Designing Workflow Coordination: Centralized Versus Market-Based Mechanisms

Due to the increasingly distributed nature of organizations, distributed scheduling methods have been proposed as alternatives to centralized, hierarchical, topdown production control schemes. While distributed scheduling methodologies are appealing, one must rst address the fundamental questions of when and where such a method is appropriate. This paper seeks to provide an answer to these questions. Using a generalized work ow framework, this paper models and compares the total expected costs of using decentralized and centralized organizational designs to coordinate the ows of information and work. This comparison allows one to de ne the characterisitcs of work environments where distributed scheduling methods are more suitable than hierarchical, top-down production approaches. Finally, from this analysis, one can conclude that distributed scheduling methods work well for systems where information technology is inexpensive relative to production cost, processing times are relatively long, and where the number of agents in the system is not too large.