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Associate Professor, School of Systems and Enterprises Director, Center for Complex Adaptive Sociotechnological Systems (COMPASS) http://www.socio-technical.org
• Organizations as Adaptive Organisms • Three Perspectives on Complex Adaptive Organizations:
– Perspective I: Organizations as Holons – Perspective II: Organizations as Social Networks – Perspective III: Organizations as Dynamic Systems
Organizations as Adaptive Organisms
Come into existence
Fail to Adapt
Merge with others
Die (natural, forceful)
Do organizations have a judgment day?
Perspective I – Organizations as Holons The Primacy of Architecture .
Open Question: Why do individuals form/join/support/sustain social structures? Family Friends and Peers Work Place Economy .
.To Achieve Individual Needs…….
Caveat: The Social (Faustian) Bargain Family Work Place Friends and Peers Economy .
Societies and Humanity Humanity Society Social Grouping Individual . rules (protocols) and structural configuration (power relations/hierarchy) Individuals. • Individuality is a rather a recent phenomenon •Social grouping/ecosystem can emerge starting from two individuals • Every social grouping has its own architecture consisting of values. Social Groupings.• Human beings are social animals.
Societies and Humanity • Social groupings develop a life of their own. with emergent goals and behaviors that are not the sum of individual goals and behaviors • Organizations/Enterprises are one type of social grouping with explicit (and many implicit) values.Individuals. Social Groupings. protocols and structural configurations Humanity Society Social Grouping Individual .
on which the holons form the nodes.• The concept “Holon" was introduced by Arthur Koestler in "The Ghost in the Machine" (1967) • A Holon is a system that is a whole in itself (consisting of parts) as well as a part of a larger system • A hierarchy of holons is called “holarchy” • Hierarchies are "dissectible" into their constituent branches. and the number of holons on any given level is called control its "span" (Herbert Simon) Holons . the branching lines represent the The number of levels which a hierarchy channels of communication and comprises is a measure of its "depth".
1967) 1. The organism is to be regarded as a multilevel hierarchy of semi-autonomous subwholes. and so on. branching into sub-wholes of a lower order. Sub-wholes on any level of the hierarchy are referred to as holons .Holonic Principles (Koestler. and in its functional/behavioral aspects not a chain of elementary units of behavior 2. The organism in its structural aspect is not an aggregation of elementary parts.
Individuals. This dichotomy is present on every level of every type of hierarchic organization. Holons are self-regulating open systems which display both the autonomous properties of wholes and the dependent properties of parts. tribes. and is referred to as the "Janus phenomenon" 4.Some Holonic Principles (Continued) 3. nations are social holons . families.
Holonic Architecture vs. the strategic selection of the actual behavior among permissible choices is guided by the contingencies of the environment . • The architecture determines the holon’s explicit (and implicit) values. its explicit (and implicit) structural configuration and explicit (and implicit) functional protocols • While the architecture defines the space of permissible behavioral options in the holon's activity. Strategy • Social holons are governed by an architecture and display more or less flexible strategies.
systemic failures etc. there are two options: the architecture adapts itself or it collapses (revolutions.Holonic Architecture vs. and the strategy decides the course of the game • However social holons are more complex than others. • When sufficient parts (individuals. rebellions. because not all parts comply to the same extent with the architectural protocols. groupings) challenge/disobey/put stress on the protocols.) • Question: Can an organizational strategy be to change the architecture of a holon? What are the challenges? . Strategy • The architecture determines the rules of the game.
Organizations as Social Holons • Every level of the organization has the dual tendency to preserve and assert its individuality as a quasi-autonomous whole and to function as an integrated part of an (existing or evolving) larger whole. Extended Enterprise Enterprise Organizational Divisions Departments Teams Individuals .
the INT tendencies of its partness Extended Enterprise: Enterprise Divisions Departments Teams Individuals .Organizations as Social Holons • This polarity between the Self-Assertive (S-A) and Integrative (INT) tendencies is inherent in the concept of hierarchic order. • The S-A tendencies are the dynamic expression of the holon's wholeness.
able to survive disturbances • The subordination to higher level holons ensures the effective operation of the larger whole.Holonic Stability • The stability of holons and holarchies stems from holons being self-reliant units. What is a good example of an organizational structure with strong holonic stability? . which have a degree of independence and handle circumstances and problems on their particular level of existence without asking higher level holons for assistance • Holons can also receive instruction from and. to a certain extent. be controlled by higher level holons • The self-reliant characteristic ensures that holons are stable.
The Importance of Communication in Maintaining the Architecture • Since a holon is embedded in larger wholes. it is influenced by and influences these larger wholes • And since a holon also contains subsystems it is similarly influenced by and influences these. for whatever reason. • Information flows bi-directionally between smaller and larger systems • When the bi-directionality of information flow and understanding of role is compromised. the organizational architecture gradually begins to weaken – wholes no longer recognize their dependence on their parts – parts no longer recognize the organizing authority of the wholes .
and agent-based modeling) .Holonic Organization Summary • Holons are an interesting way to look at organizations • Shed light on many interesting organizational dynamics • Currently no authoritative methodology to do holonic modeling of organizations although efforts under way (combination of social network analysis.
Perspective II – Organizations as Social Networks The Primacy of Connections .
Organizations as Scale-free Networks • Organizations can be thought of as a scale-free social networks in which member individuals are connected to each other based on their social status and interaction capacity • Scale-free networks show a power law degree distribution which is seen in many real networks .
Organizations as Scale-free Networks • Interest in scale-free networks started in 1999 with work by Albert-László Barabási and colleagues at the University of Notre Dame • They mapped the topology of a portion of the Web finding that some nodes. • One mechanism that can explain this is preferential attachment . had many more connections than others • The network as a whole had a power-law distribution of the number of links connecting to a node. which they called "hubs".
is distributed among a number of individuals or objects according to how much they already have. • Also called the Matthew effect (For unto every one that hath shall be given. credit or connection. so that those who are already wealthy receive more than those who are not. academic citations as well as in social networks • Makes growth dynamics of networks path dependent • What does this say about equal opportunity and fairness? . typically some form of wealth. and he shall have abundance: but from him that hath not shall be taken away even that which he hath —Matthew 25:29.Preferential Attachment • PA is a class of processes in which some quantity. King James Version) • Can be observed in financial systems.
containing a few nodes which have a very high degree and many with low degree • In many cases a good rule of thumb is the 80/20 pareto principle (20% of a network comprising 80% of its degree/connectedness) • This proves very critical in organizational behavior and change efforts in organizations .The Importance of Power Laws in Social Networks • Most social networks have power-law link distributions.
• Thus hubs are both the strength of scale-free networks and their Achilles' heel. if we choose a few major hubs and take them out of the network. • Think Terrorist Cells .The Importance of Power Laws in Social Networks • The power law distribution highly influences the network topology • Major hubs are closely followed by smaller ones and so forth • This hierarchy allows for a fault tolerant behavior • Since failures occur at random and the vast majority of nodes are those with small degree. • Even if such event occurs. it simply falls apart and is turned into a set of rather isolated networks. • On the other hand. the network will not lose its connectedness. the likelihood that a hub would be affected is almost negligible. which is guaranteed by the remaining hubs.
Small World Networks: 6 Degrees of Separation • The small world experiment comprised several experiments conducted by Stanley Milgram examining the average path length for social networks of people in the United States. • The research was groundbreaking in that it suggested that human society is a small world type network characterized by short path lengths. • The experiments are often associated with the phrase "six degrees of separation“ .
Tipping Point for Change in Organizational Networks • The point of critical mass where change becomes irreversible and everything changes at once • Things tip because of the dramatic efforts of a select few • In order to create one contagious movement you might have to create several small ones Source: The Tipping Point (Gladwell) .
• Connectors Different Roles for in Complex Organizational Networks – People with a special gift for bringing the world together • Know lots of people • Instinctive and natural gift for making social connections • “Weak ties” are always more important than strong ties • The closer an idea or product comes to a connector. the more power and opportunity it has as well • Word of mouth epidemics are the work of connectors • Mavens – People with in-depth knowledge • • • • • Are not passive collectors of information Want to share their information with as many people as possible Not persuaders Information and know-how go-to people Have an emotional need to solve problems • Salesmen – One with the skills to persuade us when we are unconvinced of what we are hearing .
• Hubs. preferential attachment.Social Networks Summary • Understanding organizational networks and the connectedness of individuals key to analyzing an enterprise or an extended enterprise. small world phenomenon and tipping point key to network behavior • Social network analysis is used to analyze the relationships between different actors in a network • Agent-based insights are being leveraged to better understand the dynamics of networks .
Perspective III – Organizations as Dynamic Systems The Primacy of Feedback .
B. and results in C. one-directional causeeffect relationships.” . and AB. which changes both A and B. • A more useful inquiry is “how” or in what way something happened. • “A interacts with B to produce AB. • It serves little purpose to ask “why” persons do what they do. which is partly A. Feedback Loops. and Chaos Theory • It is not useful to understand human behavior through searching for linear.Causation.
the harder the system pushes back. Cause and effect are not closely related in time and space. • There is no blame. – Moving the problem around. Faster is many times slower. • The harder you push. Small changes can produce big results—but the areas of highest leverage are often the least obvious. but not at the same time. • • • • • • Behavior grows better before it grows worse. • Dividing the elephant in half does not produce two small elephants. Fifth Discipine. • You can have your cake and eat it too.Laws of Complex Dynamic Systems • Today’s problems come from yesterday’s solutions. The cure can be worse than the disease. 1990 . Senge. – Compensating feedback. The easy way out usually leads back in.
Policy Resistance • Complex systems and organizations show Policy Resistance • That means when you try to take them from point A to point B they either go back to point A or they end up in point C. which may be even more undesirable than point A Desired Path Actual Path A B C .
Summary of Dynamic Organizational Systems • Feedback and Delay Key to understanding counterintuitive organizational behavior • “Side effects” do not exist. they are a results of our poor definition of the system boundaries and components • System Dynamics modeling is used to model complex non-linear behaviors in dynamic organizational systems .
with hidden “architectural” aspects and with counter intuitive behavior • In other words it takes a life of its own • As such we might be able to influence organizational architecture. we presented three where architecture. but we cannot “architect” and enterprise . networks and dynamics were critical points of departure • When looking at a complex organization. we need to understand that it is dynamic.Conclusion • There are many different perspectives in looking at organizations.
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