Computational and Mathematical Organization Theory 1:1 (1995): 39-56 9 1995 Kluwer Academic Publishers, Manufactured in the Netherlands Computational and Mathematical Organization Theory" Perspective and Directions KATHLEEN M. CARLEY Department of Social and Decision Sciences, Carnegie Mellon Unive;sity, Pittsburgh, PA 15213 Email: kathleen.carley@cs.cmu.edu Abstract Computational and mathematical organization theory is an interdisciplinary scientific area whose research members focus on developing and testing organizational theory using formal models. The community shares a theoretical view of organizations as collections of processes and intelligent adaptive agents that are task oriented, socially situated, technologically bound, and continuously changing. Behavior within the organization is seen to affect and be affected by the organization's position in the external environment. The community also shares a methodological orientation toward the use of formal models for developing and testing theory. These models are both computational (e.g., simulation, emulation, expert systems, computer-assisted numerical analysis) and mathematical (e.g., formal logic, matrix algebra, network analysis, discrete and continuous equations). Much of the research in this area falls into four areas: organizational design, organizational learning, organizations and information technology, and organizational evolution and change. Historically, much of the work in this area has been focused on the issue how should organizations be designed. The work in this subarea is cumulative and tied to other subfields within organization theory more generally. The second most developed area is organiza- tional learning. This research, however, is more tied to the work in psychology, cognitive science, and artificial intelligence than to general organization theory. Currently there is increased activity in the subareas of organiza- tions and information technology and organizational evolution and change. Advances in these areas may be made possible by combining network analysis techniques with an information processing approach to organizations. Formal approaches are particularly valuable to all of these areas given the complex adaptive nature of the organiza- tional agents and the complex dynamic nature of the environment faced by these agents and the organizations. I. Introduction Computational and mathematical approaches to the study of organizations have played an influential, though often overlooked, role in the development of organizational theory. Essen- tially, as an organizational phenomena became sufficiently well understood that it could be represented and analyzed formally the study of that phenomena and the associated organizational theory and formal models divided off from mainstream organizational theory and became its own, generally applied, subfield. Examples include the transformation of scientific management into operations research, the movement of organizational behavioral analysis of human response into the subfields of ergonomics and human factors, and the transformation of task analysis and experts into expert systems. Even if we discount these large scale applications, we still find that formal models have played an important and critical role in the field of organizations. Computational and mathematical models helped to define issues in organizational formalism (Hage, 1965), bounded rationality (Cyert and March, This paper was previously presented at the 1995 Informs meeting in Los Angeles, CA.