Complexity theory and organizations
Encyclopedia
Complexity theory and organizations, also called complexity strategy or complex adaptive organization, is the use of Complexity theory
in the field of strategic management
and organizational studies
.
Complex adaptive systems (CAS) are contrasted with ordered and chaotic systems by the relationship that exists between the system and the agents which act within it. In an ordered system the level of constraint means that all agent behaviour is limited to the rules of the system. In a chaotic system the agents are unconstrained and susceptible to statistical and other analysis. In a CAS, the system and the agents co-evolve; the system lightly constrains agent behaviour, but the agents modify the system by their interaction with it.
CAS approaches to strategy seek to understand the nature of system constraints and agent interaction and generally takes an evolutionary or naturalistic approach to strategy.
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Complex systems
Complex systems present problems in mathematical modelling.The equations from which complex system models are developed generally derive from statistical physics, information theory and non-linear dynamics, and represent organized but unpredictable behaviors of systems of nature that are considered...
in the field of strategic management
Strategic management
Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments...
and organizational studies
Organizational studies
Organizational studies, sometimes known as organizational science, encompass the systematic study and careful application of knowledge about how people act within organizations...
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Overview
Complexity theory has been used extensively in the field of strategic management and organizational studies. It is used in these domains for understanding how organizations or firms adapt to their environments. The theory treats organizations and firms as collections of strategies and structures. When the organization or firm shares the properties of other complex adaptive systems – which is often defined as consisting of a small number of relatively simple and partially connected structures – they are more likely to adapt to their environment and, thus, survive. Complexity-theoretic thinking has been present in strategy and organizational studies since their inception as academic disciplines.Complex adaptive systems (CAS) are contrasted with ordered and chaotic systems by the relationship that exists between the system and the agents which act within it. In an ordered system the level of constraint means that all agent behaviour is limited to the rules of the system. In a chaotic system the agents are unconstrained and susceptible to statistical and other analysis. In a CAS, the system and the agents co-evolve; the system lightly constrains agent behaviour, but the agents modify the system by their interaction with it.
CAS approaches to strategy seek to understand the nature of system constraints and agent interaction and generally takes an evolutionary or naturalistic approach to strategy.
Early research
Early strategy and organizational theorists emphasized complexity-like thinking including:- Herbert SimonHerbert SimonHerbert Alexander Simon was an American political scientist, economist, sociologist, and psychologist, and professor—most notably at Carnegie Mellon University—whose research ranged across the fields of cognitive psychology, cognitive science, computer science, public administration, economics,...
's interest in decomposable systems and computational complexity. - Karl WeickKarl WeickKarl E. Weick is an American organizational theorist who is noted for introducing the notions of "loose coupling", "mindfulness", and "sensemaking" into organizational studies. He is the Rensis Likert Distinguished University Professor at the Ross School of Business at the University of Michigan...
's loose coupling theory and interest in causal dependencies - Burns and Stalker's contrast between organic and mechanistic structures
- Charles PerrowCharles PerrowCharles B. Perrow is an emeritus professor of sociology at Yale University and visiting professor at Stanford University. He is the author of several books and many articles on organizations, and is primarily concerned with the impact of large organizations on society.-Academic appointments:After...
's interest in the link between complex organization and catastrophic accidents - James March's contrast between exploration and exploitation, which owes a debt to complexity theorist John Holland.
Later research
More recently work by organizational scholars and their colleagues have added greatly to our understanding of how concepts from the complexity sciences can be used to understand strategy and organizations. The work of Dan Levinthal, Jan Rivkin, Nicolaj Siggelkow, Kathleen Eisenhardt, Nelson Repenning, Phil Anderson and their research groups have been influential in their use of ideas from the complexity sciences in the fields of strategic management and organizational studies. Much of this later research integrates computer simulation and organizational studiesComputer Simulation and Organizational Studies
Computer simulation is a prominent method in organizational studies and strategic management. While there are many uses for computer simulation , most academics in the fields of strategic management and organizational studies have used computer simulation to understand how organizations or firms...
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Further reading
- Anderson, P. 1999. Complexity Theory and Organization Science Organization Science. 10(3): 216–232.
- Axelrod, R. A., & Cohen, M. D., 2000. Harnessing Complexity: Organizational Implications of a Scientific Frontier. New York: The Free Press
- Yaneer Bar-YamYaneer Bar-YamYaneer Bar-Yam is an American physicist, systems scientist, and founding president of the New England Complex Systems Institute.-Biography:...
(2005). Making Things Work: Solving Complex Problems in a Complex World. Cambridge, MA: Knowledge Press - Beautement, P. & Broenner, C. 2010. Complexity Demystified: A Guide for Practitioners. Axminster: Triarchy Press
- Brown, S. L., & Eisenhardt, K. M. 1997. The Art of Continuous Change: Linking Complexity Theory and Time-paced Evolution in Relentlessly Shifting Organizations. Administrative Science Quarterly, 42: 1–34
- Burns, S., & Stalker, G. M. 1961. The Management of Innovation. London: Tavistock Publications
- Davis, J. P., Eisenhardt, K. M., & Bingham, C. B. 2009. Optimal Structure, Market Dynamism, and the Strategy of Simple Rules. Administrative Science Quarterly, 54: 413–452
- De Toni, A.F., Comello, L., 2010. Journey into Complexity. Udine: Lulu Publisher
- Gell-Mann, M. 1994. The Quark and the Jaguar: Adventures in the Simple and the Complex. New York: WH Freeman
- Kauffman, S. 1993. The Origins of Order. New York, NY: Oxford University Press.
- Levinthal, D. 1997. Adaptation on Rugged Landscapes. Management Science, 43: 934–950
- March, J. G. 1991. Exploration and Exploitation in Organizational Learning. Organization Science, 2(1): 71–87
- McKelvey, B. 1999. Avoiding Complexity Catastrophe in Coevolutionary Pockets: Strategies for Rugged Landscapes. Organization Science, 10(3): 249–321
- McMillan, E. 2004 Complexity, Organizations and Change. Routledge.ISBN 041531447X Hardback. ISBN 041539502X Paperback
- Moffat, James. 2003. Complexity Theory and Network Centric Warfare.
- Perrow, C. Complex Organizations: A Critical Essay Scott, Forseman & Co., Glenville, Illinois
- Rivkin, J., W. 2000. Imitation of Complex Strategies. Management Science, 46(6): 824–844
- Rivkin, J. and Siggelkow, N. 2003. Balancing Search and Stability: Interdependencies Among Elements of Organizational Design. Management Science, 49, pp. 290–311
- Rudolph, J., & Repenning, N. 2002. Disaster Dynamics: Understanding the Role of Quantity in Organizational Collapse. Administrative Science Quarterly, 47: 1–30
- Schilling, M. A. 2000. Toward a General Modular Systems Theory and its Applicability to Interfirm Product Modularity. Academy of Management Review, 25(2): 312–334
- Siggelkow, S. 2002. Evolution toward Fit. Administrative Science Quarterly, 47, pp. 125–159
- Simon, H. 1996 (1969; 1981) The Sciences of the Artificial (3rd Edition) MIT Press
- Smith, Edward. 2006. Complexity, Networking, and Effects Based Approaches to Operations] by Edward
- Snowden, D.J. Boone, M. 2007. "A Leader's Framework for Decision Making". Harvard Business Review, November 2007, pp. 69–76.
- Weick, K. E. 1976. Educational Organizations as loosely coupled systems. Administrative Science Quarterly, 21(1): 1–19
See also
- Complex adaptive systemComplex adaptive systemComplex adaptive systems are special cases of complex systems. They are complex in that they are dynamic networks of interactions and relationships not aggregations of static entities...
- Complex systemComplex systemA complex system is a system composed of interconnected parts that as a whole exhibit one or more properties not obvious from the properties of the individual parts....
- ComplexityComplexityIn general usage, complexity tends to be used to characterize something with many parts in intricate arrangement. The study of these complex linkages is the main goal of complex systems theory. In science there are at this time a number of approaches to characterizing complexity, many of which are...
- Complexity theory (disambiguation)
- CynefinCynefinThe Cynefin framework is a model used to describe problems, situations and systems. The model provides a typology of contexts that guides what sort of explanations and/or solutions may apply. Cynefin is a Welsh word, which is commonly translated into English as 'habitat' or 'place', although...
Centre for Organisational Complexity - The Santa Fe InstituteSanta Fe InstituteThe Santa Fe Institute is an independent, nonprofit theoretical research institute located in Santa Fe and dedicated to the multidisciplinary study of the fundamental principles of complex adaptive systems, including physical, computational, biological, and social systems.The Institute houses a...
- The New England Complex Systems InstituteNew England Complex Systems InstituteThe New England Complex Systems Institute is an American research institution dedicated to advancing the study of complex systems. It was founded in 1996 and is located in Cambridge, MA.- Overview :...