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.’
Author(s): Johannes Strikwerda
Series: Future of Business and Finance
Publisher: Springer
Year: 2023
Language: English
Pages: 352
City: Cham
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
