The Effective Organization

Practical Application of Complexity Theory and Organizational Design to Maximize Performance in the Face of Emerging Events.

Dennis Tafoya

• Publisher: Routledge
• Year: 2010
• Print ISBN: 9780415880350
• eBook ISBN: 9781136959806
• Topic: Business
• Subtopic: Business General
• Index: Business

Project Overview: What the Book's About

"It may not be possible to predict when an organization will confront an operation-challenging event but it is possible to predict the organization's capacity to manage the event when it emerges." (Introduction to Chapter Nine)

Performance is the reason why organizations exist. Through performance organizations meet the needs of internal and external stakeholders as defined by their mission, goals and objectives. This is true for all organizations. If a retailer won't stock goods a customer wants, the customer will shop elsewhere. If a religious organization does not meet the needs of its followers, they leave. If a cult doesn't meet the needs of its memberships they seek their goal fulfillment elsewhere. If a manufacturing center can't produce goods that meet customer standards, the customer will reject it.

Complexity theory, a tool used to examine the nature of dynamic systems like organizations, can contribute to our understanding of organizations and ways to improve their performance. The models and material outlined in the book illustrate ways competency and organizational programs, processes and procedures are used to manage emerging risks, threats and vulnerabilities that challenge today's organizations. Collectively this information enables the identification of individual organization profiles as a way to advance our understanding of an important theory, complexity, in an applied setting -- organizations.

Unique typologies describing organizations (four types), events that effect organizations (six types) and the fundamental structure for organizations are presented to enable the forecasting of an organization's capacity to manage different events as they emerge and how behavior organizes around these events. Academicians studying organizations and practitioners interested in improving them can use this information to facilitate baseline, descriptive thinking and analysis or more sophisticated examinations aimed at understanding the dynamic nature of organizations as fully functioning systems.

At the heart of the effort is the examination of what it takes to get the performance needed to achieve a vision or mission and why, despite planning, training and evaluation, few organizations can guarantee or maintain desired levels of performance when faced with events, routine to extreme, that shape their existence. Particular emphasis is placed on understanding how knowledge, evaluation, information and, communication management practices need to be tailored to fit particular organizations rather than treated as a "one size fits all" approach. These are not limited, theoretical discussions but are presented as ways to efficiently talk about an individual organization's profile or competencies within a class of, or in contrast to, other organizations.

PART I
Complexity Theory and Organizational Design

A Structural Model of Organizations

CHAPTER 1
Complexity Theory as a Tool to Aid Understanding of Organizational Performance Management in Effective Organizations

Events are the focal point of every activity in an organization. Stores focus on the sales event, doctors the surgical event or patient meeting, educators on a lecture (teaching event), politicians on campaign events, even subversive groups on terrorist events. Events are the means through which organizations achieve their mission.

The route to appreciating the role of events in organizations begins with understanding the manner in which they are constructed—how organizational events emerge from thoughts, ideas and plans to influence the behavior of people and other organizations. Organizations are not simple, discrete entities and variation among different organizations is almost limitless but there are certain common themes one can attribute to all organizations.

Complexity theory is a useful tool to systematically organize and describe the emergence of events associated with organizations across a wide variety of settings. The focus here centers on examination of how and why behaviors used to manage events emerged and the ramifications of the management strategies used. Complexity theory is a means for the systematic study of organizations from a common perspective, from those elements common to all organizations: the people, processes, materials and culture that give rise to an individual’s or group’s collective behavior. Complexity theory is a means for understanding why an organization exists, its purpose or mission and how it uses structure and processes to increase the likelihood events are managed in ways that achieve the mission.

The relationship between an organization’s vision or mission and the behavior designed to achieve them is not a straight path. Despite best efforts to shape performance, ultimately what happens at “the event” rests on the actions of people: the individuals or groups expected to manage the event. In other words, when one encounters poor customer service that behavior is not simply an instance of “people trained to provide quality service who don’t” but, rather, of “people trained to provide quality service who choose not to provide quality service.” Something in the organization’s design and/or development opens the door for individuals to act on their own or, in the language of complexity theory, to self-organize a response to the event at hand.

Team members, for example, may be coached to be supportive of the team, but they form cliques and may even try to exclude other team members from participation. Managers are instructed to be fair and objective professionals, yet they may discriminate and/or display favorit-ism or bias when hiring or promoting employees. Employees are taught to think “safety first” if there is fire in the building, but people have been known to disregard their own safety and rush back into a burning building to see if everyone got out. Successful event management is only partially within the organization’s control: the organization’s membership is comprised of independent, free-thinking people who combine what the organization expects with their own bias, perspective, skills or needs.

THE PROCESS OF SELF-ORGANIZATION

There’s no consensus on a specific definition of self-organization or the related concepts of complexity and emergence.¹ We view self-organization as a useful tool because it offers a uniform way for examining how people, acting alone or with others and without direction, can construct a response to events that emerge around them. Take a familiar concept like customer service. Organizations teach people how to provide the levels of service they expect. Nevertheless, despite the training, there is often little consistency in the service provided.

The amount and type of service provided can vary from person to person. Some people take it upon themselves to “go the extra distance” to meet a customer’s need. They provide “value-added service.” It’s more than expected. Others, however, deviate from what is acceptable. Instead of providing “quality customer service,” the employee may provide the minimum or may be rude or simply ignore the customer. Again, the individual chooses to behave in this manner.

The challenge self-organization presents those in organizations is that sometimes it can be desirable, of potential benefit, and, at other times, a potential liability for the organization and its membership. Or, as economist Paul Krugman framed it, self-organization “is something we observe and try to understand, not necessarily something we want” (Krugman 1996: 6).

FEATURES AND BENEFITS ASSOCIATED WITH THE STUDY OF SELF-ORGANIZATION IN COMPLEX SOCIAL SYSTEMS

Complexity, according to Scott Camazine et al. (2001), is a relative term. Systems, like organizations, are complex, not because they involve many behavioral rules and large numbers of different components, but because of the nature of their “global response” to their environment (Camazine et al. 2001: 11). It’s the nature of the organization, the system, as it appears to others, given its macro properties. An organization’s complexity is not found in those elemental properties that define it for those walking the corridors of its buildings or watching its commercials on television, or listening to the speeches of its leaders. An organization’s complexity is reflected in the thoughts, values and ideals of its stakeholders; it’s the whole package, just as a sentence is more meaningful than the individual words that form it (Polanyi 1974: 184). When looking at the organization as a whole, systemically, complexity gives an observer a sense for what the organization is, what it looks like and, very importantly, what it stands for. This is particularly clear when the observer compares what the organization sees as important with what he/she believes is important. In other words, complexity is a way of gaining a perspective of what the organization is that one can’t get by merely looking at the organization at its lower levels (e.g., Polanyi 1974: 181–207).

Typically, organizations move from their lofty, sometimes idealistic and often vaguely defined vision or mission statements to action through the formal and informal use of processes, such as planning, communication or evaluation. Processes stimulate behavior or shape it after it emerges. For example, a local government may see protecting the public’s welfare as part of its mission. Since roadways fall under the local government’s control, government leaders may structure the mission of internal departments, like the highway patrol, as an extension of the overall government’s mission. To achieve this mission the highway patrol may have goals:

1. to make sure speed limits are maintained; and

2. that vehicles on the road meet state safety standards.

Moreover, to maintain speed limits the highway patrol might use monitoring activities to see that drivers “behave as expected.” These activities might include conducting a number of patrols, setting up and managing speed traps, isolating high accident areas or similar actions that can help the police department achieve its mission. Table 1.1 summarizes the elements of this type of planning process.

The process of achieving an organization’s vision and mission, however, is not straightforward. Those in organizations also have to deal with the emergence of unplanned behaviors and events. These may or may not help the organization achieve its vision or mission and, in some cases, may obstruct its efforts or, worse, potentially harm the organization.

As Table 1.2 illustrates, unplanned behavior or performance, even if well intentioned, can be hazardous for organizations for several rea-sons.² For example, unplanned or spontaneous behaviors may put the organization or its membership in jeopardy. The employee who first

Table 1.1 Guiding the Emergence of Planned Activities: The Foundation for Expected Performance and Behaviors

Table 1.2 Unplanned Behavior or Performance

attempts to put out a fire before setting off an alarm or leaving the building may be performing a noble act, but it could put the employee’s or others’ lives in jeopardy. The same is true for the person who intervenes or attempts to prevent a robbery. These are dangerous events.

Compare the list of behaviors in Table 1.2 with those in Table 1.3. Rude treatment of a customer, co-worker or supervisor is seldom prudent behavior. These behaviors can put people or the organization at risk of retaliation. Retaliation also is a possibility for whistle-blowing, challenging an aggressive driver, or ignoring medical or other professional advice someone has received. These behaviors can reflect feelings of self-righteousness, a sense of authority without merit or, simply, poor judgment. So, on one hand emergence is the process of transforming the organization’s mission into action; into behaviors or performance. However, emergence also applies to a second group of behaviors—those that are not planned, directed or controlled. For example, Table 1.3 has a list of common but unplanned and often desirable behaviors and events that might occur. Both lists illustrate an important point: behaviors have an effect on people. The effects may be direct or subtle, they may affect people emotionally or physically but they have an effect.

The potential value in understanding the role of self-organization in organizations increases when one is willing to look at the organization’s elements (e.g., people and events) systemically. For example, when is poor customer service, service that is contrary to what one has been taught to provide, not just a single incident but reflective of a pattern of behavior? Or, on a broader, community level: when is speeding, drug use, theft, aggressive behavior or anti-social acts, either by an individual or a group, an example of emergent wide-scale patterns of behavior? The difference between something being a one-time occurrence and something reflecting a pattern of behavior is significant. One-time occurrences or single acts may be random and spawned by any of a number of factors. Repeated

Table 1.3 Unplanned Desirable Behaviors

acts or actions illustrate that a number of factors also may spawn behavior patterns which, in turn, make it possible to identify thresholds associated with the underlying nature of the self-organization process.

Table 1.4 contains illustrations of times when self-organization can be beneficial and other times when it can be risky for the individual, group or an organization. The issue for those managing organizations is: how does one reduce or manage the risky incidences of self-organization and capitalize on, and perhaps even encourage, positive self-organizations? The process can be tricky since self-organization rests in the control of the individual and not the organization. The same behavior that “stimulates innovation” may also be “contrary to policy” or “lead to more problems and expenses” for the organization. Moreover, since self-organization in social systems cannot be prevented, it is very important that processes are in place to observe, analyze and maximize the likelihood that positive self-organizations emerge more often than negative ones.

FUNDAMENTAL CONDITIONS NEEDED FOR SELF-ORGANIZATION TO OCCUR

Complexity theory is a tool we’re using to examine emerging performance, particularly the type of performance defined and organized by

Table 1.4 Ten Reasons Why it’s Important to Understand the Role and Process of Self-Organization in Organizations

people without the direction or instruction of others; in other words, performance or behavior that is self-organized.

This focus on human social organizations differs from research that has examined complexity and self-organization in natural, physical or biological systems. These studies offer relatively neat, clean examples of complexity theory and self-organization at work. Adam’s book, Mathematics in Nature: Modeling Patterns in the Natural World (2003) is filled with examples of self-organization in nature. He covers cloud patterns, formation of sand patterns and dunes or the formation and dispersion of waves on the water. It’s an interesting introduction to the observance and measurement of complex physical phenomena in everyday life.

Also of interest are the studies of biological systems. The foraging behavior of ants or honey bees (Seeley 1985, 1989) or predator/prey studies (Segel and Jackson 1972) which illustrate complexity and self-organization in biological systems are very interesting. But, while there’s value in using studies of natural systems as a guide for studying human systems, they are only useful to a point: human organizations, like political systems, religions, businesses or military units, are fluid, dynamic systems and are not bound to physical or biological blueprinting like ant colonies or beehives. Bees and ants don’t have free will.

Table 1.5 illustrates some differences between the study of complexity and specifically self-organization in human and natural systems. The table illustrates that there are real benefits to understanding the differences between the human and natural systems since they have a number of common features and even where the two processes differ widely there’s potential value in the comparison. For example, spontaneous self-organizations are evident in both natural and human social systems. There are also ways to map the self-organizations and to note key thresholds in each. Consider the number, variety and complexity of thresholds in human decision-making associated with taking action. When a human reaches a threshold they make a decision—for example to continue or not or, simply, just to value the threshold or not. An animal’s behavior is not guided by the variety of thresholds reflected in human decision-making and that is an important distinction.

Examining processes in both human and natural systems can tell us something about the underlying nature of the system studied. When conditions are right for spontaneous self-organization to begin, that implies that the self-organization was “pushed” from the system. Again, this is a difference between human and natural systems. Natural systems appear to need the self-organizations that occur to materialize as a logical part of the system’s evolutionary cycle. Cell mitosis in biological

Table 1.5 The Differences in the Emergence and Manifestation of the Self-Organization Process in Natural and Human Social Systems

systems is an example. Cells in biological systems have to divide and become a finger, nose or heart. There is no choice making. Humans make choices; they choose to be aggressive or nice or to innovate or create. Both cell mitosis and human choice-making are instances of a system “pulling” the self-organization to the fore, but that’s as far as the similarities can be carried.

There’s an identifiable...

Table of contents

• CONTENTS
• FIGURES AND TABLES
• PREFACE
• ACKNOWLEDGMENTS
• PART I Complexity Theory and Organizational Design
• PART II Challenges to Individual and Organizational Performance and Effectiveness
• PART III Designing a Framework for Organizational Effectiveness
• PART IV Summary and Conclusions
• APPENDIX A Problems, Rationalizations and Performance Management
• NOTES
• REFERENCES
• INDEX