2021
Complexity within
organizations
440803-M-6
1 lecture
5 workshops
1 final exam (100% of your grade). The questions will be derived from the
reading materials and from the exercises discussed in the workshops. The
case study will be similar to the ones discussed during the workshops.
o 1 larger case: 4 essay questions workshop Margot
o 1 smaller case: 2 essay questions Worksop Ceren
o Closed book
o On campus
How to prepare for the exam?
o You can skip:
The history about a concept;
The methodological section of a paper;
Case specific content.
o Start with the lecture/workshop slides and notes from class, try to
see if you understand/know all content.
o Try to summarize the key messages from the papers. Make sure
that you are able to explain core concepts in your own words.
Which key features that are discussed are important to
analyse complex systems
What features are discussed that are important to reason
about interventions?
o The workshops can be seen as exam practice.
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,Introductory lecture 1: Introduction to complexity within
organizations and complex adaptive systems
Core question that we aim to answer in this course: How can we define and understand organizational
complexity using the open system and contingency theory approach?
The general aim of this course is to help students to:
• Identify, understand and assess the causes, dimensions and consequences of complexity within
organizations
• Use scientific theories and theoretical concepts in practical settings
• Demonstrate skills for critical thinking, professional written and oral communication (in English)
Organizational complexity
Modern organizations can best be understood as complex adaptive systems. This way of understanding
leads us to new insights into dealing with organizational complexity in theory, as well as in practice. The
open system framework and the contingency organizational theory as well as complex adaptive systems
theory will be used as main theoretical foundations for this course.
Organizational complexity “The amount of differentiation that exists within different elements
constituting the organization.” Starting from our theoretical background the course will emphasise the
facets of organizational complexity, and the following questions:
Why are some organizations more complex than others? (indicators)
What are the antecedents of complexity? (causes)
What are the consequences of complexity? (implications)
Key concepts:
Law of limited variety = a systems internal complexity (variety) should match the complexity
(variety) of the environment in order to survive.
Law of requisite variety = systems internal complexity (variety) should exceed the complexity
(variety) of the environment in order to adapt.
What are the consequences of complexity? This will be discussed in the workshops! The amount of
learning that goes on within an organisation is effected by the complexity of the environment. If the
environment is complex it means that the people from within he organisation are maybe overwhelmed.
Complexity may be impacted by individual things, etc. you can consider it in a three level way.
Open systems
Literature: Scott, W. R. (2003). Organizations as open systems. Chapter published in W. R. Scott
Organizations: Rational, Natural, and Open Systems, Prentice Hall, New Jersey, p. 82-101.
The open systems perspective emerged in biology, but this concept is also applicable to other disciplines.
All systems are characterized by a combination of parts whose relations make them interdependent, but
this interdependence has degrees. That a system is open means, not simply that it engages in
interchanges with the environment, but that this interchange is an essential factor underlying the systems
viability.
Open systems can be seen as interdependent activities linking shifting coalitions of participants
embedded in a wider material-resource and institutional environment. Open systems are capable of
self-maintenance on the basis of throughput of resources from the environment (interdependency is
crucial for their viability). These systems interact with their environments and constantly let in new
information and ideas so that they can continue to grow.
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,That is not to say that open systems do not have boundaries. They do, of course, and must expend energy
in boundary maintenance. Because of the openness of organizations, determining their boundaries is
always difficult and sometimes appears to be a quite arbitrary decision. Example: Does a university
include within its boundary: Its students? Its alumni? Faculty during the summer? The spouses of students
in student housing? Whereas closed systems have a very clear formal and informal structures, open
systems have open boundaries; you take something from the outside (environment) but you also give
something from the inside to the environment.
Whether a given system is open or closed depends on how much of the universe is included in the system
and how much in the environment. By adjoining to the system, the part of the environment with which an
exchange takes place, the system becomes closed.
The source of system maintenance, diversity and variety is the environment. From an open system point
of view, there is a close connection between the conditions and the environment and the characteristics
of the systems within it: a complex system cannot maintain its complexity in a simple environment. Open
systems are subject to what is called the law of limited variety: A system will exhibit no more variety than
the variety to which it has been exposed in its environment. Example: Great universities do not arise in
deserts or other sparsely inhabited areas.
An open systems perspective is much more complex, because you’re in constant interaction with your
environment.
Contingency theory
Literature: Van de Ven, H. Ganco, M., Hinings, C.R. (2013). Returning to the Frontier of Contingency
Theory of Organizational and Institutional Designs. The Academy of Management Annals, Vol7, No 1, pg.
393-440
As a branch of systems design, contingency theory emphasizes that design decisions depend (=are
contingent) on environmental conditions. Contingency theory is guided by the general hypothesis that
organizations whose internal features match the demands of their environments will achieve the best
adaptation. In essence, a contingency theory proposes that performance outcomes of an organizational
unit are a result of the fit between the unit’s external context and internal arrangements.
External fit = Fit between the demands of an organization’s environment and the design of its
internal structure.
Internal fit = Fit among key design components of strategy, structure, systems, and culture.
Galbraith (1973) states that: there is no one best way to organize any way of organizing is not equally
effective.
Different environments place differing requirements on organizations, according to Lawrence and Lorsch
(1967). Meaning that there is no one best way of organizing. There are environmental determinants for
different ways of organizing. Environments characterized by uncertainty and rapid rates of change in
market conditions or technologies present different challenges (both constraints and opportunities) to
organizations than placid and stable environments do. In other words: the amount of uncertainty and
rate of change in an environment impacts the development of internal features in organizations. The
more varied the types of environments confronted by an organization, the more differentiated its internal
structure needs to be.
Weick (1974) defines organizing as “the resolving of equivocality in an enacted environment by means of
interlocked behaviours embedded in conditionally related processes.” He sees organisations simply as a
noun that we use, but an organisation as a thing/being is a myth. If you look for an ‘organisation’, you will
not find anything. Instead of looking at ‘a company’ you look the events that are linked together, the
pathways that people are walking on, the culture of a company, unspoken rules, processes, etc. An
2
,organisation might be a system, but it is not a tangible thing that you can think about; it is all about the
structures within the organisation. The organisation is established through interpretation and interaction.
Since human beings actively create the world around them through perception, organization members do
not merely react to an objectively accepted physical environment but enact their environment through
information and the creation of meaning. Weick’s major concern is to spell out the implications of the
open systems perspective when applied at the social psychology level (to the behaviour of individual
participants and the relationships among them). The semi autonomy of the individual actors is stressed:
the looseness and conditionality of the relationships linking them is emphasized. Meaning that people are
loosely connected with organisations; you might expect people to act in a certain way because of their
role in a company, but in practice it does not have to be like that. You always have to think about the
people and what they bring into the organisation (attitudes, personality, traits, diverse cultures, etc.).
Attention and interpretive processes are highlighted. And whereas conventional wisdom asserts that goals
precede activities (intention precedes action), Weick insists that behavior often occurs first and is then
interpreted/given meaning.
So, according to Weick it is all about organizing, not about organizations. Meaning that you always have to
take into account the people within an organisation and their complexity to understand and overcome
everything.
Complex adaptive systems
Literature: Stacey, D. (2011). Complex adaptive systems. Chapter published in D. Stacey (Ed) Strategic
management and Organizational Dynamics. The challenge of complexity. Prentice Hall, Harlow GB.
Complex behavior emerges from interaction of individuals. Multi-level approach: at any level of analysis,
order is an emergent property of individual interactions at a lower level of aggregation.
Complex adaptive systems has similar agents that:
Utilize one or more levels of feedback
Exhibit emergent properties and self-organization
Produce non-linear dynamic behavior.
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,Workshop 1: Cultural complexity in organizations
During this workshop students will be introduced to culture as a complexity dimension of an
organization. Students will develop an understanding towards challenges that cultural
complexities create and how to overcome them. Students will also analyze a case study in groups
and find debatable topics on culture.
Lecture notes
Culture: Culture can be seen as a pair of social glasses that is a relatively large group of people share.
These glasses shape what those people see and perceive as ‘the right thing to do’. This group has a shared
way of life and a similar worldview (programming of the mind). You can also see culture coming back in
the symbolic communication, such as certain gestures or objects that carry meaning for people within
that culture.
Systems of knowledge shared by a relatively large group of people.
Way of life of a group of people.
Symbolic communication. The communication types that are not spoken are symbolic
communication. For example; waving a hand can be welcoming, but in other countries that can
be rude. Here we also talk about organisational culture.
o Why is organisational culture different? Organisational culture can be used as a term for
uniting people. People have their individual differences, but they might have a common
understanding an communication that they share in their organisational culture.
o Does this eliminate all the differences? No, because people still take their background
with them. But the organisational culture is a facilitator.
Sum of total of the learned behavior of a group of people.
Collective programming of the mind.
Symbols
People
Rituals
Values
Figure 1. Culture is a collective programming of the mind, consisting of values as the core, and then three
layers surrounding that core.
2
, Symbols People (heroes) Rituals Values
Objects, not necessarily physical, that hold The ‘heroes’ in a culture. Heroes are This is a cultural aspect that can be observed At the core of culture, you’ll find values.
meaning for the members of the people who have shown behaviour which by outsiders as well. It is a regular Values are broad preferences for a certain
organization. showcase, for example, the national organisational activity that carries more state of affairs, which might be hard for
spirit. Or, within organisations, heroes meaning than that it does actual purpose. people outside your culture to understand.
show behaviour that sets the example. Values are transmitted by the environment
in which we grow up, which teaches us
what is acceptable and what isn’t.
Words Models for behavior Collective activities Preferences of certain state of affairs to
others
Gesture Present or past Ways of greetings Can’t be directly observed by others
Picture Real or fictitious Showing respect Remain unconscious to those who hold
them
Any object that carries a meaning Religious or social ceremonies
Example: Eating habits, foods, flags or Example: Generally we assume that we Example: A handwave can be a greeting in Examples:
colours. In organisational setting, by think that it is the founder of that some cultures and a sign of disrespect in Preferring equality over hierarchy.
symbols you might think about the logo of country. others. Outcome orientation, which
a company for example. emphasizes achievements and
Example: You could perhaps argue that Example: If a company culture focuses on results.
Example: A book holds a functional Steve Jobs can be considered a ‘hero’ in a employee improvement, then they might People orientation, which insists
purpose, but to a librarian a book is culture because his life story resembles have a ritual of holding weekly lunch-and- on fairness, tolerance and respect
symbolic of knowledge. Librarians place a the American dream. learn meetings where colleagues can teach for the induvial.
great deal of importance on books each other about various areas of the Team orientation, which
because of their deeply ingrained values to business emphasizes rewarding and
protect and preserve knowledge. An effort collaboration.
to replace books with e-readers may Example: It is easy for leaders of an Innovation, which encourages
provoke a backlash because of the organization to state their values, but rites experimenting and risk-taking.
perceived attack on a deeply held value or and rituals openly publicize the values of an
preserving knowledge. organization. If a library places great value on
its people, then the library will hold
ceremonies like parties that bring together
and celebrate its people. Disconnects
between stated values and those values that
are celebrated can cause a fracture in the
culture of a library.
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