, one must balance and reconcile the conflicting objectives of the different economic players. The purpose of this project is to develop a conceptual framework that captures both the technological complexity and the decentralized nature of these systems, and to derive concrete insights about their management. The specific activities to be pursued include the development of mathematical and economic models, and the subsequent investigation of systems with special structure that arise in supply chain management and services management. The mathematical formalism will be tested empirically on the US dialysis delivery system, which best exemplifies the managerial challenges that underlie decentralized technological systems. Computer simulation models illustrating the main managerial challenges will also be developed, and used as an experiential teaching devise for MBA students.
