Structure or flow? Designing knowledge based organizations

In knowledge-based economies production processes require joint effort by a number of individuals with very specific know-how and organizations play a role as integrator of a variety of individual knowledge. As knowledge specialization increases, however, the integration becomes a difficult endeavor. Escalating specialization and reliance on creativity of individual specialists may weaken the effectiveness of authority-based hierarchical mechanisms, this paper suggests that in order to design knowledge-based production processes, organizations need to design the flow, focusing on how reciprocal exchange emerges in networks of co-workers. We use a computer agentbased model – COOPNET – as a theoretical laboratory to explore the emergence of cooperation in an intra-organizational exchange network. In this virtual environment, we address how individual rewiring and reciprocation strategies interplay with the features of the organization context. More precisely, we test a number of hypotheses on how the freedom assigned to unilaterally terminate an exchange relationships interact with rewarding policies and organization topology and reinforces emerging aggregate cooperation.