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BACKGROUND NOTE: SCIENCE CONCEPTS IN COMPLEXITY THINKING

Sasanka Sekhar Chanda Indian Institute of Management Indore March 2020

1.0. Objective of this background note.

The course, An Introduction to Thinking in Complexity, seeks to broaden the horizon of
students of management and social sciences in order to develop better appreciation of social
phenomena, potentially leading to more informed decision-making. A conventional social
science subject such as Economics does an excellent job of defining terms and their
interrelationships (ontology). However, most of Economics—with notable exception in works
of Commons, Veblen, Lachmann and a few others—focuses on finding equilibrium outcomes
in closed systems. For this purpose, Economics draws from mathematics involving linear
differential equations of the kind invoked in Newtonian mechanics and in heat transfer
phenomena. This form of mathematical molding has three characteristics that distort reality
(a) economic agents are considered largely homogeneous (b) variegated patterns of
interaction between agents are ignored and (c) irreversibility conditions are left out of scope.
General Systems Theory and Complexity thinking provide a way out of this impasse.
General Systems Theory allows consideration of open systems, whereby a given
system can exchange resources and energy with the surroundings. General Systems Theory
recognizes that, whereas a handful of differential equations may suffice in understanding
phenomena involving inanimate matter, such approaches are unproductive and illegitimate
when consideration is extended to (a) more complex phenomena like life, and (b) to even
more complex phenomena involving mind and society. In conjunction with the doctrine of
levels, the system holism principle recognizes that (a) a higher level (macro-level) entity may
emerge based on stylized actions of agents at the micro-level and that (b) the emerged-level-
entity possesses a new quality distinctive of the higher complex (and such quality is not
found in the constituent units). This is a major improvement over conventional approaches
where a simple arithmetical average of individual attribute values is considered as
representative of a group’s potential.
Complexity Science, or more accurately order-creation science, studies the processes
by which emergence occurs. Mechanisms for explaining order creation involve critical
thresholds, positive feedback loops, basins of attraction, phase transition, etc.1 Agents can be

1
Hierarchical systems, modularity, loose and tight coupling, connectedness (e.g. scale-free and small world
networks) high-reliability organization processes, bounded rationality, heuristics on cues from the environment,
strange attractors, and fractals are some other principles in complexity.
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heterogeneous, agents can interact in variegated ways, and phenomena involving

irreversibility are in scope. Moreover, all of Aristotle’s four causes (formal, final, efficient
and material causes) can be considered in agent-based-computational-simulation modeling,
an important tool for thinking in complexity. Also, all four process theory models
(teleological, evolutionary, life-cycle and dialectic) can be experimented with.
In sum, thinking in complexity is about building more realistic models to understand
the world, in order to improve decision-making. In order to understand the baseline model
state, (i.e. to answer the question “realistic with respect to which other models?”), we need to
appreciate a few models from science, notably Physics. Specifically we compare Newtonian
models with later models, viz. those involving the second law of thermodynamics, quantum
theory, theory of relativity, and Heisenberg Uncertainty Principle to understand the novelty
in thinking underlying the latter. Humans learn by comparing the lesser known entity with a
better known entity and analyzing the causes for the differences. Likewise, we study a few
well-known concepts/ models from science and appreciate exactly what assumptions get
changed on account of switching consideration from inanimate objects to animate objects
including humans.

2.0. Model Centered Science: Studying a phenomenon is really a study of a model of a

phenomenon
Our senses are deficient; we can be deceived in what we see, hear, touch, feel or taste. For
this reason, studying the real world as-is is fraught with potential for error. Hence we define
idealized constructs, build a model (of a specific part of the real-world containing the
phenomenon of interest) and study the model. Here are some idealizations we are already
familiar with, by virtue of school education: point mass, a line having just one dimension, a
straight line, frictionless surface, etc.

2.1. Mechanics of motion. If X is defined as displacement (distance travelled in one

direction), V is defined as velocity (displacement/ time), and f is defined as acceleration (rate
of change of velocity), we have:
f = Second Derivative of (X), with respect to time t
Integrating once we have velocity V as (where u0 is the starting velocity)
V = u0 + f * t
Noting that V is really the first derivative of displacement X, by integrating once more we
have:
X = u0 * t + 0.50*(f * t2)
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Newton’s second law states that force equals mass times acceleration. Newton’s law of
gravity states that the force of attraction (F) between 2 masses M1 and M2:
F = (-1)*G * (M1 * M2)/ R2
where R is the distance separating the two masses, G is the universal gravitational constant,
and the negative sign signifies a force of attraction (and not a force of repulsion). A similar
equation applies for force of attraction or repulsion between (electrically) charged particles
and poles of magnets2.

2.2. First law of thermodynamics. Matter (or energy) can neither be created nor destroyed;
it can only be transformed from one form to another. This means that sum of matter (or
energy) before a transformation will equal the sum of matter (or energy) after the
transformation.

3.0. The problem with conventional thinking (in Economics)

The explanatory mechanism underlying most of conventional economics draws from
mechanics of motion and the first law of thermodynamics as described above. In order to
force-fit Economics into this paradigm, humans are assumed to behave like atoms, i.e. it is
assumed that humans wish to maximize utility in ever period. This makes the epistemology
(explanatory mechanism) propagated by Economics problematic: agent heterogeneity is
missing, variegated ways of agent interaction is missing and there is no place for considering
irreversibility in phenomena.

3.1. Why do human agents display heterogeneous behavior?

Here are some common reasons why human agents display heterogeneous behavior.
(I) Physiology: A person who is thirsty will look for drinking water. A person who is hungry
will look for food.
(II) Psychology: A person who is irritated or angry may make mistakes in the simplest tasks.
A person who is happy may forgive little mistakes by others.
(III). Peer Pressure (Normative pressure / social pressure): A student who wishes to study
may join a game of football with colleagues: the time to study is precious, so is the time
available with friends (all will disperse upon graduation). Another student may risk
opprobrium of peers and sneak out to the library to study in peace (Big assumption: peace is
available in the Library). One may think of similar considerations in work situation.

2
The reliance on differentiation entails that the Left Hand Derivative must always equal the Right Hand
derivative. Such a condition cannot be met for phenomena involving irreversibility.
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3.2. Why is it necessary to consider interaction between (human) agents or companies?

Companies in the same industry compete with each other for the same wallet-dollars of
customers of their products. Companies benchmark against each other (learn best practices),
get consultancy from the same handful of consultancy firms, and are under similar regulatory
norms. Neglecting inter-company interaction distorts reality.
Humans learn from verbal and non-verbal cues of others. Humans form coalitions to
fight for relevant causes. Humans agree to abide by a set of norms to enable coordination3.
Again, in any model involving human behavior, ignoring interaction between agents provides
a distorted view of the reality.

3.3. Why is it necessary to incorporate irreversibility into management thinking?

The concept of irreversibility comes from the second law of thermodynamics. This law states
that entropy (or disorder) of a system can only increase over time (i.e. entropy cannot
reduce). This means that what applies in the forward direction does not apply in the reverse
direction. Simply put, some things once done, cannot be undone.
Example: You are building a factory. Halfway through you wish to incorporate a major
change. It will be very difficult: you cannot get back the original funds that you had, that got
spent into paying labor, buying consumables and so forth. In this situation, you will get
nonsensical advice if you invoke an ideology that uses equations that assume that functions of
all variables are continuous and differentiable.
Note: no human can have perfect foresight. Hence when you undertake a major
initiative, you will do so based on a set of assumptions regarding your own capabilities and
some further assumptions regarding behavior of others, including relevant environmental
entities which impact your project. Some of these assumptions will invariably not hold out.
At that time, you, the manager, have to face irreversibility.

4.0. So, if models of decision-making based on Newtonian mechanics and first law of
thermodynamics are inappropriate, what further considerations need to be extended by
managers? [i.e. what models should mangers use?]

This is a very broad question. I do not have a complete answer. I suppose no one will ever
have a complete answer to this question. However, we can definitely consider some later
developments in the sciences and strive to build better (more realistic) models for decision-
making.

3
For example, drive on one particular side of the road; but, give way to pedestrians and cyclists; AND, be aware
that junior people or seniors or unmindful people may suddenly come in the way, etc.
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5.0. Selected Developments in Sciences Post-Newton

5.1. Heisenberg’s Uncertainty Principle: It is impossible to determine the position and
momentum of a sub-atomic particle like the electron at the same instant. Why?
In order to see where the electron is located, we need to throw light on the electron.
There is a good chance that the momentum of the electron will change by absorbing some
photons from the incident light. Our very attempt to see it ends up changing its momentum.
So, we cannot get information on both the position as well as the momentum at a given point
in time.
In a Wilson Cloud Chamber, we can measure the momentum of an electron by
observing the pattern of the tracks. However, the electron is gone, so we do not have access
to the position data at the time the momentum data is read.
The Heisenberg Uncertainty Principle departs from Newtonian mechanics is that we
are encountering a novel proposition that the momentum and position of a particle cannot
both be known, at a given instant. It is incompatible with a Newtonian world of linear
differential equations, where velocity (V) is the first derivative of displacement (X) with
respect to time (which can always be computed), mass times velocity is momentum, and
displacement being known implies that position is known. If you deem that Heisenberg’s
Uncertainty Principle can be put aside, and Newtonian mechanics should guide thinking, you
are signing up for a false belief that it is possible to have perfect foresight.

5.1.1. What has Heisenberg’s Uncertainty Principle got to do with management thinking?
Plenty.

Example 1: External entities (financial analysts, consultants, members of the media) often
pressurize managers to measure more and more things, and report metrics therefrom. What
goes under-appreciated is that the very act of attempting to measure something can alter a
phenomenon; the result is that the measurement obtained is different—and possibly more
negatively tilted—from what was the case previously. Consider this question: When would
you feel more comfortable in engaging with your work with heart and soul?
(a) When there is someone looking over you, watching your every move and making mental
notes as to what to report to the Bosses. OR
(b) When you are left in peace, having been conferred sufficient autonomy to carry out a task
to the best of your judgment and ability.
Speaking bluntly, a manager from Hell is one who does not have the ability to create
conditions that enable capable employees realize their potential.
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Example 2: In a new domain—for example in an innovation project—for several parameters

important to management the only way to learn the impact of a change is by implementing
the change (possibly in a small scale) and observing the outcomes. It is impossible to have
foresight regarding what exact intervention will bring about what precise change. And
… not all experiments will be successful. Yet, managers are urged to take a toxic attitude that
any mistake by an employee arises solely from self-seeking, and therefore must be punished.
This kind of work environment is unlikely to yield any radical innovation, ever.
Example 3: Recall the concept of a least-count or precision-level. If the instruments your
company has cannot measure distances below 1 mm, you have no means to investigate or
improve phenomena that occur in sub-one-mm dimension. Alternately, in Quality Assurance
terms, there is a point beyond which performance cannot be improved (i.e. say in terms of
lower variance in dimensions of widgets manufactured) by training the line worker better:
better machines (incorporating higher precision technology) are required, and it is the
management’s responsibility to provide those (better) machines.

5.2. Quantum Theory

5.2.1. Prologue. At one point of time, it was thought that the atom is the smallest particle of
matter (element). Later it was found that there are positive and negative charged sub-particles
in an atom. Since an atom overall has neutral charge (nil charge), the question was, why don’t
the negatively charged electrons collapse on the positively charged center?
Dalton answered this question: electrons don’t fall into the positively charged center
despite there being force of attraction for the same reasons that the balance between various
forces allow planets to circulate around the Sun (and not fall into it, pulled by the forces of
gravitation).
Subsequently, electrodynamic phenomenon was discovered. In layman’s terms, it
means that if a negatively charged particle is circulating around a positively charged center,
the former must spiral in and fall (failing which fundamental laws of nature will be violated).
Dalton’s theory failed to resolve this anomaly. It was therefore abandoned. Its place was
taken by the Quantum Theory. I describe that in a brief and simple way below4.

5.2.2. It is believed that light consists of discrete packets of energy, called quanta or photons.
The amount of energy E, for light having wavelength ν is given by E = h* ν, where h is the

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It may be noted that Quantum Theory has advanced quite a bit, beyond the layman description I provide. In
fact it has been challenged by String Theory, Loop Theory, etc. For our purposes the simple description above
will suffice.
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Planck’s constant. An electron in a specified lower orbit around the (positively charged)
nucleus in an atom may absorb one photon and jump to a specific higher orbit. Likewise, an
electron may emit a photon to jump to a specific lower orbit. Since a photon cannot be
divided, electrons cannot reside in the inter-orbital space. Moreover, an electron gains
potential energy by absorbing photons: possession of this potential energy is the reason that
an electron does not spiral into the positively charged nucleus (as electrodynamic
phenomenon would otherwise require).
5.2.3. What has Quantum Theory got to do with management thinking?
Plenty.
First note the discontinuity introduced by the quantum concept. This is significant
because discontinuous functions do not admit to differentiation and integration5: the
Newtonian straightjacket that all phenomena must meet the demands from a few
differential equations is finally cast away. One eagerly awaits the day when Economics will
do likewise and bring fresh theory, better-grounded in reality!
Managers need to identify discontinuities in their decision-making parameters, and
not rely on equations that fail to provide for discontinuity. For example, fixed costs go up in
steps (for increasing capacity). Moreover, you cannot use half-a-factory. You may split the
cost of a factory with a collaborator, but that will bring in issues regarding decision-rights6. If
your factory can employ a Welder for only part of the day, you may still have to pay a full
day’s wages because the Welder will refuse to come to the factory premises otherwise. Etc.

5.3. Theory of Relativity (and its departure from Newtonian physics)

Newton developed a set of equations that described the physical properties of the world
around us. All observers, regardless of whether they are moving or not–i.e. regardless of
which “inertial frame” they are in–are equivalent when it comes to their description of the
world around them. So two individuals moving in different directions would see events
unfold in the same way.
However Maxwell’s equations for electromagnetism were observed to change form
when one moves from one inertial frame to another. So an individual who is not moving
may observe a distinctively different physical phenomena compared to a person who is

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Whether piece-wise differentiation / integration will be useful is a function of context. Certain activity like
eating food in a healthy way, building expertise, having a baby etc. need a fixed amount of time, no matter what.
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Consider, for instance the demand from the activist investors behind the Children’s Growth Fund (who owned
~2% stock in Coal India) that Coal India must sell coal to NTPC and others at prices much higher than present.
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moving. This can be experienced: Think of the sound of the siren of a train, when you are
stationary AND
(a) The train is stationary.
(b) The train is moving towards you.
(c) The train is moving in a direction away from you.
You will experience the sound of the siren in three different ways7.
From above we may deduce that, when the trajectories of the two companies C1 and
C2 are different:
If X1 is true to a manager M1 in company C1 with respect to a particular event,
X2 is true with regard to the same event and context (where X2 is different from X1) to a
manager M2 in the other company C2.
Thus, even the brightest of managers may misread competitor moves and take actions
that eventually prove to be disastrous for his/her company. For example, the company C1
may have dropped prices in a particular market to clear inventory and move out. If company
C2 —interpreting C1‘s move as a hostile action—retaliates by dropping prices in the same
(and/or other) market8, a price war may ensue, hurting all industry players. On the other hand
if C2 spent the effort to find out why C1 dropped prices, it would have found little cause for
concern, and avoided the showdown (and monetary losses), directing energy to more
productive areas instead. Sensitivity to concepts of relativity may help here. At the bare
minimum, the cost of finding out C1’s motive should be compared with the cost (revenue
loss) of incorrect interpretation (and other relevant costs), in order to make better decisions.
Thus, the oft-repeated saying in Economics that people (or companies) act self-
interestedly all the time is not just wrong, it is misleading. The fact that managers may be
mistaken in interpreting actions of others is a much bigger problem needing urgent
attention. We may note that, one strand of Western philosophical thought (positivism)
underlying much of conventional business school advocacy that there is one version of truth
applicable in the same way for everybody—in conjunction with Hobbesian premises
articulated in The Leviathan—is partly to blame for this state of affairs9.
Anyway back to relativity theory: At the turn of the 20th century, a new mathematical
transformation was discovered that could preserve the structure of Maxwell’s equations when

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Scientists call this phenomenon the “Doppler Effect”.
8
Retaliation by dropping prices is a standard prescription of formulae drawn from the Newtonian paradigm.
9
The postmodern school of philosophical thought leads the struggle to free science from the stranglehold of
positivism. In the Iowa Conference (1969) philosophers of science acknowledged that the received view version
of positivism is incorrect and voted for abandoning it. Unfortunately, significant segments of management
research continues to labor fruitlessly under a discredited version of positivism, namely logical empiricism.
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moving from one frame to another, the Lorentz transformation. If taken literally, the Lorentz
transformation implies that time and length do actually change, depending on which frame of
reference you are in.
General relativity was built on Einstein’s special relativity. In 1905 Einstein
postulated the principle of relativity: that all inertial frames are equivalent, the observer’s
motion (with constant velocity) is irrelevant, and that all laws of physics should have the
same form in all inertial frames. Hence time and space are no longer absolute and change
their properties when changing from one inertial frame to another.

5.4. Second Law of Thermodynamics:

The second law of thermodynamics—that the entropy or disorder in a system will continue to
increase (unless there is a channel for inflow of negentropy from outside the system)—
sensitizes us to irreversibilities implied by passage of time. The fact that it is easier to
separate the mixture of iron filings and wood shavings compared to the effort involved in
separating a mixture of salt and sugar provides the following food for thought.
First, any transformation—be it a combination (mixing salt with sugar; synthesizing
Ammonia from Nitrogen and Hydrogen) or separation (cutting a tree to get the wood;
extracting metal from ore)—involves a change in entropy. If negentropy (energy) is
introduced by applying effort (for example as is the case when a metal is extracted from its
oxide ore by electrical energy), the energy stays locked and provides certain benefits (e.g. the
pure metal can be used to make implements either by itself or in alloys). On the other hand if
disorder is introduced (e.g. the case of mixing salt with sugar), we must be ready to expend a
lot of effort, should we need to get back the constituents in their original forms. In other
words, a lot of effort shall be needed to decode the message from the signal. Here the
mixture is the signal and the constituents in pure form is the message underlying the signal.
Second, as we remarked earlier, not all signals are equally hard to decode. Iron filings
can be easily separated from a mixture with wood shavings. If some easily-discernible sub-
patterns are repeated, it requires much less effort (number of bytes) to communicate a signal.
Third, as we saw in the case of convection currents, when heat flows from a hot body
to a cold body, certain amount of work (or mechanical energy, which is a high quality
energy) can be extracted: in the case of convection it is manifested in the air molecules
pushing back against the atmosphere to rise up (and also in their gain of potential energy).
The refrigeration cycle demonstrates the other side of the phenomenon: it is necessary to
expend high quality energy (electrical energy) to move heat from a cold body to a hot body.
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Fourth, heat at low temperature is a low quality energy, with limited uses. Electricity
and Mechanical energy (e.g. rotation of a pump by electricity to lift water to a height confers
mechanical or potential energy to the latter) are high quality energy: they can be converted
to other forms of energy with low loss. Chemical energy—as from petrol, or from a fuel cell
running on hydrogen and oxygen—is of intermediate quality. The loss in conversion is a bit
more than the loss when electricity or mechanical energy is converted to other forms. Coal
with lot of ash content would come towards the bottom of the ladder of energy quality, since
a substantial part of the energy has to be rejected as waste heat, when one tries to extract
electrical energy from coal in a thermal power plant. The bottommost rung is heat at close to
room temperature. Also recall Carnot’s principle: if you use up 70 units of electricity to take
water at room temperature (30 degrees Celsius) to 100 degrees Celsius, you will get back
only a tiny fraction (less than 10%) as electricity should you have a machine that takes the
water at 100 degrees as input and extracts electricity, in the process bringing back the
temperature of the water to room temperature10.

5.4.1. What has the second law of thermodynamics got to do with management thinking?

The second law of thermodynamics is at the heart of the discipline of strategic management. I
will provide two indicative examples.
Example 1: According Lachmann (from the Austrian School of Economics) Entrepreneurial
Managers imagine certain future states of the world and commit large amount of resources
and time to have the successful products and services in place in that future date. For
example, looking at the transportation problem in cities, one entrepreneur thinks that the
hyper-loop is the solution. Another innovator may focus on developing flying shoes. A third
may consider zeppelin balloon kind of vehicle. Yet another may favor a network of
underground tunnels (e.g. The Boring Company). The future that will materialize will be the
net of all these innovation actions. Parts of the technology developed by several different
entrepreneurs may go to fashion something entirely unanticipated.
The entrepreneur commits time and resources in order to generate a coherent pool of
negentropy. The entrepreneur believes that once (s)he spends time and effort to fashion that
pool of negentropy, it will pay handsomely. The commitment is largely irreversible. Often it
has only the vision and persuasiveness of the entrepreneur to support it. Once a concept is
proven though, imitators will come in. But they will face time-compression diseconomies:

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The remainder of the energy gets dissipated as waste heat.
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either they have to spend a lot of time carrying out research to reach where the entrepreneur
is, OR they have to pay a steep market price to buy out the entrepreneur11 (and be satisfied
with incremental improvements thereafter).
Example 2. Unlocking (one-time) shareholder value by dissipating negentropy. Intel makes
motherboards and microprocessors. Several times in its chequered career, Intel has received
offers from the financial markets to divide into two separate companies—one focusing on
motherboards, another focusing on microprocessors. Analysts estimate that the value of the
shares of 2 separate companies will be 3X or more! Yet Intel has resisted (helped, in no little
measure, by the US Government, which considers Intel a strategic, national asset). The
synergy between the 2 divisions allows Intel to accomplish many things which standalone
companies cannot. It took many years to build this. Once divided, it may take many years to
build back this synergy, should it be needed (time-compression diseconomy, again). Yet, it is
a fact that one-time shareholder value (in $$) can definitely be unlocked by breaking Intel
into two. However, a short while after the division, Intel A and Intel B will become pale
shadows of their former self. By that time though, the Funds that encouraged Intel to break
up would have pocketed the gains from the temporary rise in share-price and offloaded the
shares of Intel A and B to some unfortunate Pension Fund or Insurance Fund or similar12.

6.0. Some other concepts

6.1. Critical Mass. Originally it meant to signify the threshold after which a nuclear fission
reaction becomes self-sustaining—i.e. no longer requires bombardment with sub-atomic
particles from outside. In complexity we likewise concern with the first critical point (RC1)
below which Newtonian mechanics applies, and beyond which emergence takes place. For
fluid flow the critical vector is velocity of fluid through the channel. For convection current,
it is the temperature gradient from the earth’s surface to the upper layers of the atmosphere.
The term critical mass is present in Investopedia as well. This refers to the threshold
at which time a company becomes self-sufficient, in the sense that it ceases to require
periodic injection to large amounts of cash in order to carry on13.
Management implication: Don’t go for grabbing the moon* before time: either you
will fall or someone else will take the moon away from your hands. (*going for highly
ambitious projects in your fledgling company). Also note: Some mistakes are forgiven for

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If you come across the case on Nucor in SM-II pay special attention to this point!
12
Please see Nicholas Nassim Taleb’s blog to understand how this is done. Involves $2000 wine!
13
NN Taleb’s counterview. There are 3 kinds of bankrupt (large) corporations: Cos. (i) that already declared
bankruptcy, (ii) know they are bankrupt but are hiding it, and (iii) that are bankrupt, but they don’t know it yet.
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juveniles, but not of adults. With great power comes great responsibility. The coming into
age of a company (i.e. going past the critical mass) will attract enhanced scrutiny from other
ecosystem players (suppliers, customers, competitors, substitutes, society) and the regulators.

6.2. What was the point of the detailed discussion regarding PV = C(T) and PVγ = C(T)?
This discussion was more philosophy than science. Knowledge is defined as justified true
belief. The justification needs to originate in reliable cognitive processes. This means that,
given a set of (defendable) assumptions, logical deductions by means of mathematical
modeling or computational simulation modeling can serve as statements of theory. Further,
when a theory is seen to hold true for a phenomenon of interest, we can claim to have
obtained some knowledge. Knowing “what”→ data. Knowing “why”→ knowledge!
A constant conjunction (correlation) of events does not qualify as knowledge. For
example, even if we find a thousand times that PV = C(T) for hydrogen, oxygen, ozone, at
100 degrees, at 1000 degrees, on top of a hill on plain ground etc., it will not qualify as
knowledge. The Kinetic Theory of Gases (KTG) articulates the mechanism why pressure (P)
is inversely proportional to volume (V) at constant temperature (T). KTG says that gas
molecules are like tiny spheres in Brownian (random) motion, constantly colliding elastically
with each other and with the walls of a container. For a given extent of kinetic energy
imparted to gas molecules (i.e. for a given temperature), if we shrink the volume of the
container to one-third, the number of collisions per unit area of wall, per unit time, trebles.
This explains why P is inversely proportional to V. Post KTG, PV = C(T) is considered
knowledge.
Later (say upon discovery of the steam engine) when people started working with
cylinders and pistons it was found that PVγ = C(T). Scientists figured that happens because
earlier there was no process for energy transfer from the gas to the surroundings and vice-
versa. For example, work is done to push back the atmosphere when a gas expands in a
cylinder, pushing out the piston. Once scientists incorporated energy transfer processes to
update KTG, PVγ = C(T) could be explained and got the status of knowledge14.
What do managers have to learn from above? Managers must not confuse correlation with
causation. Managers must ask the question why, several times. Hypotheses need to be framed
and tested for confirmatory evidence or otherwise. Moreover, with passage of time, as newer
facets of phenomena come into scope, the answer to the why question will evolve as well.
Example: Leadership theories – transactional, transformational, authentic, servant etc.

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PV = C(T) continues to apply for the cases where the cylinder moves out gently, doing negligible work.