Complexity theory and organizations

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Complexity theory and organizations, also called complexity strategy or complex adaptive organizations, is the use of the study of complexity systems in the field of strategic management and organizational studies. It draws from research in the natural sciences that examines uncertainty and non-linearity. Complexity theory emphasizes interactions and the accompanying feedback loops that constantly change systems. While it proposes that systems are unpredictable, they are also constrained by order-generating rules. Complexity theory has been used in the fields of strategic management and organizational studies. Application areas include understanding how organizations or firms adapt to their environments and how they cope with conditions of uncertainty. Organizations have complex structures in that they are dynamic networks of interactions, and their relationships are not aggregations of the individual static entities. They are adaptive; in that, the individual and collective behavior mutate and self-organize corresponding to a change-initiating micro-event or collection of events. Organizations can be treated as complex adaptive systems (CAS) as they exhibit fundamental CAS principles like self-organization, complexity, emergence, interdependence, space of possibilities, co-evolution, chaos, and self-similarity. CAS are contrasted with ordered and chaotic systems by the relationship that exists between the system and the agents which act within it. In an ordered system the level of constraint means that all agent behavior is limited to the rules of the system. In a chaotic system, the agents are unconstrained and susceptible to statistical and other analyses. In a CAS, the system and the agents co-evolve; the system lightly constrains agent behavior, but the agents modify the system by their interaction with it. This self-organizing nature is an important characteristic of CAS; and its ability to learn to adapt, differentiate it from other self-organizing systems.

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Complexity theory and organizations

Complex system

A complex system is a system composed of many components which may interact with each other. Examples of complex systems are Earth's global climate, organisms, the human brain, infrastructure such as power grid, transportation or communication systems, complex software and electronic systems, social and economic organizations (like cities), an ecosystem, a living cell, and ultimately the entire universe.

Organization

An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from the Greek word organon, which means tool or instrument, musical instrument, and organ. There are a variety of legal types of organizations, including corporations, governments, non-governmental organizations, political organizations, international organizations, armed forces, charities, not-for-profit corporations, partnerships, cooperatives, and educational institutions, etc.