Building resilient organizations: The roles of top-down vs. bottom-up organizing

TL;DR

This paper investigates how top-down and bottom-up organizational structures influence resilience to disruptions, using an agent-based model to compare their effectiveness in absorbing shocks and recovering from crises.

Contribution

It introduces an agent-based model to analyze the impact of organizational design on resilience, highlighting the conditions favoring bottom-up or top-down approaches.

Findings

Bottom-up organizations better absorb environmental shocks.

Situations exist where either top-down or bottom-up structures excel.

Organizational resilience depends on the mode of organizing and environmental factors.

Abstract

Organizations face numerous challenges posed by unexpected events such as energy price hikes, pandemic disruptions, terrorist attacks, and natural disasters, and the factors that contribute to organizational success in dealing with such disruptions often remain unclear. This paper analyzes the roles of top-down and bottom-up organizational structures in promoting organizational resilience. To do so, an agent-based model of stylized organizations is introduced that features learning, adaptation, different modes of organizing, and environmental disruptions. The results indicate that bottom-up designed organizations tend to have a higher ability to absorb the effects of environmental disruptions, and situations are identified in which either top-down or bottom-up designed organizations have an advantage in recovering from shocks.