Decision-Making Coordination in Hierarchical Systems

Abstract
The work is aimed at analyzing coordination mechanisms of corporate solutions and at studying a number of mechanisms, decision-making processes and information links with the use of hierarchical algorithms of block program ming. The work presents a routine task for high dimensional optimization adequate for the design of hierarchical systems of production companies and corporations, an objective function and a restriction system with composition-block structure. The special methods of block programming, where interaction between the center and the performers corresponds to the centralized and decentralized mechanisms of decision-making coordination in economic systems have been developed for this type of optimization problems. For the analysis of decision-making coordination in big systems, the unique classification of the mechanisms of decision-making coordination in hierarchical systems based on the level of information awareness of the center and the ways to increase this level has been applied. In the systems of the first type, the center is fully informed on the parameters of the objective function of the elements of the system (subsystems) and the set of admissible values of decision-making coordination or seeks to achieve such level of awareness. In this case the decision-making process is carried out in 2 stages. On the first stage, the center finds the optimum coordinating variables; on the second stage, the elements of the bottom level (blocks) sel ect ‘technological’ variables which implementation provides an optimal goal for the center. To achieve greater effectiveness and strict follow-up of the decisions made, the center can use such mechanisms of control as strong penalties. In the systems of another type, the center implements the principles of institutional and indicative management, i.e. it creates an institutional environment (structures, links, restrictions, etc.) for effective functioning of the elements (performers) and delegates it powers on decision-making to achieve the target parameters (indicators) optimal fr om the point of view of the center. It is shown that the convergence of the sequences of the specifying solutions of performers to an optimal decision-making for a system in general seems to be a necessary condition of institutional coordination methods.

Keywords
decomposition of optimization problems, hierarchical systems, coordination models for decision-making

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