Information flows in hierarchical networks and the capability of organizations to successfully respond to failures, crises, and disasters

In this paper we discuss the problem of information losses in organizations and how they depend on the organization network structure. Hierarchical networks are an optimal organization structure only when the failure rate of nodes or links is negligible. Otherwise, redundant information links are important to reduce the risk of information losses and the related costs. However, as redundant information links are expensive, the optimal organization structure is not a fully connected one. It rather depends on the failure rate. We suggest that sidelinks and temporary, adaptive shortcuts can improve the information flows considerably by generating small-world effects. This calls for modified organization structures to cope with today's challenges of businesses and administrations, in particular, to successfully respond to crises or disasters. (c) 2006 Elsevier B.V. All rights reserved.