Organizations as Complex Adaptive Systems

8/8/2019 Organizations as Complex Adaptive Systems

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Dr. Ali MostashariAssociate Professor, School of Systems and Enterprises

Director, Center for Complex Adaptive Sociotechnological Systems (COMPASS)

http://www.socio-technical.org

http://www.socio-technical.org/






Overview

• 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

Comeinto

existence

Grow

Sub-divide/Split

Mergewith

others

Evolve

AdaptFail toAdapt

Deteriorate

Die(natural,forceful)

Resurrection(Reincarnation)?

Do organizations

have a judgment

day?



Perspective I – Organizations as Holons

The Primacy of Architecture



Open Question: Why do individualsform/join/support/sustain social structures?

Family

Work Place

Friends and Peers

Economy



To Achieve Individual Needs…….



Caveat: The Social (Faustian) Bargain

Family

Work Place

Friends and Peers

Economy



Individuals, Social Groupings, Societies and

Humanity

Humanity

Society

SocialGrouping

Individual

• Human beings are socialanimals.

• Individuality is a rather a

recent phenomenon

•

Social grouping/ecosystemcan emerge starting from two

individuals

• Every social grouping has its

own architecture consisting of

values, rules (protocols) and

structural configuration

(power relations/hierarchy)



Individuals, Social Groupings, Societies and

Humanity• Social groupings develop

a life of their own, with

emergent goals and

behaviors that are not thesum of individual goals and

behaviors

• Organizations/Enterprises

are one type of social

grouping with explicit (andmany implicit) values,

protocols and structural

configurations

Humanity

Society

SocialGrouping

Individual



Holons•

The concept “Holon" wasintroduced 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, onwhich the holons form the nodes;

the branching lines represent the

channels of communication and

control

The number of levels which a hierarchy

comprises is a measure of its "depth", and the

number of holons on any given level is called

its "span" (Herbert Simon)





Some Holonic Principles (Continued)

3. Holons are self-regulating open systems

which display both the autonomous

properties of wholes and the dependent

properties of parts. This dichotomy is present

on every level of every type of hierarchic

organization, and is referred to as the "Janus

phenomenon"4. Individuals, families, tribes, nations are social

holons







Organizations as Social Holons

Extended Enterprise

Enterprise

Organizational Divisions

Departments

Teams

Individuals

• Every level of the

organization has the dual

tendency to preserve and

assert its individuality as aquasi-autonomous whole

and to function as an

integrated part of an

(existing or evolving)

larger whole.



Organizations as Social Holons

Extended Enterprise:

Enterprise

Divisions

Departments

Teams

Individuals

• 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, the INT

tendencies of its partness



Holonic Stability

• The stability of holons and holarchies stems fromholons being self-reliant units, which have a degree of independence and handle circumstances and problems

on their particular level of existence without askinghigher level holons for assistance

• Holons can also receive instruction from and, to acertain extent, be controlled by higher level holons

• The self-reliant characteristic ensures that holons are

stable, able to survive disturbances• The subordination to higher level holons ensures the

effective operation of the larger whole.

What is a good example of an organizational structure

with strong holonic stability?



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.

• Information flows bi-directionally between smaller and larger

systems

• When the bi-directionality of information flow and

understanding of role is compromised, for whatever reason,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



Holonic Organization Summary

• Holons are an interesting way to look atorganizations

•

Shed light on many interesting organizationaldynamics

• Currently no authoritative methodology to doholonic modeling of organizations although

efforts under way (combination of socialnetwork analysis, and agent-based modeling)



Perspective II – Organizations as Social Networks

The Primacy of Connections



Organizations as Scale-free Networks

• Organizations can bethought of as a scale-freesocial networks in whichmember individuals areconnected to each otherbased on their socialstatus and interactioncapacity

•Scale-free networks showa power law degreedistribution which is seenin many real networks





Preferential Attachment

• PA is a class of processes in which some quantity, typicallysome form of wealth, credit or connection, is distributedamong a number of individuals or objects according to howmuch they already have, so that those who are already

wealthy receive more than those who are not.• Also called the Matthew effect (For unto every one that

hath shall be given, and he shall have abundance: but fromhim that hath not shall be taken away even that which hehath —Matthew 25:29, King James Version)

• Can be observed in financial systems, academic citations aswell as in social networks

• Makes growth dynamics of networks path dependent

• What does this say about equal opportunity and fairness?



The Importance of Power Laws in Social

Networks

• Most social networks have power -law linkdistributions, containing a few nodes whichhave a very high degree and many with low

degree

• In many cases a good rule of thumb is the80/20 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

• The power law distribution highly influences the networktopology

• 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 arethose with small degree, the likelihood that a hub would beaffected is almost negligible.

• Even if such event occurs, the network will not lose itsconnectedness, which is guaranteed by the remaining hubs.

•On the other hand, if we choose a few major hubs and take themout of the network, it simply falls apart and is turned into a set of rather isolated networks.

• Thus hubs are both the strength of scale-free networks and theirAchilles' heel.

• Think Terrorist Cells



Small World Networks: 6 Degrees of Separation

• The small world experiment comprised severalexperiments conducted by Stanley Milgramexamining the average path length for social

networks of people in the United States.

• The research was groundbreaking in that itsuggested 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 movementyou might have to create several small onesSource: The Tipping Point (Gladwell)



Different Roles for in Complex

Organizational Networks• Connectors

– 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



Social Networks Summary

• Understanding organizational networks and theconnectedness of individuals key to analyzing anenterprise or an extended enterprise.

• Hubs, preferential attachment, small worldphenomenon and tipping point key to networkbehavior

• 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



Causation, Feedback Loops, and Chaos

Theory• It is not useful to understand human behavior

through searching for linear, one-directional cause-effect relationships.

•It serves little purpose to ask “why” persons do whatthey do.

• A more useful inquiry is “how” or in what waysomething happened.

•

“A interacts with B to produce AB, which changesboth A and B, and results in C, which is partly A, B,and AB.”





Policy Resistance

• Complex systems and organizations show

Policy Resistance

• That means when you try to take them frompoint 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

A B

Desired Path

C

Actual Path





Conclusion

• There are many different perspectives in looking atorganizations, we presented three where architecture,networks and dynamics were critical points of departure

• When looking at a complex organization, we need tounderstand that it is dynamic, with hidden“architectural” aspects and with counter intuitivebehavior

• In other words it takes a life of its own• As such we might be able to influence organizational

architecture, but we cannot “architect” and enterprise

Documents

Organizations as Complex Adaptive Systems