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Extensive summary of the first lecture and all workshops of the master course Complexity within Organizations. Passed the exam with a 7.
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Lecture 1 Introduction lectureBasics of complexity
• Definition: The amount of differentiation that exists within different elements constituting the
organization; variety (Dooley, 2002); → how much variety.
Differentiation: difference specializations that exist within an organizations. Emerged organization:
doctors, cave experts, experts in diving. Very differentiated in order to deal with the variety in the
environment.
• Definition: “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” (Luhmann,
1995);
Differentiation can also be in products, processes; various elements. Differentiation come in close
connection with the environment! Org. has to match was happens in the environment!!
• Why some organizations are more complex than others?
• Sources of complexity: variety, dynamism, causal mechanisms (both internal and external)
Organizational complexity is considered a response to complexity within the internal or external
environment.
- Internal environment: processes and technologies that constitute the core operation of the
organization.
- External environment: customers, markets, suppliers, competitors, and institutions that shape what
the organization must respond to.
Three sources/dimensions of complexity of internal and external environment:
Variety: elements in the org that are different = how much differentiation.
Dynamism: connected with the time, changes both within and outside the org = change within the
organization + environment.
Causal mechanisms: trying to understand to what extent the org. can predict how it can achieve it
outcomes, for example if I will do this action I will get this outcome.
,Can happen within the org (intern) or outside the org. (extern).
Example
Sources of complexity: external
Movie theather
Low level of complexity.
• Differentiation: costumers may be diverse, but still do not require different treatment
(exception: children); Differentiation (External part): people of different ages but essentially
they do not require different treatment. Do not need to communicated to in different ways.
• There is restricted variety in types of movies that are shown (made by a few major studios)
and types of beverages;
• It is not that this year we have that type of movie and next year something completely
different. No big changes from one year to another. Types of beverages easy to predict what
will happen.
• External environment: the desire for the people to see movies more or less unchanged;
• Dynamism is low: what worked last year, will work this year as well; Customer preference
(external environment) people do not change much from one year to another, what works one
year will work the other year.
• Causal mechanism of the market is simple: if people show up, other people are likely to show
up. Causal mechanism: if I want to be successful, it is always working → good to predict,
pretty straightforward.
Emergent organization
Other org. completely different story
• Market differentiation: parents, football organization, external press; also difficult to predict
how they will react; emotions;
Market differentiation: quite intens, people who were interested in who had the major contact with the
parents, difficult to relate to them (different interests within the storty), external press (difficult to see
how they will react), local government (thinking oké so what is the best approach, who has the
expertise in the field). A lot of different elements within the org. and also differentiation outside
(parents, press). Extremely different to see what their interest needs.
• Dynamism: rainy season; difficult to predict how the water coming in will affect the lives of
the children; also, difficult for the divers to find the children and save them;
Dynamism: high, happened in the rainy season. Came one month before (very unpredictable), difficult
to think about the situation, tried various ways and options to save the children but not all of their were
good (could not estimate the environment very well).
• Causal mechanism is not straightforward: how to save the children;
Causal mechanism: not straightforward how to save the children in this particular situation.
Sources of complexity: internal
At the same time also internally:
Compare again the two organizations.
Movie theater
, • Some differentiation of roles, but still rather integrated; Some differentiated roles, but not a
huge differences: entrance, preparing the movie, cleaning, they are not so extremely different
from each other pretty easily to coordinate.
• Technology (of showing the movie) is automated; business process of selling tickets and food
are straightforward; Everything is automated nowadays, selling tickets is straight forward.
• People (intrinsic characteristics and their roles). Of course people are different, have different
interest, does not mean that this creates huge differentiation within the organization
Emergent organization
• Differentiation in roles: divers, military, medical staff; Org. that emerged we can see that there
is a lot of differentiation within roles. We have people expert in diving, geography, medical
team. Specialization necessarily for the org. to function.
• Technology is not straightforward: there are no routines on how to save the children; the
organization needs to be creative and improvise; Technology is not straight forward, no
routines in place. Everything was new.
• People diverse (functions, but also nationalities, cultures). Divers from different countries,
speaking different languages.
Rule of organizing → having a common purpose/goal. Organizations can also be temporary (like the
cave example).
How this organization emerged?
It was operating as an open system.
Key-Concepts: open systems
Used in social sciences and other sciences in other to understand complexity.
(Open) system = collection of interdependent elements that interchange with the environment → they
become more viable → take things from the environment and then they can survive.
• Systems (Miller,1978)
• cell
• organ
• organism
• group
• organization
• society
• supranationalsystem
- Open = interact with environment, closed = not interacting
- Reactive vs not reactive
- Dynamic vs non dynamic
- Natural systems (closed system and closely coupled relationships; focus on factors within the
organization; The natural system perspective advances the idea that informal and interpersonal
structures within an organization are more important than formal structures. People within
an organization have multiple interests, and consensus-building or conflictual processes
drive organizational action.) vs. Social systems. Organizations are social systems in that
each organization is made up of people, and has a defined purpose that is subscribed by the
individuals that comprise the organization. Each organization depends on norms and rules as
enforcement mechanisms to restrain the individual behavior of the people.
- Linear systems (clear outcome) vs. Non-linear systems
, Open Systems engage in interchanges with the environment AND this interchange is an essential
factor underlying the system's viability
• Organizations as systems of interdependent activities linking shifting coalitions of
participants embedded in a wider material-resource and institutional environment (Scott,
2003)
We have interdependent activities or actors that are embedded in a particular environment.
Interdependence is key. Can come in different degrees: a lot of connections within subunits and
less in others. Or very fluently across the whole organization. It is a broad concept (teams, units
depend on each other) in order to complete their tasks but it can come in many different degrees.
Doctors, divers all came together do not know each other and try to save the kids.
- Doctors, divers, cave experts, working together to save the children
• Environment ... the issues, trends and events outside the boundaries of the organization which
influence internal decisions and behaviors
What happens outside the org. influence the internal decisions and behaviors of the org. Cave
example: realize after a few days maybe we can extract the kids from over their but they realized that
it was not possible because of the water so that changed their decisions. They had to adapt to what was
happening in the environment.
- The way in which the water accumulated/rain influenced the decisions made to save the children;
• Boundaries (physical, cognitive, social) are difficult to define: open or closed is matter of
perspective
- Not based on individuals, but on their actions and behaviors.
Boundaries. Other org. bijv. Bol.com they themselves do not produce anything, they have connections
with distributions and other companies. Very difficult to see what are their boundaries. So what is
bol.com, also the companies that are selling to bol.com? Person is taking the delivery, how is that
connected ,is it inside the org or outside. Package on time, who am I going to blame? Some take the
charge some say it is not our charge. Interesting to see how that works.
- Difficult to define what is part of the organization and what it is not;
• Open systems are systems capable of selfmaintenance based on a throughput of resources
from their environment (2nd law of thermodynamics – entropy/negentropy)
- It started as no structure, order, but evolved towards negentropy → structure, rules, routines.
What is really important to notice is that open systems are capable of self-regulation while considering
the resources that are coming from the environment.
Entropy: If you don’t do anything, the system will evolve by itself. When we systems if you let them
lose, will evolve naturally to some source of disorganization.
Rule that states if you let the system to evolve freely it will evolve to some state of disorganization. If
you not intervene.
Negentropy: if the system operates as an open system, it is able to take the essential resources → then
learning specific rules etc. (from no structure evolving to a clear structure). It is something positive.
The org is able to take something from the environment (input and resources) in order to create
routines, in order to function.
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