Building resilient organizations: The roles of top-down vs. bottom-up organizing
Stephan Leitner
TL;DR
The paper investigates how top-down and bottom-up organizing affect organizational resilience to environmental disruptions using an agent-based NK framework. By simulating $N$-dimensional binary decision problems with $K$ interdependencies under controlled shocks, it shows that bottom-up task allocation generally improves absorption of disruptions, while top-down designs may outperform in recovery under particular modular structures and incentive conditions. The study highlights the pivotal role of modularity, reallocation logic (utility-based vs mirroring), and incentives in shaping resilience, and suggests that decentralized, flexible structures better equip organizations to cope with a wider range of shocks. Practically, the findings advocate for fostering bottom-up, incentive-aligned collaboration to enhance resilience, while acknowledging contexts where centralized design can aid recovery. The work also points to future research on resilience in networks of interdependent organizations and potential shifts in interdependencies under disruption.
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.