Introduction to Theory of Control in Organizations explains how methodologies from systems analysis and control theory, including game and graph theory, can be applied to improve organizational management. The theory presented extends the traditional approach to management science by introducing the optimization and game-theoretical tools required to account for the special nature of human beings being viewed as control objects.
The book introduces a version of mechanism design that has been customized to solve the problems that today’s managers must contend with. All mathematical models and mechanisms studied are motivated by the most common problems encountered by managers in firms and non-profit organizations.
Requiring no prior knowledge of game theory or mechanism design, the book includes a systematic introduction to the underlying methodology of modern theory of control in organizations. The authors use formal methods to construct robust and efficient decision-making procedures which support all aspects and stages of management activity over all decision horizons—from operational to strategic management.
The mathematical and methodological backgrounds of the organizational mechanisms discussed are not limited to game theory but also include systems analysis, control theory, operations research, and discrete mathematics.
The book includes a set of exercises in each chapter—from simple to advanced—that provide the reader with the understanding required to integrate advanced methods of optimization, game theory, and mechanism design into daily managerial practice.
Table of Contents
Control and Mechanisms in Organizations
Control Problems in Organizational Systems
Models of Decision Making
Basics of Game Theory
Classification of Control Problems in Organizational Systems
Examples of Control Mechanisms
Taxation and Pricing Mechanisms
Incentive Mechanisms for Cost Reduction
Basic Incentive Mechanisms
Incentive Mechanisms in Multi-Agent Systems
Mechanisms of Distributed Control
Incomplete Information in Organizational Systems
Revelation of Information
Mechanisms of Resource Allocation
Mechanisms of Transfer Prices
Basic Model of Adverse Selection
Informational Control Mechanisms
Model of Informational Control
Applied Models of Informational Control
Mechanisms of Organizational Structure Design
Problems of Organizational Hierarchy Design
Models of Organizational Structure Design
General Model of Management Hierarchy
Optimal Tree-Shaped Hierarchies
Topics for Self-Study
Vladimir Burkov, Doctor of Sc., Professor, Full member of Russian Academy of Natural Sciences.
In 1960s Vladimir Burkov was the father of the academic school of control in organizations. Now he is the author of dozens books on control theory, game theory, graph theory, discrete optimization, and management, a vice-president of IPMI-SOVNET, and the manager of many successful consulting projects. V. Burkov is a head of the department at the V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences, the leading academic center of Russian control theory.
Mikhail Goubko, Doctor of Sc., Professor of Moscow Institute of Physics and Technology.
Mikhail Goubko belongs to the core of the academic school of control in organizations. He studies mathematical methods of complex systems' structure optimization and their applications in different fields. Works at the V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences.
Nikolay Korgin, Doctor of Sc., Professor of Moscow Institute of Physics and Technology.
Nikolay Korgin belongs to the core of the academic school of control in organizations. His interests include mechanism design and experimental game theory along with their applications in management. He has rich experience in research and teaching the theory of control in organizations. Works at the V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences.
Dmitry Novikov, Doctor of Sc., Professor, Head of Control Sciences Department at the Moscow Institute of Physics and Technology, Corresponding member of Russian Academy of Sciences.
Dmitry Novikov is the leader of the theory of control in organizations. He is the author of dozens of books and hundreds of papers on different aspects of control and management. D. Novikov is a deputy director of the V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences.