Intra-Organizational And Inter-Organizational Resource Allocation In Two-stage Network Systems

Resource allocation is the process by which an organization allocates limited resources to different members of an organization to maximize its overall goals.Due to the limited resources(resources are always scarce),how to make rational use of existing resources to achieve maximum profitability has always been one of the important research topics in the field of management science.Obviously,the two-stage production structure is a common phenomenon in the real world.Taking commercial banks as an example,the bank's production process can be divided into two stages:deposit taking and investment profit.The main outputs from the first stage are deposits,and then the second stage is to lend or invest with deposits from the first stage.Considering different decision-making environments,namely,centralized decision making and decentralized decision making,we divide the production system with multiple identical two-stage structures into two types.The first one is a centralized organizational system,in which there is only one decision maker who makes a production plan,and the second one is a decentralized organizational system,with decision makers from more than one departments involved in the development of production plans.We then make the optimal resource allocation plan for these two organizational systems.This study adopts bi-level programming when building models,which not only maximizes the organizational effectiveness in the upper-level,but also calculates the production efficiency of each DMU and sets lower bounds to constrain the efficiency value for individual members in the lower-level,guaranteeing the fairness of resource allocation to a certain extent.In addition,this study also considers different intermediate resource allocation modes for the centralized and decentralized organizational systems.In the centralized organizational system,we discuss different ways of linking intermediate outputs constraints,the "free link"value case and the "fixed link"value case,and prove that the organizational effectiveness of the"free link"value case is greater than that of the"fixed link"value case.In the decentralized organizational system,we study two different modes of intermediate resource allocation:one is the fixed intermediate resource allocation mode(one-to-one),that is,resources can only be allocated between the upstream and downstream of the same supply chain.The other is the free intermediate resource allocation mode(one-to-many),that is,resources can be cross-allocated between upstream and downstream of different supply chains.Our study shows that with the same resources,the free intermediate resource allocation mode is more profitable to the organization than the fixed one.This study builds models under the assumption of constant returns to scale(CRS)and variable returns to scale(VRS)for the centralized and decentralized organizational systems,respectively.The proposed models are applied to 17 branches of China Construction Bank in Anhui Province,and the two results under CRS and VRS assumption are compared and analyzed.The results indicate that the proposed method framework can develop effective resource allocation measures for production organization systems,and help decision makers make reasonable production plans under limited resources to achieve optimal overall organizational goals.