Organizational responses to complexity: the effect on organizational performance

Abstract

This paper uses a complex adaptive systems view to examine two different organizational responses to turbulent, complex environments. We examined the internal make‐up of eight organizations that saw their environment the same way – as rapidly changing, complex and requiring aggressive change strategies. Half of these organizations chose a complexity absorption response to environmental turbulence, and half chose a complexity reduction response to environmental turbulence and complexity. The organizations pursuing a complexity absorption response outperformed those organizations with complexity reduction responses.

Complexity absorption: a processual strategic approach to corporate entrepreneurship strategy

“…The paper contributes to both entrepreneurial strategy literature and complexity literature in the following ways: First, complexity theory offer an insightful perspective to study organizational responses to the complex environment (e.g., Ashmos et al, 1996;Ashmos et al, 2000;Boisot and Child, 1999;Brown and Eisenhardt, 1997;McDaniel, 1997;Stacey, 1995;Wheatley, 1992;Walters and Bhuian, 2004). Complexity reduction and complexity absorption approaches provide a pair of concepts that allow us to rethink the relationship between different information/management control approaches.…”

“…Developed during a period of comparatively stable economic development, the dominant theories of organizations tend to have been founded with the dual objectives of maintaining equilibrium and avoiding uncertainty (Hamel, 2000). The application of complexity theory to organization studies in highly complex environments offers unique insights (e.g., Ashmos et al, 1996;Ashmos et al, 2000;Boisot & Child, 1999;Brown & Eisenhardt, 1997;McDaniel, 1997;Stacey, 1995;Wheatley, 1992;Walters & Bhuian, 2004).…”

The Impact of Organizational Goal Setting on the Industrial Munificence-Goal Attainment Relationship

“…The complexity in organizational systems is often conceptualized in terms of how differentiated their structures are or how numerous their tasks are (Blau & McKinley, 1979). Of particular interest to complexity researchers who study organizations is the relationship between organizational performance and the complexity of distinct activities and subsystems within organizations (Anderson, 1999;Ashmos, 1996Ashmos, , 2000Boisot & Child, 1999;Daft, 1992). The rationale behind organizational complexity theory is that the more complex an organization is, the more potential options the organization has and thus the more flexible it is.…”

The Triple Standard In Healthcare

“…In the medical world, it is widely acknowledged that decisions should be based on scientific evidence (Berwick, Godfrey, and Roessner 1990;Bryan-Brown and Dracup 2001;McIntyre and Popper 1989). For managers, this professional expectation is beginning to surface (Shortell, Zazzali, Burns, et al 2001;Waldman and McCullough 2002), but the scope and depth of specific policies are poorly defined, and still rarely implemented with consistency or rigor (Ashmos and McDaniel 1996;Ashmos, Duchon, and McDaniel 2000;Kissick 1995;McDaniel and Driebe 2001).…”

“…Ambiguity and complexity are inherent in our modern world. There are many effective approaches to dealing with complexity but managers must first learn to embrace complexity rather than ignore or seek to reduce it (Ashmos, Duchon, and McDaniel 2000;McDaniel and Driebe 2001;Sterman 2006). Russell Ackoff has repeatedly emphasized that, "managers and implementers were part of the problem, not external to it" (italics per author) (Ackoff 1999).…”