Management Decision

The state we are in: insights from autopoiesis and complexity theory
Amanda Gregory,
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MD
44,7 The state we are in: insights from
autopoiesis and complexity
theory
962
Amanda Gregory
Centre for Systems Studies, Hull University Business School, Hull, UK

Abstract
Purpose – Following Polanyi, this paper aims to suggest that the Industrial Revolution marked a
break-point between pre-industrial society (characterised by integration) and industrial society
(characterised by differentiation).
Design/methodology/approach – As a conceptual paper, the focus is on drawing out the
implications of Luhmann’s application of the theory of autopoiesis to industrial society. This
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discussion leads to critical reflection on the state we are in and the active role we can each play in
bringing about change.
Findings – Differentiation, without an overall co-ordination and control function within society, has
led to the sub-systems (and organisations) becoming self-serving or pathologically autopoietic. Society
has a capacity for self-observation, through such mediums as the mass media. Alarm at the apparent
increasing rate of change in both social and ecological systems reported by the mass media appears to
be drawing us towards a second break-point. The outcome of this revolution, should it come about, is
impossible to predict but descent into a new “dark age” is an option as is the re-integration of economic
activity with social, religious and political functions. Luhmann’s autopoiesis provides a convincing
explanation for how society is structured and observing the implications of this. The role of the mass
media as an observing system and in bringing information about change to society’s attention is
emphasised.
Practical implications – The paper seeks to provide an explanation for how society is structured
and demonstrate how society appears to be passively observing the implications of this. Proposals for
both restructuring and the actions we, as active citizens and organisational members, can take to
redress our current state are advanced.
Originality/value – The paper brings together ideas from a diverse range of fields (including
autopoiesis, complexity theory, and systems) and applies them to a highly significant topic.
Keywords Complexity theory, Systems theory, Change management
Paper type Conceptual paper

Management Decision
Vol. 44 No. 7, 2006
pp. 962-972
q Emerald Group Publishing Limited
0025-1747
DOI 10.1108/00251740610680613
Introduction
Following Polanyi, the argument is discussed in this paper that the industrial
revolution marked a break-point point from pre-industrial society (characterised by the
integration of economic activity with social, religious and political functions) to
industrial society (characterised by the differentiation of economic and other functions
into separate sub-systems). This differentiation, without an overall co-ordination and
control function within society, has led to sub-systems (and organisations) becoming
self-serving or pathologically autopoietic. We have created organisations that appear
An earlier version of this paper was presented at the European Meeting on Cybernetics and
Systems, Vienna, April 2006.
 intent on destroying the social and natural systems that sustain us and, more than this, The state
they appear to be beyond our control. we are in
Society has a capacity for self-observation, through such mediums as the mass
media, and appears to be aware of and alarmed at its own recent history. Alarm at the
apparent increasing rate of change in both social and ecological systems appears to be
drawing us towards a second break-point. The outcome of this revolution, should it
come about, is impossible to predict, but it is worth remembering that we are not mere 963
observers as each of us will play a part in bringing this change about and deciding
where it will lead: to descend into a new “dark age” is an option as is the re-integration
of economic activity with social, religious and political functions.

The first bifurcation point: the industrial revolution

According to Swedberg and Granovetter (2001), in the 1950s Karl Polanyi addressed
the application of economic theory to preindustrial and industrial society and, in so
doing, established that the industrial revolution marked a distinct break-point in social
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history. Such a distinct point of change may be seen to represent a bifurcation point. In
a system that is at equilibrium or near equilibrium, there exists a steady state that is
dependent on the value of certain control parameters. If the value of these parameters is
exceeded, for example through an inflow of energy, behaviours are disrupted and a
cycle of positive feedback may be initiated which further amplifies the effects of the
surge in energy throughout the system. Consequently, the behaviour of the system
grows increasingly erratic as the system moves far-from-equilibrium until the
threshold of stability is reached which is marked by a bifurcation point. At a
bifurcation point the nature of the whole system may change. According to Prigogine
and Stengers (1984, p. 12):
[. . .] far from equilibrium, new types of structures may originate spontaneously. In
far-from-equilibrium conditions we may have transformation from disorder, from thermal
chaos, into order. New dynamic states of matter may originate states that reflect the
interaction of a given system with its surroundings. We have called these new structures
dissipative structures to emphasize the constructive role of dissipative processes in their
formation.
At the point of change, or the bifurcation point, the system may have several different
paths open to it; the choice of path is essentially random and therefore unpredictable.
Thus, “The indeterminacy at the bifurcation points and the ‘chaos-type’ unpredictably
due to repeated iterations both imply that the behaviour of a dissipative structure can
be predicted only over a short time span. After that, the system’s trajectory eludes us”
(Capra, 1996, p.178). This pattern of behaviour is clearly reflected in recent
socio-economic history and, having discussed the change from pre-industrial to
industrial society, in the following section the steady state represented by industrial
society will be addressed.

Industrial society: a system near equilibrium

Industrial society is characterised by the separation of society into a range of
functional sub-systems. Luhmann looks at society as closely approximating a
self-producing or autopoietic system that is comprised of six subsystems: the economy,
politics, the law, science, religion and education (Rempel, 1996). The education system
 MD is treated as a special case as through it pupils may learn about the other subsystems
44,7 such as the law, the economy, etc. The education subsystem though cannot instruct
pupils in everything, hence choices have to be made about knowledge prioritisation
and outside forces originating in other sub-systems are likely to make this choice.
Hence each sub-system, except education, is itself autopoietic and each is environment
to the others.
964 The theory of autopoiesis evolved from Maturana and Varela’s (1980) exploration of
what distinguishes living systems from non-living and how living systems persist
despite changes in structure and components. In summary, an autopoietic systems
approach focuses on:
.
autonomy realised through the process of self-production;
.
production of feasible responses to perturbations;
.
structural coupling between systems; and
. how systems persist and maintain an identity despite changes in components
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and structure.

Figure 1 serves to demonstrate the above key features of an autopoietic system. In

particular, this figure emphasises that:
.
The self-produced nature of the component parts serves to clearly differentiate
the system from its environment (in contrast, from an open systems view where
the boundary lies is determined through a subjective judgment about the
richness of interactions between components).
.
Structural coupling through repeated perturbations or “irritation” between
systems (in contrast, from an open systems view there is a more tit-for-tat like
adaptation between systems).

The application of autopoiesis in the social domain has always been a contentious
issue; Maturana has expressed extreme reservations about its applicability (Maturana
and Poerksen, 2004) and a summary review of the literature reveals that theorists have

Figure 1.
A representation of an
autopoietic system
 adopted different stances (see for example, Gomez and Probst (1989), Robb (1989a, b), The state
Mingers (1989)). Each approach appears to be distinguishable from the others on the we are in
basis of what is taken to constitute the component parts of the system. In his most
famous working of autopoietic theory, Luhmann (1995) viewed communications as the
elements of reproduction of society’s sub-systems and later he viewed decisions as the
elements of reproduction of organisations (Hernes and Bakken, 2003, referring to
Luhmann, 2000). Decisions are communicated through a form of communication that is 965
specific to that sub-system. By way of example, Rempel (1996, p. 62) states “economic
decisions communicate through assertions of money, while scientific decisions
communicate through assertions of truth (or at least truth claims)”. When Luhmann
uses the term “communication” he is not referring to the ongoing chatter that takes
place between individuals in the organisational context since this is relegated to the
realm of environment. Drawing on Shannon and Weaver, Luhmann (1995) regards
communication as comprising of: information (what the message is about), utterance
(form in which the communication is expressed) and understanding (meaning that the
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communication creates).
It is through the system’s continuous creation of communications that it
distinguishes itself from its environment. Beyes (2005, p. 455) illustrates how
organisations are created through decisions in stating “organizational leadership is
regarded as a kind of ‘helpmate’ for the organization’s reproduction, untiringly
producing communications, i.e. decisions, that keep the system running.”. In goal terms
then, maintenance of the autopoietic processes is the prime objective of the system and
all other objectives are subordinate to it. Maturana (1975, p. 313) states “. . . everything
that takes place in an autopoietic systems is subordinated to the realization of its
autopoiesis . . . ”.
Controversially, it has been suggested (Vanderstraeten, 2005) that there is a tension
within the theory of autopoiesis between the notions of self-production and the closure
of the system with the coupling of the system to its environment. The autopoietic
system is neither determined by its environment nor its internal operations alone – it is
a product of the interaction of the two. Maturana and Varela (1987) refer to this
relationship of mutual perturbation as structural coupling thus:
[. . .] the structure of the environment only triggers structural changes in the autopoietic
unities (it does not specify or direct them), and vice versa for the environment. The result will
be a history of mutual congruent structural changes [. . .] there will be a structural coupling.
The notion of structural coupling represents an important point of departure from the
traditional organic view that regards systems as being environmentally determined
and stresses the importance of boundary management. From an autopoietic stance, a
system responds to an environmental perturbation by producing a feasible set of
responses (communications/decisions) that are also consistent with its own prior
responses (communications/decisions). According to Bailey (2005), Luhmann
“expanded the traditional model by recognizing that not only do holistic systems
interact with their environment but also that their internal system components can
have their own independent interactions with the environment.”. Hence Luhmann
appears to have made an important shift away from an internal focus on managing the
 MD external environment to emphasising the potential for couplings between the
44,7 environment, systems and their component parts.
The notion of structural-coupling should not be taken to suggest that the
system-environment relationship is an easy one though as society is constantly seeking
to control its environment. In order to achieve control society must possess as much
complexity, measured in terms of the number of different states that can be discerned
966 or, to use the technical term, its variety, as the environment that it is seeking to control
(Ashby’s Law of Requisite Variety). In order to increase its variety vis-à-vis the
environment, society must employ strategies to amplify its own variety and attenuate
that of the environment. According to Hernes and Bakken (2003, p. 1512), Luhmann’s
recognition that society needed to employ such strategies served to mark “a correction
of Parsonian structural functionalist theory”. For Parsons’ separation of specialist
functions within society introduced the problem of integration whereas, from
Luhmann’s perspective, the problem is one of there being a lack of differentiation
(Rempel, 1996, p. 59). Any overlap between systems would mean that they were not
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sufficiently differentiated from their environment and vulnerable to being overcome by

environmental complexity. However, Vanderstraeten (2005) warns that:
In important regards, the current form of functional differentiation narrows society’s
attention span. Because every function system is solely and completely responsible for its
own function, it tends to observe its environment only in as far as this environment is
relevant within its programmatic perspective.
A further attenuation strategy is that of the different sub-systems adopting their own
exclusive medium of communication but this means that they cannot easily talk to one
another or talk past one another. A good example of this is the interaction between the
economic and the legal system with respect to corporate governance issues (for a
specific instance of this see The Guardian (2005) article “Anger as firms fined £13.5m
for Hatfield”). Hence a consequence of the maintenance of sub-system specific
communications is that “no two frame reality alike” (Rempel, 1996, p. 60) and what is
regarded as important by one sub-system may not be by another.
According to Vanderstraeten (2005), it is important that society becomes aware of the
way it engineers environmental complexity and the potential danger that arises from the
amplification and attenuation strategies in its arsenal. Beer (1985) counsels that each
variety amplification/attenuation strategy introduces potential danger and it should be
remembered that the worst variety attenuator is pure ignorance. The mass media plays
an important role in thwarting ignorance and enabling society to observe itself.
Luhmann (2000) states, “Whatever we know about our society, or indeed about the world
in which we live, we know through the mass media”. However, Vanderstraeten (2005)
advises “Judged from the rise of interest in ecological issues (e.g. in the mass media, in
the new social movements), our society is currently alarming itself.”. This interest should
not simply be taken to mean that things are getting worse for Vanderstraeten (2005)
rightly points out degradation of the ecological system is not an entirely new problem
and it is important to recognise that there are sceptical environmentalists, such as
Lomborg (2001), who adopt a more optimistic view of the state of the world. Could it be
that the state of the world has not really changed that much but the ability and intensity
with which society observes itself and its effects has? News of catastrophe and crisis in
 far away lands would once have come via the written or spoken word and weeks after The state
the event but today it is beamed, in some cases with compelling visual impact as events we are in
actually happen, directly into our living rooms.
The media is happy to satisfy our demands for big news and it would seem that fact
is often stranger and more dramatic than fiction (see for example, The Corporation, and
Michael Moore’s work). It might be argued that the mass media serves its own interests
and plays an active role in creating big news but Luhmann insists on “the innocence 967
and harmlessness of the mass media”. If the mass media merely serves our constant
need for information then it would seem wise to acknowledge that there are different,
contradictory, perspectives on the state of the world and to take a prudent view.
Autopoietic systems are predisposed to looking after their own interests but when
this is to the cost of the environment that sustains them then they are said to have
become self-serving or pathologically autopoietic (Beer, 1985). To avoid this, it might
seem reasonable that there should be some kind of co-ordinating and control function
to balance the demands of the different sub-systems and punish those that err towards
pathological behaviours. But, as Vanderstraeten (2005) recognises, “In modern society,
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there is no supervising reason, no centre, no apex that would allow steering of the
development of society and its connections with the environment”.
Even if there were such a guiding mechanism capable of steering such complex
systems, for sure its attempts to regulate societal sub-systems and organisations would
compromise their autopoiesis and hence meet with resistance. Chapman (2004, p. 53)
views this resistance in terms of resilience, thus “the resistance to change exhibited by
many organisations is not because of bloody-mindedness on the part of the individuals
involved, although that may be a contributing factor. The resistance to change is
actually a measure of an organisation’s ability to adapt; it is a measure of its resilience”
(p. 53). Given the resilience of such systems, the important question is whether this is
desirable or not. It should not be assumed that all theorists who have argued for the
existence of the autopoietic organisation are claiming that the existence of such
organisations is desirable. According to Beer (1975, quoted by Mingers, 1989, p. 172):
[. . .] any cohesive social institution is an autopoietic system – because it survives, because its
methods of survival answer the autopoietic criteria, and because it may well change its entire
appearance and its apparent purpose in the process.
This ability to persist despite, as Mingers (1989, p. 172) puts it, “. . . deliberate and
sustained attempts to destroy them . . . ” surely introduces doubt about whether or not
such organisations can be managed or directed. Indeed, Robb (1989b, p. 348) declares
that:
To those who would see the achievement of autopoietic organization as a desirable objective
in organizing, I warn that such an aim may result ultimately in the subordination of all
human aspirations and ambitions, values, and welfare to the service of preserving the unity of
such systems, and not to any human end. Once formed such organizations appear to be
beyond human control, indeed to be real-world systems.
Robb (1989a, p. 250) sounded an early warning signal stating that:
The received wisdom (e.g. Peters and Waterman, 1982) that we shall always be able to make
interventions which will loosen up organisations and induce cultural changes so as to direct
the organisations activities to serving human purposes is very much open to question.
 MD We have reached an important point in this paper. It has been argued that the mass
44,7 media holds us in a state of collective paralysis as we fearfully watch catastrophe and
crisis unfold. The scale of such disasters creates a sense of individual impotence.
Ironically, given the apparent increasing frequency and scale of such events, for many
of us the impact on our daily lives is negligible. Critically, whether it is desirable or
possible for us to introduce a co-ordination and control function to mediate between the
968 different sub-systems within society, and change the way our organisations operate is
questionable.
In the following section, the argument will be advanced that we are approaching a
second bifurcation point and the changes that it will bring may be as far reaching as
those resulting from the industrial revolution.

Approaching the second bifurcation point: the values revolution

Zadek (2004) recognises that societal views, particularly with regards to corporate
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social responsibility, do not remain static. Pressure on sub-systems and the

organisations of which they are composed to act in the light of the society’s evolving
ideas might be regarded to be an environmental perturbation. From Luhmann’s
perspective such a perturbation would only be picked up by organisations in terms of
the effect on its discretion to make decisions that are both socially acceptable and in the
system’s interests. This reflects Zadek’s view that organisations learn how to adapt
their business model to social pressures to ensure competitive advantage and financial
viability; ethical business practice being a means to an ends rather than an end in itself.
Von Foerster (1992), following Wittgenstein, reflects this view thus:
It is clear, however, that ethics has nothing to do with punishment and reward in the usual
sense of the terms. Nevertheless, there must indeed be some kind of ethical reward and
punishment, but they must reside in the action itself.
In the light of popular interest in corporate governance and corporate social
responsibility, organisations that only adopt a responsible stance if it pays seem to be
dangerously behind the times. How can it be that there appears to be an increasing
divergence between the expression of personal and professional values? According to
Vanderstraeten (2005), following Luhmann, this comes about because human beings
are not considered to be the parts of the autopoietic systems under consideration, hence
“the sharp distinction between social systems and their environment offers the
possibility of conceiving of human beings in a way that is both more complex and less
restricting than if they had to be interpreted as parts of the social order. Because they
are part of the environment of the societal system, human beings are conceded greater
freedom (greater complexity) than social roles, norms and structures would allow.”.
We are increasingly encouraged to question our personal values but we appear to
set this ability and these values aside once inside organisations with the imposition of a
professional set of values that may contradict our personal ones. As Pheby (1997, p. 81)
reflects:
. . . morality . . . is typically expressed as a set of external requirements to which the
individual must conform. It is these notions of externality and alienation vis-à-vis moral
responsibility which must be overcome.
 These notions of externality and alienation clearly reflect the de-centring of the The state
individual within organisations and Hernes and Bakken (2003, p. 1522) see this we are in
demonstrated in Luhmann’s work as “the system’s autopoiesis may be seen as separate
from the people involved. If anything, the individual is part of the environment of the
system”. According to Hernes and Bakken, this de-centring of the individual is also
reflected in the work of Habermas, who regards individuals as not acting within
organisations but rather functioning, and Giddens, who recognises that “a given state 969
of the system may not be traced to the intentions of actors”.
Having recognised this divergence between societal/personal and
organisational/professional values, attention will now be turned to the potential
consequences. Kim (2005) refers to such a state of divergence as arising from a
retardation of the evolution process. Drawing on March and Olsen, Kim (2005) argues
that “retardation is a kind of asynchronicity problem in the sense that the change of the
institution lags behind change in the system. Finally, such asynchronicity may develop
to a change that, in terms of direction, scope and magnitude, proves to be entirely
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unpredictable”. Such a change may be said to represent a bifurcation point. Should such
change come about, we do not know where it will lead but, perhaps, there are clues.

Where do we go from here?

Rempel seeks to replace the notion of autopoiesis with interpenetration based on
Luhmann’s own discussion of the education system. Interpenetration means that a system
is open to infiltration from other systems. Rempel recognises that interpenetration opens
up the possibility for a theory which emphasises inter-dependence and
inter-communication. The challenge here is to imagine a different kind of organisation.
Miller and Skidmore (2004) call for organisations to “loosen up and disorganise”.
Such loosening up may be facilitated through the emergence of faith-based and
values-led organisations (Skidmore and Harkin, 2003). Faith-based and values-led
organisations are strongly oriented toward the perpetuation and realisation of
members’ values, much like the family in pre-industrial society. Such organisations
may lead to interesting lessons about management. For example, do managers in
faith-based and values-led organisations need to focus on control and the management
of change when they can trust members to act in the interests of the whole?
However, the creation of such “loose” organisations may come at a cost. As
Vanderstraeten (2005) warns:
Modern society mainly reacts to environmental problems through its functional systems. Its
renouncement of redundancy conditions the way it is able to observe and react to
environmental dangers. These structural barriers and limitations cannot be removed if we do
not want to give up the advantages of modern society.
The prudent environmentalist might warn that the advantages of modern society are
problematic as they come at a cost. We may be part of the problem but we are also part
of the solution (Checkland, 1981). We will determine where we go; we are not victims in
this. Descent into a new dark age is also an option.
Assuming that interpenetration is the more attractive option, how can we as active
citizens and members of organisations, seek to bring it about? It is here proposed that it
requires us to:
 MD .
be aware of the temporary nature of society’s current structural arrangements
44,7 and the strategies that are employed within societal sub-systems and
organisations to engineer variety and manage complexity;
.
question the necessity of functional differentiation and the “progress” that it
brings;
.
refuse to separate our personal and professional values;
970
.
imagine organisations as places in which we can pursue our personal values and
seek opportunities for their realisation; and
.
recognise the mass media’s role in bringing us to a state of alarm and question its
own autopoietic tendencies.

Taken together, the above-suggested changes may not seem remarkable nor, in the
light of recent catastrophe and crises, sufficient but a cycle of positive feedback may be
initiated which serves to amplify further their effects throughout our social and
ecological systems. Resistance to such changes is inevitable particularly, as has been
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discussed in this paper, as it is actually a measure of resilience. Future research may

well focus on organisational resilience particularly as this notion represents an
important point of departure from the traditional organic systems view.

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Further reading
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review of the empirical research”, Psychological Bulletin, Vol. 84 No. 5, pp. 888-918.
Electronic Book Review (2006), “A review of the Reality of the Mass Media”, 1 April, available
at:.www.electronicbookreview.com/thread/criticalecologies/polycontextra
Hofstede, G.H. (1991), Cultures and Organisations: Cultures of the Mind, McGraw-Hill, London.
Mingers, J. (1995), Self-producing Systems: Implications and Applications of Autopoiesis, Plenum,
London.
Schlebe, K.E. (1970), Beliefs and Values, Holt Reinhart and Winston, New York, NY.
 MD Senge, P.M. (1990), The Fifth Discipline: The Art and Practice of the Learning Organization,
Century Business, London.
44,7
About the author
Amanda Gregory is Head of the Management Systems Subject Group in the Business School,
University of Hull. Amanda’s current research interests relate to the use of systems ideas to
972 enhance decision-making and evaluation. As regards project work, Amanda has focused on
evaluation in the voluntary sector and the facilitation of community initiatives. She has been
involved in a variety of projects including the facilitation of the decision making processes of a
multi-agency working party, the evaluation of a student mentoring scheme and the appraisal of a
community business initiative. She is Deputy Editor of Systems Research and Behavioral Science,
the official journal of the International Federation for Systems Research. Amanda Gregory can
be contacted at: a.j.gregory@hull.ac.uk
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