Organized Complexity in Business: Understanding, Concepts and Tools

Description

This book explores a most central phenomenon in our contemporary businesses and organization, the growing complexity in business. Economic growth and growth of complexity always have been inseparable, but the last decennia the growth of complexity appears to outrun our growth of knowledge and understanding. For success and continuity, the modern firm in the developing complexity of its markets and societal contexts must have the capacity to master and exploit a commensurate level of complexity in its internal organization. This book is the first of its kind to help the reader to understand the different types of complexity and the different concepts and tools to deal with each of them in business administration, strategy, and organization. This book offers the reader a fresh perspective on conventional concepts and tools in the field of business administration and bridges these to new concepts as are being used to exploit new complexities. In the process, the reader becomes familiar with the rich cybernetic concept of information, as a basis for the information-based organization and to master big data. With that complex decision-making is clarified and a fresh understanding of the core function of the organization, coordination, is offered for those who want to solve the issue of self-coordination. The book provides working examples but even more the strongest tool to master and to reduce complexity: a deeper and broader understanding of what is going on beneath the surface of what we experience daily. This book builds on Herbert Simon’s hypothesis of simplicity: ‘to use the simplicity of process to deal with the complexity of state.’  Preface Contents Part I: Understanding Complexity and the Economy 1: Introduction 1.1 The Newness of this Book 1.2 What this Book Is About 1.3 Objective of this Book Bibliography 2: Complexity 3.0 2.1 The Usefulness of Complexity 2.2 Different Types of Complexity 2.3 Why Complexity Theory? 2.3.1 Obsolete Assumptions 2.3.2 Institutionally Induced Complexity 2.3.3 Complexity of Objectives 2.3.4 Control Without Being Controlled 2.3.5 Complexity as Provenance 2.4 Complexity Theory and the Changing Nature of the Firm 2.5 New Options to Organize 2.6 A First Understanding of Organizational Complexity 2.7 From Modern Complexity to Post-modern Complexity Bibliography 3: Simplicity and Complexity 3.1 Our Need for Simplicity 3.2 Two Types of Simplicity 3.3 Simplicity and Perspective 3.4 Simplicity Versus Limited Complexity 3.5 Dominant Logic 3.6 Complexity and Language 3.7 The Paradox of Traditional System Thinking Bibliography 4: Definitions of Complexity 4.1 The Complexity of Complexity 4.2 Complexity and Systems Thinking 4.3 Complexity, Cybernetics, and Control 4.4 Types of Complexity 4.4.1 Detail Complexity Versus Dynamic Complexity Textbox 4.1 Overview of Types of Non-linear Causal Relations (Not Necessarily Limitative) 4.4.2 Objective Complexity and Subjective Complexity 4.4.3 Disorganized Complexity and Organized Complexity 4.4.4 Overview of Types of Complexities and Their Handling 4.5 Organic Organizations as Intelligent Complex Adaptive Systems (ICAS) Bibliography 5: Economic Growth, Complexity, and Institutional Conflicts 5.1 How Complexity Contributes to Economic Growth 5.2 Moderating Variables 5.3 The Limitation of Intuitive Management Books 5.4 A Conceptual Model for Economic Complexity Bibliography Part II: Organizational Complexity 6: Information and Complexity 6.1 The Paradox of the Information Society 6.2 Discursive Information and Disinformation 6.3 The Cybernetic Concept of Information 6.3.1 Goal-Information 6.3.2 Motivation or Axiological Information 6.3.3 Material Information 6.3.4 Eidetic Information 6.3.5 Accountability Information 6.3.6 Allelopathic Information 6.3.7 Interface Information 6.3.8 Causal Information and Conceptual Information 6.3.9 Pragmatic Information 6.3.10 Transaction Information (Transaction Data) 6.3.11 Reproductive Information 6.4 Complexity and Information Bibliography 7: Complex Decision-Making 7.1 Introduction 7.2 What Is a Decision? 7.3 What Is a Decision-Problem? 7.4 Well-Structured Problems 7.5 Why By and Large Is Decision-Making Successful? 7.6 What Is a Complex Decision-Problem? 7.6.1 Ill-Defined Complexity 7.7 Different Types of Complex Decision-Problems 7.7.1 A Perspective on Complex Decision-Problems 7.7.2 Professional Induced Complex Decision-Problems 7.7.3 Reflexivity Complex Decisions 7.7.4 Decision-Rights Complexity 7.7.5 Epistemological Complex Decision-Problems 7.7.6 Discovery Versus Justification Complexity 7.7.7 Temporality of Complex Decision-Problems Bibliography 8: Complexity and Coordination 8.1 Complexity and Coordination 8.1.1 Does Complexity Substitute for Coordination? 8.2 How Is Coordination Achieved? 8.3 Coordination in Complex Organizations 8.4 Coordination at the Fifth Level of Complexity: Stigmergic Coordination 8.4.1 Is Coordination Possible in High Complex Organizations? 8.4.2 A Kind of Fluidity 8.4.3 The Complexity of Interaction 8.4.4 Stigmergic Coordination 8.4.5 The Upside and the Downside of Free Interaction 8.4.6 Managing the Risks in Free Interaction 8.5 Complexity of Markets, Products, and Consumers Bibliography Part III: Complexity in Practice 9: Examples of Mastering Complexity 9.1 Complexity and Learning from Successful Cases 9.2 The Case IBM 9.3 The Case Procter & Gamble 9.4 The GIOCA Expert Centre in Amsterdam Bibliography 10: How CEOs Cope with Complexity 10.1 CEOs and Complexity 10.2 The Power and Risks of Abstract Thinking 10.3 CEO Turnover and Complexity 10.4 Simplicity Beyond the (New) Complexity 10.5 They Wade Into Complexity 10.6 Some Lessons from Successful CEOs 10.7 Complexity Leadership Versus Transactional Leadership Bibliography 11: Tools Executives Use to Deal with Uncertainty and Complexity 11.1 What Connects a Variety of Tools? 11.2 Mission 11.3 A Hierarchy of Values 11.4 Reconceptualizing, Reframing 11.5 Holistic or System Thinking 11.6 Scenario Planning 11.7 Preparedness and Rolling Forecasts 11.8 The Organic Organization 11.9 Multidimensional Information 11.10 Information-Based Empowerment 11.11 Loose Control and Loose Programming 11.12 Management Development and HR-Policy 11.13 Architecture and Modularity 11.14 The Resource Allocation Process 11.15 Open Innovation and Open Business Models 11.16 The Real Option Method, Phased Funding, and Discovery-Driven Planning 11.17 Using Mathematical Models for Risk Management and Managing Complexity 11.18 The Concept of the Platform Organization 11.19 Fast Feedback Information to Deal with Complexity? 11.19.1 Feedback as a Defining Element in Complexity? 11.19.2 The Cognitive Role of Feedback 11.19.3 Types of Feedback Loops 11.19.4 The Context of Feedback: Control Bibliography 12: Organization Design and Complexity 12.1 Introduction: Is Complexity a Design Principle? 12.2 How to Factor Complexity into Organization Design? 12.3 Kanter´s Concept of the Modern Organization 12.4 Complexity and the Design of Functions 12.4.1 General 12.4.2 The Design of the Customer Value Proposition and Operational Processes 12.4.3 The Governance System 12.4.3.1 The Design of the System of Corporate Governance and Complexity 12.4.3.2 The Complexity of Corporate Governance Systems 12.4.3.3 Epistemological Complexity in Corporate Governance 12.4.3.4 Complexity and Risk Management 12.4.3.5 Complexity in Supervision 12.4.3.6 Complexity and the To Be Ratified Strategy 12.4.3.7 Complexity and Strategy Execution 12.4.3.8 The Complexity of the Organization 12.4.3.9 Complexity, Information, and Supervision 12.4.3.10 Complexity and To Be in-Control 12.4.3.11 Organized Complexity and Culture 12.4.3.12 Complexity in the Audit Committee 12.4.3.13 Concluding on the Role of Complexity in the Design of the Governance System 12.4.4 Complexity and the (Strategic) Guidance System 12.4.5 Complexity and the Design of the Organization of Information 12.4.6 Complexity and the Design of the Support Functions 12.4.6.1 The Capability of the Finance Function to Deal with Complexity 12.4.6.2 Designing for Complexity at the Levels of Tools 12.4.6.3 HR and Complexity 12.4.6.4 Complexity and Empowering Workers 12.5 Conclusion Bibliography 13: Complexity and Management of Change 13.1 The Butterfly-Effect 13.2 Planned Change 13.3 Organization Development 13.4 The Emergent School for Change 13.5 The General Management View on Change 13.6 Systemic Change Bibliography 14: A Final Word Index