Complexity theory and strategy

Complexity theory and strategy

Complexity theory has been used extensively in the field of strategic management and organizational studies, sometimes called 'complexity strategy' or 'complex adaptive organization' on the internet or in popular press. Broadly speaking, complexity theory is used in these domains to understand how organizations or firms adapt to their environments. The theory treats organizations and firms as collections of strategies and structures. When the organization or firm shares the properties of other complex adaptive systems - which is often defined as consisting of a small number of relatively simple and partially connected structures – they are more likely to adapt to their environment and, thus, survive. Complexity-theoretic thinking has been present in strategy and organizational studies since their inception as academic disciplines.

Early research

For instance, early strategy and organizational theorists emphasized complexity-like thinking including:

  • Herbert Simon's interest in decomposable systems and computational complexity.
  • Karl Weick's loose coupling theory and interest in causal dependencies
  • Burns and Stalker's contrast between organic and mechanistic structures
  • Charles Perrow's interest in the link between complex organization and catastrophic accidents
  • James March's contrast between exploration and exploitation, which owes a debt to complexity theorist John Holland.

Later research

More recently work by organizational scholars and their colleagues have added greatly to our understanding of how concepts from the complexity sciences can be used to understand strategy and organizations. The work of Dan Levinthal, Jan Rivkin, Nicolaj Siggelkow, Kathleen Eisenhardt, Nelson Repenning, Phil Anderson and their research groups have been influential in their use of ideas from the complexity sciences in the fields of strategic management and organizational studies.

External links

The following include a variety of places where complexity science is done in the areas of strategy and organizational studies:

References

  • Brown, S. L., & Eisenhardt, K. M. 1997. The Art of Continuous Change: Linking Complexity Theory and Time-paced Evolution in Relentlessly Shifting Organizations. Administrative Science Quarterly, 42: 1-34
  • Burns, S., & Stalker, G. M. 1961. The Management of Innovation. London: Tavistock Publications
  • Davis, J. P., Eisenhardt, K. M., & Bingham, C. B. 2007. Complexity Theory, Market Dynamism, and the Strategy of Simple Rules, Stanford Technology Ventures Program working paper
  • Gell-Mann, M. 1994. The Quark and the Jaguar: Adventures in the Simple and the Complex. New York: WH Freeman
  • Kauffman, S. 1993. The Origins of Order. New York, NY: Oxford University Press.
  • Levinthal, D. 1997. Adaptation on Rugged Landscapes. Management Science, 43: 934-950
  • March, J. G. 1991. Exploration and Exploitation in Organizational Learning. Organization Science, 2(1): 71-87
  • McKelvey, B. 1999. Avoiding Complexity Catastrophe in Coevolutionary Pockets: Strategies for Rugged Landscapes. Organization Science, 10(3): 249-321
  • McMIllan, E. 2004 Complexity, Organizations and Change. Routledge. ISBN 041531447X Hardback. ISBN 041539502X Paperback
  • Perrow, C. Complex Organizations: A Critical Essay Scott, Forseman & Co., Glenville, Illinois
  • Rivkin, J., W. 2000. Imitation of Complex Strategies. Management Science, 46(6): 824-844
  • Rivkin, J. and Siggelkow, N. 2003. Balancing Search and Stability: Interdependencies Among Elements of Organizational Design. Management Science, 49, pp. 290-311
  • Rudolph, J., & Repenning, N. 2002. Disaster Dynamics: Understanding the Role of Quantity in Organizational Collapse. Administrative Science Quarterly, 47: 1-30
  • Schilling, M. A. 2000. Toward a General Modular Systems Theory and its Applicability to Interfirm Product Modularity. Academy of Management Review, 25(2): 312-334
  • Siggelkow, S. 2002. Evolution toward Fit. Administrative Science Quarterly, 47, pp. 125-159
  • Simon, H. 1996 (1969; 1981) The Sciences of the Artificial (3rd Edition) MIT Press
  • Weick, K. E. 1976. Educational Organizations as loosely coupled systems. Administrative Science Quarterly, 21(1): 1-19

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