This presentation from the EURO 2016 conference in Poznan, Poland, and from the GDN conference in Bellingham, WA, USA, joint work with Leroy White of Warwick Business School, shows how combining formal and informal organizational networks enables decisions to flow more freely around organizations, but at a cost, leading to an optimal size of informal organizational networks. If organizations can control these, this leads to implications for optimal information flows in companies.
In the UK, voters elect a Member of Parliament who is there to represent the views of their constituents. This is representative democracy, and the UK has survived pretty well with this form of government. It is one of the many things that the Romans Have Done For Us.
Members of Parliament are supposed to do what their constituents tell them to do. They may have loyalty to the political party to which they belong, but they should, at least in theory, represent the views of their constituents.
The recent referendum on whether the UK remains a part of, or leaves, the European Union, has caused a great deal of uncertainty, and it is clear, when you think of it, why this is so.
Consider the stylized map of the UK below, where the country is split into three constituencies. Each constituency has 1 million electors, who all vote.
Constituency A votes 800,000 Leave : 200,000 Remain;
Constituency B votes 400,000 Leave : 600,000 Remain; and
Constituency C votes 400,000 Leave : 600,000 Remain.
This means that there is a total of 800,000 + 400,000 + 400,000 = 1,600,000 voting for Leave; and 200,000 + 600,000 + 600,000 = 1,400,000 voting for Remain.
This is democratic. The will of the people is that, by a sizeable majority, Leave wins.
However, when this is ratified in Parliament*, by the representatives of the people, the consituents’ MPs, the following happens:
The MP for Consituency A votes Leave;
The MP for Consitutency B votes Remain;
The MP for Consituency C votes Remain.
We are then left in the paradoxical position that a referendum result‡ cannot – under a representative democracy system – be implemented by the MPs.
This is a key constitutional question, and one that cannot be solved by Parliament or the Judiciary†. This is a fundamental issue for British (and European) democracy. And its importance cannot be overstated.
* there is a fierce debate on which body needs to invoke Article 50(2) of the Treaty of European Union, but let us assume that Parliament would make this decision ‘in accordance with its own constitutional requirements’ under Article 50(1).
† it is clear that the decision will be the subject of Judicial review, right up to the Supreme court, but this will merely be a judicial rather than a democratic decision.
‡ this is not quite the situation in the actual Brexit referendum result (although there is no way of telling, as MPs’ constituencies are different from referendum counting districts), but the fact remains that the result of a referendum can be inconsistent with implementation under representative democracy.
Update 3 November 2016: The High Court (subject to appeal to the Supreme Court) has confirmed that Parliament should decide how to implement withdrawal, as the powers of Royal Perogative would have an impact on Statute, which is not normally the case when treaties are made or revoked. Brexit is a special case, as it would overturn Statute in a way that was not envisaged in the European Communities Act 1972. The full judgment is here).
Aircraft aren’t cheap. Neither are airline tickets. But how much of that airline ticket is made up of the cost of the aeroplane?
If we assume a relatively efficient modern airliner, say a 777, a 30-year lifetime, 3500 hours per year, and an average speed of 500mph, that produces a total distance of 52,500,000 miles. Which is quite a lot.
If you were to knock on Boeing’s door, they could sell you one for $320 million. Volume discounts are, I am told, available.
So, assuming straight line depreciation, along with many, many other assumptions, that’s $6.10 per mile. At 350 or so passengers, that is around
2 cents per mile
Or, for a 3000 mile (transcontinental or transoceanic) flight, a total of sixty dollars. Which is perhaps more than I expected.
Amazon FC are playing in the Euros (the UEFA football championship). Or at least that’s what could be inferred from my name badge.
In fact, Amazon FC is one of the Amazon fulfilment centres, located in the Polish town of Poznań, location of the 28th European conference on Operational Research.
The fulfilment centre is huge – with a million separate items stocked, and up to a million items being processed every day – and is just one of a network of existing sites around Europe and around the world, the locations of which are themselves optimized to minimize cost.
One of the many interesting facts about the tour was the way that Amazon store stock on their shelves. Like any other business, they want to minimize fixed costs. One way they can do this is to maximize the density of items stored on their shelves. Unlike in my Mini factory visit (which will be the subject of a later post), Amazon does not run a just-in-time stock system. They are happy(ish) to hold stock on the basis that their customer will have it quickly and will not have to wait for it to be backordered. Amazon was founded on the basis of being able to supply items that only a few people will want – the so-called long tail – itself the subject of a book available on, where else, Amazon… the upshot of which is that if you rank the most popular to the least popular items sold on one axis, and take a logarithm of the number of these items sold on the other, it will make a nice straight line (a Zipf distribution for those interested). So, Amazon will hold on to some items for years on the basis that someone, somewhere, sometime, will want to buy it.
So, Amazon needs to store these millions of items. While most things are controlled and optimized by computer, they leave it down to human intuition as to where to store items – albeit guided by optimization algorithms.
Instead of giving a specific destination for each stock item (basically a very large grid reference), they give their employees a general area into where to store items. The idea behind this is that when you first fill a location with stock, the space-packing density will be high as items fit next to each other. But as items are removed and sold, spaces will be created meaning that you are effectively paying to store air. So Amazon allows its employees to use these spaces to store more items – even if they are unrelated to each other. Of course, the system keeps track of stock locations, but by doing things this way, the efficiency of the operations is improved, and less space is required for storage.
There is a similar example of adaptive organization used by Southwest airlines in my article The Complexity of the Corporation.
“We discuss the notion of complexity as applied to firms and corporations. We introduce the background to complex adaptive systems, and discuss whether this presents an appropriate model or metaphor to be used within management science. We consider whether a corporation should be thought of as a complex system, and conclude that a firm within an industry can be defined as a complex system within a complex system.Whether we can say that the use of complexity research will fundamentally improve firm performance will depend on the effect on success derived from its application.”
Unfortunately, our Byelaws have been lost. The Government can’t find them. They are not even on display:
“But the plans were on display . . .”
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a torch.”
“Ah, well the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur”, yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying Beware of the Leopard.”
You see, byelaws are important. Not as important, as, say, the Brexit referendum, but important nonetheless. Recently, Alan Rusbridger, erstwhile editor of The Guardian and incumbent Principal of Lady Margaret Hall, assisted the Hampstead Heath Constabulary with their enquiries as to an alleged offence of using a camera tripod without a permit. Byelaw broken. £60 fine. Banged to rights. And of course, if you don’t pay up, you go to jail.
It is for this reason that Her Majesty’s Government doesn’t trust Town Halls to write their own laws. Byelaws need to be rubber stamped by the Secretary of State to make sure that the i’s are crossed and the t’s are dotted. In case, well, anyone goes to jail for a crime they didn’t commit, and the A-team have to get involved.
Of course, you could write to every local authority to ask for their byelaws, but I would imagine that they are protected by a leopard somewhere on the Civil Service pay scale. Instead, I wrote to the Department of Communities and Local Government, who rather helpfully gave me a list of every byelaw that was graced by their rubber stamp. That was nice of them. But, amongst various caveats, was this:
” I should further explain that the list of byelaws covers only byelaws made by this Department, as this Department does not hold any records of byelaws confirmed by the Home Office. You may wish to consult the Home Office on any byelaws confirmed preceding this date.”
So, albeit a couple of years later, I wrote to the Home Office, who also helpfully replied:
“The Home Office does not hold the information which you have requested. The Bylaws unit moved from the Home Office to the Department for Communities and Local Government (DCLG) around 10 years ago.”
So, there we have it, the Government has lost the byelaws from before 2002. Or maybe they are in fact in the display department after all. Guarded by leopards.
This paper with François Collet of ESADE and Daniela Lup of the LSE analyzes the emergence of the strategic management filed showing the benefits of network brokerage are stronger during the early phase of development and diminish over time.
Through exposure to heterogeneous sources of knowledge, actors who broker between unconnected contacts are more likely to generate valuable output. We contribute to the theory of social capital of brokerage by considering the impact of field maturity. Using longitudinal data from the field of strategic management we find that the benefits of network brokerage are stronger during the early stages of field development and diminish as the field matures. The results of our study call for further research on the interplay between network structures and processes of field emergence.
This paper, published with colleagues from Warwick University and Cambridge University: Petra Vertes, Ruth Nicol, Sandra Chapman, Nicholas Watkins, and Edward Bullmore was the result of inter-disciplinary work funded by the EPSRC – the Engineering and Physical Sciences Research Council (Grant number EP/H02395X/1). We investigated the similarities in the network structure financial markets and brain networks.
Although metaphorical and conceptual connections between the human brain and the financial markets have often been drawn, rigorous physical or mathematical underpinnings of this analogy remain largely unexplored. Here, we apply a statistical and graph theoretic approach to the study of two datasets – the time series of 90 stocks from the New York stock exchange over a 3-year period, and the fMRI-derived time series acquired from 90 brain regions over the course of a 10-min-long functional MRI scan of resting brain function in healthy volunteers. Despite the many obvious substantive differences between these two datasets, graphical analysis demonstrated striking commonalities in terms of global network topological properties.
The first class honours degree is the ultimate prize for UK undergraduates. It is a symbol of being the best of the best. Undoubtedly, this is the case for some students. Yet the statistics for the number of first class honours degrees awarded by UK Higher Education Institutions (‘universities’ to most of us) shows, well, things aren’t what they used to be.
There is a competitive problem for universities. Undoubtedly, awarding first class degrees is attractive to students, their families, and employers. It is a symbol of perceived quality. And so, there is an incentive to increase the number of firsts awarded. Which makes competitors less attractive, which leads them to award more firsts, which… well, you can see the problem.
And the figures say it all. In the graph below, I have plotted the percentage of firsts awarded in the UK. Over a 11 year period, this percentage has doubled. While arguably being not quite exponential growth, the upward trajectory is clear. Which indicates that this problem isn’t going away.
But what to do? Put a government imposed limit on the percentage of firsts allowed? That would work, but universities would argue that they have a better intake so should be allowed to award more. Scrap the degree classification and report marks? That would be useful, but there is no comparison between students. Maybe a rank position would work. Yes, that may be the best solution. But then how do you compare between universities? Self-confident universities need to stand up and take the lead in declaring that their first is not the same as another university’s first. The question is which ones – and when?
Lovelace College has arrived in Oxford this morning. And lots of cars. Endeavour must be in town…