Organizations and Complex Adaptive Systems

Mahsa Fidanboy

• Editorial: Routledge
• Año: 2022
• ISBN:
  9781000627145
• Edición: 1
• Categoría: Business
• Categoría: Organisational Behaviour

Organizations and Complex Adaptive Systems explains complexity theory within the organizational studies and discusses the applicability of complex adaptive systems principles for intraorganizational and interorganizational levels. Complex adaptive systems and complexity theory have been studied in many different fields of science. When studying the application of complex adaptive systems within social sciences, not many are seen in real terms in contrary to the myriads of theories and propositions available. The complex adaptive systems perspective is presented in quantitative terms in natural sciences, but a quantitative approach has not been used within social sciences a lot comparatively. This book links the basics of complex adaptive systems to social sciences, focusing on organizational studies and covering interorganizational, organizational, and individual levels. It shows the latest state of knowledge on the topic and will be of interest to researchers, academics, managers, and students in the fields of management, organizational theory and behavior, and strategic management.

1System

DOI: 10.4324/9781003182764-1

System, a word which we use and hear in our everyday life, is used in many different situations and contexts, not in variant meanings, but all in almost similar or close senses despite the level of complexity of the situation. What we generally mean by the system is the whole consisting of the parts of which each has a function that might be similar or different from the functions of the other parts, and all parts follow the goals(s) determined for the system. The easiest example is our body consisting of many parts called organs with the common goal of making the system live in spite of the malfunctions they show from time to time that may not satisfy the common goal. In this example, the proximity of the parts to each other is seen even though this is not same for all the systems, for instance, the health system of a country. It subsumes all health organizations and health workers even at the farthest part located from the capital. Thus, the geographical distance is not a barrier on the way to consider a part away from the other parts as part of a system. An example in the context of business organizations can be a main company with several branches located worldwide which altogether form a bigger system. Besides the proximity of the parts, the function(s) of each part should also be paid attention to. As in the healthcare system, a cleaning staff in a hospital has different tasks from a surgeon though their common goal is to deliver the health services to the people, and when viewing from the system point, the parts, regardless of their functions, are all committed to reach the goals of the system. Furthermore, looking back at the example again makes us think of the different levels present within a system, the health workers as the individual, the hospitals and health institutes as the organizations, and the national health system as part of the worldwide health system. Given all mentioned, the key points to be focused on when talking of a system can be listed as follows:

1. The proximity and location of the parts
2. The functions of the parts
3. The main goal(s) of the system
4. The levels nested in the system
5. The interactions both between the parts and among the different levels.

This can help in defining the system as a whole consisting of many parts in direct or indirect relationship with each other, and all serve the system to reach its common goal.

Classification as a method to distinguish and explore the dissimilar characteristics of different groups can be used here too. Systems can be divided into two separate groups: open and closed systems. These two systems are well-defined in the natural sciences such as chemistry by explaining the concepts of enthalpy and entropy. To describe them in a nutshell, enthalpy is the sum of the internal energy in a system while entropy refers to the level of disorder in the system. Viewing them from the standpoint of social sciences, enthalpy, the exchange of energy and work can be represented as the resources provided to an organization which can be in any of its forms such as human resources, financial resources, and so on. As for entropy, the disorder in the organization can be perceived similarly in its general usage, and changes of the disorder level result in different states in an organization including ‘order,’ ‘chaos,’ and between these, at the edge of ‘chaos,’ rests ‘complexity’ (Dodder & Dare, 2000). The level of disorder is the lowest in the order state, increases when moving from order to complexity, and from complexity to chaos, reaching its highest point at the chaos state.

The perspective used in this book is a complex adaptive systems (CAS) perspective which consider the systems as both complex and adaptive at the same time, each of which will be elucidated in the following chapters. In a nutshell, complex systems are systems made of many connected and interacting parts. With respect to the adaptive systems, four components were suggested for them – sensor, adjustment mechanism and controller, actuator, and feedback and adaptation loops, which are all needed for the system to be adaptive (George & Lin, 2017). A model was presented in the same article consisting of these components in accordance with the control systems approach. From a CAS standpoint, adaptive systems are the systems able to adapt themselves to the changes in their environments, and according to the literature, they possess learning capabilities (Stacey, 1996).

Organizational Level

When putting the organizations under lenses at different levels of study, the properties of the system are needed to be defined each time accordingly. The organizational level study of the organizations as complex adaptive systems will have some similarities with organizational studies of the same level, although the differences root from the perspective from which the system is viewed from. The organization from a CAS viewpoint has an organic structure that supplies the organization with the flexibility required in order to be adaptive at the time of changes. The other perspectives may deem the organizations with mechanistic structure, unable to change or adapt. These perspectives are mainly among the ones ignoring the adaptation, but regarding the selection as the key impact of environment on the organization.

In addition, the organization is a whole consisting of physical and nonphysical assets, and all can be taken as parts of a system when being taken into consideration from other perspectives, yet the individuals are the main focus of the CAS perspective in the context of the social sciences.

Individuals

Among the numerous parts of an organization, the individuals are the key role players from a CAS standpoint. These individuals, in order to be considered in the system, should bear some characteristics which are explained in the following.

First of all, they should be in interactions with each other to a high level (Anderson, 1999; Tan, Wen, & Awad, 2005). By interactions, communication can be perceived simply; however, when looking at it more carefully, the action and the reaction can be more meaningful concerning its perception; an individual acts and another individual reacts to it, and vice versa. The action of the individual which then triggers the reaction might have either direct or indirect impact on the reactive responses. These can be clarified with some examples. In a software development company, a customer requested for the conformity of an ongoing software project to a new quality standard. The project manager is needed to adjust the project’s cost, time, and scope to the new requirements, and his reactions have been directly influenced by the change request. After the approval of the changes by the project manager and the top management, the changes are communicated to the development team to act accordingly. The customer decision is taken as the trigger action, and the conformity of the team is the last reaction that was affected indirectly through the mediator role of the changes of the project attributes. The direct or indirect nature of the impact can be determined this way: If the action forces the changes on the other action without any mediators, the impact is taken as direct; however, in the situation where an action changes the context for performance of the other action, the impact is regarded indirect. Identifying the chain of interactions enables us to specify the triggers, changes, and notably the dynamics of a system. In relation to this, two not-apparent-blurred-bordered mindsets come up: taking the changes as a cycle or considering them as a chain. The chain cannot be necessarily a finite one, and when it is infinite, the determination of its future path, whether it is going back to its initial point which makes it a cycle, would not be easy to trace. This may result in the usage of the cycle and chain words interchangeably in some cases.

In addition to the interactions between the parts, the system interacts with its environment as well (Oughton, Usher, Tyler, & Hall, 2018). CAS is a kind of open systems; the systems which exchange energy and information with the environment surrounding them (Ali, 2015). The environment outside, beyond the borders of a system, can be decomposed into immediate and universal environment. The immediate environment is the part in close contact with the system, and it is posited in a bigger environment itself, the universal environment. Taking a hospital as the system, the national health organizations can be its immediate environment, and all the international health organizations make the universal environment. From another point of view, for a hospital in a small town, the town can be perceived as the immediate environment and the country can be assumed in the role of the universal environment. In line with the purpose of the study, several environments might be identified which they may be nested in each other or having parts in common with the other environments or unique to themselves; nevertheless, all are part of the universal environment. The changes can be imposed on the system from the environment or the other way around. Although the environment is bigger than the system in size, or we may say it is infinite, the changes that the system pushes toward the environment can be small but still effective enough to make changes to the environment. From a CAS perspective, even a small change should be taken into consideration as it may lead to remarkable changes in the future of the system.

The second characteristic of the individuals is the interdependencies between them and as a whole with the larger environment (Anderson, 1999; Tan, Wen, & Awad, 2005). The interdependencies between the components of the system restrict their freedom. Interestingly, reducing or increasing the levels of freedom of the components of a system plays an important role in the determination of its level of complexity as well as the scale whether small or large (Siegenfeld & Bar-Yam, 2020). If the freedom given to the agents is low, they may have less options regarding the behavior they will show in response to the changes. This will probably restrict their degrees of creativity and innovation. In contrast, when the agents have much freedom, more than the ideal level, they will behave in every possible way, regardless of the history of the system and the decisions of other agents. This will end with chaos which is not a favorable state for the organizations. Besides, understanding the tradeoff between complexity and scale can assist in making decisions on narrowing the scope of manufacturing or widening it.

Similar to the interdependencies between the components of the system, interdependency with the environment exists to different extents. Being too interdependent with the environment means more efforts needed to be made to conform to the changes, and if done successfully, it actually implies more adaptability. The less a system is interdependent with its environment, the less it is impacted from it which then enables the firm to act more freely. This situation can be either hazardous or beneficial to the firm, depending on the many visible and invisible factors. It is like just a situation at which a technology company introduces a new gadget to the market. The outcome of the radical innovation when the firm has its own way of thinking and making, irrespective of what is imposed on it from the environment, will vary, bringing about two possible cases; the new gadget may become either so popular or a huge disappointment. This is the exact point at which the famous questions arises; ‘adapt or not to adapt, if yes, so to what extent?’

The third characteristic of the individuals is acting in unpredictable ways by using their freedom (Van Eijnatten, 2004). This unpredictability exists in the long term, but not in the short term (Schueler, 1996). In the case of the individuals as parts of the system, predicting the behavior and the decision of them can be possible if the predictions are being made for a short time, close to now. However, foreseeing the outcomes, the further future might not be as easy as it seems to be. The sensitivity to initial conditions makes the situation harder for predictions due to the fact that even a small change in the behavior of an individual or a decision slightly different from the previous ones can lead to completely different conditions in the future.

The fourth characteristic of the individuals is their ability to research, learn, self-organize, and adapt to the changes in their environments at various levels (Carlisle & McMillan, 2006). It is noteworthy that the environment plays a key role in the adaptation of an organization. Even if the sources seem to root in the decision of a manager or the implementation of a new procedure, the main reason is the environment definitely. In the previous examples, some changes in the environment might have triggered the change of strategy in a firm or the need for the modification of the procedures. Apart from the impact of the environment, the agents’ capabilities should also be taken into account. The critical capability for adaptation is learning. What is seen in the real world cases is that not all employees are willing to learn, and not all of those who are willing to learn, learn at the same speed with the others. Even the amount of what they learn during a certain amount of time varies which is the reason why for some job positions, being a quick learner is included as the characteristics of the individuals the companies are looking for. Particularly, learning becomes so momentous when the nature of environment is highly dynamic and turbulent.

Agents

Agents were referred to as the bases of a CAS (Dooley, 1996). Agents attempt to be fitted with their environment through adaptation, which then leads to the evolution of the overall system over time. They were labeled as ‘semi-autonomous’ (Dooley, 1996). This can be interpreted as having the freedom to decide how to behave, though being located in the context of a system puts some restrictions on the range or the depth of their choices. It ca...