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Summary - Complexity within Organizations (440803-M-6)
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Summary CWOLecture 1: Basics
Different definitions of complexity:
- The amount of differentiation that exists within the different elements constituting
the organization, variety (different specialties in an organization e.g. hospital)
- We will call an interconnected collection of elements complex when it is no longer
possible at any moment to connect every element with every other element
Sources of complexity:
- Variety
- Dynamism (how often differentiation is happening)
- Causal mechanisms (internal and external) (how to explain how the business is done)
Sources of complexity: external:
Cinema Soccer team in cave
Differentiation: costumers may diverse, but Market differentiation: parents, football
no different treatments, restricted variety organization, external press, how will they
in types of movies shown react, emotions
External environment: the desire for people Dynamism: rainy season, water is difficult to
to see movies more or less unchanged predict, difficult for divers to find them
Dynamism is low: what worked last year Causal mechanism is not straight forward:
will work this year how to save the children?
Causal mechanism of the market is simple:
if people show op others are likely to show
up
Sources of complexity: internal:
Cinema Soccer team in cave
Some differentiation of roles, rather Differentiation in roles; divers, military,
integrated medical, staff
Technology is automated; business process Technology is not straightforward: no
of selling is straightforward routines, be creative and improvise
People (intrinsic characteristics and roles) People diverse (function and nationalities)
How this organization emerged?
- What is an organization: common goal and a group who work together, are
interdependent,
- The class is a sub-system of the organization
- Case: this organization emerged out of the emergency
Open systems = engage in interchanges with the environment and this interchange is an
essential factor underlying the system’s viability
Systems
Cell
Organ
1
, Organism
Group
Organization
Society
Supranational system
Natural systems vs social systems
Linear systems vs non-linear systems
Being in the environment is good its keeps them alive, get input form the
environment
Organizations as open systems
Organizations as systems of interdependent activities linking shifting coalitions of
participants embedded in a wider material-resource and institutional environment
Characteristics: interdependent activities, members, embedded in the environment
Environment, the issues, trends and events outside the boundaries of the
organization which influence internal decisions and behaviors
Boundaries (physical, cognitive, social) are difficult to define, open or closed is matter
of perspective
Open systems are systems capable of self-maintenance based on a throughput of
resources from their environment
Entropy: All systems evolve naturally to some
Negentropy: positive about open systems
Examples of the case:
o Doctors, divers, cave experts, working together to save the children
o The way in which the water accumulated/rain influenced the decisions made
to save the children;
o Difficult to define what is part of the organization and what it is not;
o It started as no structure, order, but evolved towards negentropy -> structure,
rules, routines.
Law of limited variety = a system’s internal complexity (variety) should match the
complexity (variety) of the environment to survive (open systems perspective)
E.g. not invite 10.000 experts when solving could be done by 5
Law of requisite variety = a system’s internal complexity (variety) should exceed the
complexity (variety) of the environment to adapt – only variety absorbs variety (complex
adaptive systems perspective)
E.g. impossible with only the Thai diving experts
Contingency theory = the best way to organize depends on the nature of the environment to
which the organization relates
Lawrence & Lorsch approach: fit
o External perspective: fit external demands and internal structural design
o Internal perspective: fit among key design components
Two assumptions on information processing approach
o No best way to organize
o Different ways of organizing are not equally effective
2
, Weick’s approach: sense making
o Creating certainty and sense making is essential -> organizational responses ->
routines in the organization
Contingency/adaptive systems perspective
Steady states Transition states
systems are always both changing and Moving from one steady state to another
maintaining themselves at any given time –
a dynamic equilibrium called steady state
The system is maintaining an equilibrium Open systems react to environmental
(fit) among its internal subsystems and a influences (pressure) that require
viable relationship with its environment adaptation
thus ensuring its continual existence
The steady state is characterized by a In a complex and dynamic environment
sufficient degree of organization, transition states are seen as normal
complexity, and openness to the condition
environment
E.g. a human is the same but you are also E.g. human body get sick and you need to
getting older so you change as well, org make it better, this is a time dimension
open to the environment
Other responses to complexity
People deal with complexity Organizations deal with complexity
Decomposing complexity into subparts Barriers around the technical core; having
marketing/sales representatives;
Selecting and ignoring Smoothing input and output transactions
(e.g. one program that is offered at uni)
Drawing on previous experience, ignore Attempts to predict uncertainty of the
searching for new solutions environment;
Satisfying and not optimizing Rules to coordinate less complex aspects
Making assumptions (! That may not be Learning...
true)
Simplifying complexity using stories and
narratives;
The divers themselves will not speak with the parents; but representatives
Finding one solution and perfect it
Try to predict how the weather will affect the system of caves
WG 1: Socio-technical systems & Complex Adaptive Systems
Technology = the combination of machines, methods, people through which materials are
transformed into outputs (Core of the organization, input transforming into output, tech
complexity is important to understand, it’s how people do their businesses)
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