Assessing performance tradeoffs in hierarchical organizations using a diffusive coupling model

Abstract: We study a continuous-time dynamical system of nodes diffusively coupled over a hierarchical network to examine the efficiency and performance tradeoffs that organizations, teams, and command and control units face while achieving coordination and sharing information across layers. Specifically, after defining a network structure that captures real-world features of hierarchical organizations, we use linear systems theory and perturbation theory to characterize the rate of convergence to a consensus state, and how effectively information can propagate through the network, depending on the breadth of the organization and the strength of inter-layer communication. Interestingly, our analytical insights highlight a fundamental performance tradeoff. Namely, networks that favor fast coordination will have decreased ability to share information that is generated in the lower layers of the organization and is to be passed up the hierarchy. Numerical results validate and extend our theoretical results.