This is an article submitted by Cotton Chou, a new member that received his F.CIM designation in 2005. Cotton had his full thesis published in the United Kingdom after receiving his designation. Thank you for sharing this summary of your thesis with us Cotton.
What is Complexity Management?
A new development in management theory and practice
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Introduction
As organizations enter the 21st Century they carry with them a long history of management theory that has grown out of the thinking of Newton (mechanistic model), Taylor (scientific management) and Fayol (organizational hierarchy), all supposedly geared to ensure that organizational operations are managed effectively and efficiently for ever-increasing growth and profit. From this perspective, organizational leaders and managers have mainly focused on utilizing tools for performance measurement such as employee productivity and organizational profitability and sustainability. While this rational approach has been effective, it falls short of a balanced approach in that it fails to recognize or take into account human capital and their emotional aspects.
In the paradoxical nature of complexity management, concepts of traditional management are now being challenged and new awareness is emerging about the implications of the complex relationships that exist among people at work. Such awareness has shifted the focus to the quality of relationships in particular, and the examination of the context in which human beings interact and participate while at work.
Complexity management is a new development in management theory and practice that is piquing the interest of the business community. Concepts such as self-organization, reflectivity, self-reference and power relations form the basis for understanding the organization as “emergent” versus “planned”. These concepts have implications for traditional management paradigms of strategic management and strategic planning in that managers will need to come to an understanding about interactive relationships among people in the organization and their impact on how organizations evolve into a new order (Sullivan, 1999).
The Historical Development in Management Concepts
Traditional organizational management is deeply rooted in two conceptual approaches: Taylor’s reductionism and rationalist causality. Each of these established ways of thinking about operating promises to provide managers with the capacity to analyze, predict, and control organizational inputs and outputs. They have been trained to believe that if they only follow formalized steps and procedures they will surely be able to identify the best method for performing the given task.
In the modern business environment where companies are pressed to respond to fast-paced market demands, Taylor’s notions of planning and managing are no longer relevant. The impetus for change has impacted the business community most significantly during the late 20th century with the newer management ideas found within continuous quality improvement (Deming, 1986), total quality management (Juran, 1989), and organizational learning (Senge, 1990). As a result, managers have relinquished the elements of reductionism in favour of cross-functional and inter-hierarchical teamwork, self-managed work groups and human resource programs that value the important contribution from employees.
Despite the shift from a rigid hierarchical organizational structure to a soft interconnected organization, managers continue to work from an assumption that causality is efficient: that is, cause and effect can be explained from an “if-then”, linear perspective. The underlying belief is that organizational restructuring will empower employees, and “if” they are empowered, “then” they will be more committed to efficient and effective participation in achieving the organization’s strategic objectives. The bonus for the organization is enhanced employee involvement in decision-making, which results in a higher level of satisfaction in employees and substantial cost savings for the organization.
Unfortunately, unintended consequences arise in soft systems. When an organization’s structure changes from a hierarchy to a team-based model, increased sub-unit autonomy may create internal instability. Managers, unaccustomed to employee decision-making, may feel that the work environment is uncontrollable and as a result may attempt to impose more control. In this case, the belief that restructuring would prove beneficial in a linear sense would fail to take into account the complex nature of the work environment.
Therefore, understanding that the current way of doing business is complex and the future is unforeseeable, the organization needs to create flexible structures and become comfortable with ambiguity. As Marshall (1997) suggests the sustainability for all organizations lies in their capacity to evolve into learning communities. The natural route for such evolution is in self-organization.
The Sense of Complexity
So, what is Complexity Management? The concept is derived from complexity sciences as applied to organizations. It offers insights to the business community which helps them look at an organization as a whole. The complexity concept purports that organizations are essentially formed, and defined by human relationships and interactions. The dynamic patterns created as these humans relate mean that the organization operates in a state of far-from-equilibrium and within a paradoxical condition between stability and instability known as bounded instability (Stacey, 2003). The state of bounded instability (See Appendix A) is far-from-equilibrium in that behaviour has a pattern and is non-linear. That pattern emerges only through self-organization and is indeterminate in that small changes can produce drastic results - effectively breaking linear and determinant causal linkages (Stacey, 2003). Current and future relational patterns are perpetually under construction through continual interplay and interdependence of human and other resources, including political factors and contextual realities.
Managing in Complexity: Self-organization and Emergence
Most managers see organizational strategy as a means for “planning” as well as “controlling” and as a pre-commitment to a particular course of action. Following this line of thinking, managers believe that creating rigid vision, mission, goals, and accompanying procedures can help them operate the organization in a predictable and controllable manner.
In complex environments, the horizons are usually ambiguous so that rigid adherence to control mechanisms and established structures and strategies that serve to retain an organization in a state of stability, may be counterproductive. Bounded instability suggests continuous movement as opposed to static equilibrium and it is this process of simultaneous movement within stability-instability that generates the potential for organizational transformation, innovation and novelty (Stacey, 2003). A state of bounded instability is therefore indicative of the self-organizing nature of human interactions and communications.
In complex human environments, self-organization infers that all members are active participants who choose, intend and decide, in the context of interaction and relationship to participate willingly. Each individual in the organization gestures and responds to others based on his/her own behavioural style. There is no pre-existing blueprint to direct the formation of informal groups or the establishment of specific agendas for group or individual behaviours. Such interactive relationships among people as a complex web of responding are clearly non-linear. It is only through the process of continual responding that new thematic patterns of relationships will emerge.
Self-organization is neither about first empowering and then abandoning the lower position, nor disempowering and displacing the higher position. In self-organization, people’s interactions are in the form of free-flowing conversation and their interactions are enabled rather than constrained. This notion differs significantly from the traditional view of top-down control over the workforce. As organizations are defined as “processes of relating”, managers become an integral part of the interactive process. As such, organizational managers are active participants in conversation and in keeping those relationship paths open. To interact and to participate is also to reify: that is, to remember and promote continuity and to forget discontinuity. Therefore, the processes of self-organization allow us to “co-evolve”, opening ourselves to adjacent possibilities and new ways of thinking (Scherman & Schultz, 1998). In order to produce new emergent patterns, transformation must take place, and the key to transformation is in continuous self-organization through diversity, interaction, and building relationships. Thus, organizational structures and systems must value emergent strategies and structures by being flexible and prepared to change direction when unplanned opportunities arise (Sullivan, 1999).
Organizational Inertia and Change Viewed from Complexity Perspective
In any organization, resistance to change is an inevitable phenomenon. The perception is that employees and managers resist change if they are not part of the decision making process, or if they cannot see how change will match their own self-interest. Resistance may also arise in organizational leaders who are reluctant to fully develop their people or who perceive the change as a challenge to their personal authority, lessening of their power base. Despite resistance to change or the underlying causes for resistance organizational change happens anyway. It should be noted there is no way to predict how people or elements will self-organize and what the outcomes will be.
For example, any change in the norms and culture, core competencies, values, or the way in which organizations do business can be disruptive to existing power relationships and communication patterns. In part, resistance comes from the status quo demonstrated in a belief that what worked in the past will work in the present and future. Such frames of reference can persist in managers and workers. The elements of a successful organization built on traditional management theory may actually be hindrances to transformative and renewal processes (Zimmerman & Hurst, 1993).
Some of these elements may include the distribution of labour, strict adherence to job descriptions, rigidly defined roles and responsibilities, strategic planning processes that fracture and fragment choice and function, and excessive measurement. Such activities are for the purpose of self-regulation but also tend to hold the organization in a pattern of continuous self-replication. In contrast, complexity management is more interested in the concepts of self-similarity and self-reference because these offer the greatest possibility for renewal and transformation.
Self-similarity retains continuity during disturbances, while self-reference offers the potential for substantive change. In self-reference, resulting disturbances in organizational knowledge and experience may result in a phase transition in which the organization exists within two simultaneous states–continuity and change. The potential for transformation exists while established identity remains continuous with the past while responding to the present. Therefore, because there is no way to know how people will organize around new information, there is no way to completely predict the effects of organizational disturbances.
The notions of self-similarity and self-reference are used to demonstrate how the process of continual self-organization causes people to change while simultaneously causing the organization to change as well. Agents and entrepreneurs are forming and reforming their purpose in the present and, in so doing, the past is being reconstructed while the future is being constructed in the context of the present. Therefore, the future is always under perpetual construction in the living present and neither predictable nor controllable.
Conclusion
In conclusion, there is no singular solution or means by which to meet defined objectives. The complexity of our institutions and organizations is often driven by multiple, often competing, objectives. Complexity theory has some useful insights to offer by utilizing the knowledge and awareness of internal organizational human relationships a company can increase their competitive advantage and distinguish themselves in terms of general management, marketing strategy, and moreover, the enhancement of operational effectiveness and customer service.
Title: Bounded Instability
APPENDIX A
References
Deming, W. E (1986) Out of the crisis. Cambridge, MA: MIT CAES.
Juran, J. (1989) Juran on leadership for quality. New York: The Free Press. Marshall, S.P. (1997) Creating sustainable learning communities for the twenty-first century.
In F. Hesselbein, M. Goldsmith, & R. Beckhard, (eds.) The organization of the future. San Francisco, CA: Jossey-Bass Publishers, pp. 177 – 188.
Sherman, H. & Schultz, R. (1998) Open boundaries. Cambridge, MA: Perseus Books.
In Griffin, D. (2001) The emergence of leadership: Linking self-organization and Ethics. London: Routledge.
Senge, P. (1990) The fifth discipline. New York: Doubleday/Currency.
Stacey, R. D. (2003) Strategic management and organizational dynamics: The challenge of complexity. 4th edition, Essex, UK: Pearson Education Limited.
Sullivan, T.J. (1999) Leading people in a chaotic world. Journal of Educational Administration, 37 (5), pp. 408 – 420.
Zimmerman, B. & Hurst, D. (1993) Breaking the boundary, the fractal organization. Journal of Management Inquiry, 2 (4), pp. 334 - 355.
What is Complexity Management? Copyright © 2005 by Meng-Hsiang Cotton Chou. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission from the author.  | 
