Chaos Complexity and Complex Adaptive Systems - Essay Example

 Chaos Complexity and Complex Adaptive Systems I INTRODUCTION In the arguments section, the ten strategic schools of management are described. Chaos Complexity and Complex Adaptive Systems are then discussed. The conclusion summarizes the main arguments of the essay. II ARGUMENTS STRATEGIC MANAGEMENT SCHOOLS a) The design school was founded by P Selznick. The teachers, especially of Harvard University, and the leadership aficionados intended their message to fit and the message they got thru was to think strategically. They belonged to the Prescriptive school where they espoused the theory of look before you leap. They did not analyze nor were intuitive, Their failure was due to their being too static for this era of our rapidly changing environment. b) The second school was the planning school. It was founded by I Ansoff, Their discipline had some links to urban planning, system theory & cybernetics. This school was administered and spread by professional managers, people with MBA’s staff experts (especially in finance and management) consultants & government controllers. Their intended message was to formalize. The message received by their intended listeners was to make a program and administer one. They belonged to the Prescriptive school category. Their theory states that a stitch in time saves time. Their failure was caused by their not supporting real time strategy making nor encourages creative accidents. c) Positioning school – This was founded by Sun Tzu in his literary work The Art of War. This school concentrated on economics or the industrial organization and the military history. This school was championed by consulting boutiques type of business and United States writers. They espouse the theory of analyzing things. The message that was received by their listeners was that they should calculate their every move and not concentrate on creating or committing. This theory belonged also to the Prescriptive management school of thought. Their theory was to consider only the facts of in management decision making. Their shortfall was due to their strategy being reduced to generic positions that were selected thru formalized analysis of industry. d) The Entrepreneurial school was established by J A Schump and A H Cole with collaboration from other economics faculty. Their writings were based on economics. Their intended message was to envision the future but the listeners interpreted their teachings as to centralize and hope for the best. They belonged to the second type of school called the descriptive. Their theory was to take themselves to the leader. Their failure was due to the unclear vision and they depended too much on the leader to for decision making purpose. e) The Cognitive school was established by H A Simon and J March. Their base discipline was Psychology (cognitive). This school was preached by pessimists who are psychologically bent. Their intended message was to cope with any situation or create a solution. The message that got thru to the listeners was that worry was evident in all their actions. This school was described as Descriptive. Its saying goes I will see if when I believe it. Their failure was due to the too subjective approach to strategy formulation. f) The learning school was established by LIndbio, Cyert, March, Weick, Quinn, Prahlad & Hamel. There seems to be no base discipline in this school. Chaos theory in mathematics had started here. The movers of this school were people who loved to experiment, ambiguous and adaptable to many situations like in Japan and Scandinavia They are espousing that the prefer learning but the message that reaches the listeners seems to be the movers just want a play atmosphere to abound. Their school falls under Descriptive type. Their very famous line goes if at first you don’t succeed, try and try again. Their failure seems to be that their strategic management process seems to be chaotic or in trouble. Their teachings seem chaotic.g) The power school was established by Alison, Pfeffer, Salancik & Astley. Their base discipline is political science. They are moved by people who love power, politics and conspiracy. Their intended message is promote but the message reaching across is hard. They belong to the Descriptive school. Their saying goes look out for number 1. Their shortfall is due to their focus on clash of self interests of the stakeholders. h) The Culture school concentrated on Anthropology as the base doctrine. The were championed by socially and spiritual people. Their intend message is coalesce but the message reaching the listener is to perpetuate and not change. They belong to the descriptive school. Their team song goes an apple never falls from the tree. Their utter downfall comes from being t suited to change. i) The Environment school was founded by Hannan, Freeman & the Contingency theorists. Their base discipline is biology. They are championed by ecologists, organization theorists, and splitters and positivists. Their intended message is REACT. But the message reaching the listener is capitulate the situation, Their homily is it all depends Their downfall comes from severe limitations to strategic choices. j) The configuration school as told by Chandle, McGll and others. Their intended message is integrate & transfer in. The message that gets across to the listeners is integrate, transfer. The message that gets thru is lump together the situations. This descriptive school that had its homily of the everything there is a season. Their downside is that they are divided between two approaches favoring one or the other side. The above major schools show us that their strategy in dealing with the same business situation is different and far better than the strategy that is promoted by the other schools. Chaos theory Chaos theory refers to the lack “apparent lack of order in a system that nevertheless obeys particular laws or rules; this understanding of chaos is synonymous with dynamical instability, a condition discovered by the physicist Henri Poincare in the early 20th century that refers to an inherent lack of predictability in some physical systems. The two main components of chaos theory are the ideas that systems - no matter how complex they may be - rely upon an underlying order, and that very simple or small systems and events can cause very complex behaviors or events. This latter idea is known as sensitive dependence on initial conditions, a circumstance discovered by Edward Lorenz (who is generally credited as the first experimenter in the area of chaos) in the early 1960s. When his experimental results on prediction of weather conditions did not come up with the same expected results in violation of physical laws. Lorenz, a meteorologist, coined the word chaos or unpredicatability. Poincare discovered also that some astronomical systems will have unpredictable results with the slightest errors in measurement. Butterfly effect theory according to Lorenz, states that a single butterfly flap of its wings can create many scenarios. “Although chaos is often thought to refer to randomness and lack of order, it is more accurate to think of it as an apparent randomness that results from complex systems and interactions among systems. According to James Gleick, author of Chaos : Making a New Science, chaos theory is ‘a revolution not of technology, like the laser revolution or the computer revolution, but a revolution of ideas. This revolution began with a set of ideas having to do with disorder in nature: from turbulence in fluids, to the erratic flows of epidemics, to the arrhythmic writhing of a human heart in the moments before death. It has continued with an even broader set of ideas that might be better classified under the rubric of complexity.’" http://whatis.techtarget.com/definition/0,,sid9_gci759332,00.html http://chaos.aip.org/ “Chaos theory refers to the behavior of certain systems of motion, such as ocean currents or population growth, to be especially sensitive to tiny changes in starting conditions that result in drastically different outcomes. Unlike what it implies colloquially, chaos theory doesn’t mean the world is metaphorically chaotic, nor does it refer to entropy, by which systems naturally tend toward disorder. Chaos theory relies on the uncertainty inherent in measurements, the precision of predictions, and the non-linear behavior of seemingly linear systems…. Poincaré knew that motion is deterministically described by a series of equations that can accurately predict things like where a ball will end up if it is rolled down a ramp. However, he theorized that a tiny difference in initial conditions, based on almost insignificant variations in a measurement like mass, could result in two completely different macroscopic outcomes far, far in the future. This theory was called Dynamical Instability, and later scientists confirmed the veracity of his ideas. Therefore, chaos theory studies how organized, stable systems cannot always yield meaningful predictions for a much later time, even though short-term behavior more closely follows expectations. In fact, any predictions it does yield might be so wildly divergent that they are no better than guesses. It is anti-intuitive that a more precise value would not yield a more precise output. Chaos theory is a verifiable, mathematically consistent theory that shows that sometimes increasingly precise measurements plugged into equations do not yield increasingly precise predictions, but rather such extreme diverging values that they are practically useless. Scientists hypothesize that on a macroscopic level, certain kinds of organization and consistency have only been made possible through the disorder and inconsistency of chaos theory. (http://www.wisegeek.com/what-is-chaos-theory.htm?referrer=adwords_campaign=chaostheory_ad=026191&_content_kw=what%20is%20chaos%20theory) http://www.u.arizona.edu/~lehrer/free_will/Outline_of_Hobbs.doc COMPLEXTIY Complexity theory could be seen different school of thought in its own right, having important implications for strategic planning and general organizational management. Complexity has always been a part of our environment, and therefore many scientific fields have dealt with complex systems and phenomenon. Indeed, some would say that only what is somehow complex - what displays variation without being purely chaotic - is worthy of interest. While this has led some fields to come up with specific definitions of complexity, there is a more recent movement to regroup observations from different fields in order to study complexity in itself, whether it appears in anthills, human brains, or stock markets. (Wikipedia.com) Saussure claims that words in themselves carry no meanings, but that meaning is communicated by how words (as signs) differ from others in the language (or system) (39). Derrida furthers this by saying that meaning is only held in this différence between signs, and that meaning is only found in a work through traces. As soon as a word is used in the system in a particular context, that use slightly modifies any meaning found in the system, both for the word being used and for other signs in the system. "As soon as a certain meaning is generated for a sign, it reverberates through the system" (44). (http://www.garretwilson.com/books/complexitypostmodernism.html) COMMENT: One word or action will have different meanings to every person causing the complexity in any business environment. According to the book entitled Making Things Simpler: Management in Complexity by A. Bainbridge IEE Management Professional network Compton Ave. Plymouth, Devon, Manufacturing sector in England uses declining sources from England. The manufacturing sector here seems to be unhealthy and being grouped among the sunset industries.The fall in employment in the manufacturing sector is due to the global economy. This is made possible thru improvements in productivity and increasing specialization by producers. The agricultural sector has also decreased in terms of people employed. We should not weep for those days to come back but rather move on and welcome the complex economic global environment we live in. According to P. O Neil, US secretary of State, Times Feb 5, 2002, We can improve our company profits if we improve productivity or just wait for the market to lift the prevailing market prices of goods and services affecting our company. A survey by IBM consulting group of London showed that only 2 percent of England’s manufacturing companies are world class. Another effect of complexity is the volume of data that is presented to the manager for decision making. Most of these data are time- wasting or NOISE. Only a few are value added knowledge. In the complex data that are presented to us, information is described as the data needed in decision making. In the US, Levine and Regine(1999) used their background in Psychology and Biology to try to bring order in the present complex world of work. People traditionally thought of the business world as simply cause and effect. Complexity theory looks at things as organic, non linear and holistic. A business plan is generally broken down into statements, objectives and action plan. A strategic plan is hard to implement in the long run because of the fast paced unpredictable world we live in. Complexity theory tries to break down this complex world into simple matters. Lack of vision, lack of knowledge, pressures of work and lack of leadership is often the reason why the production department and its other departments stay in the rut in the race for productivity. Our aim then is to improve the use of resources and the maximization of human capital within each organization. We must invest additional investment and hire more qualified minds to improve quality and quantity of business. Vision and Mission statements are part of the new strategic management styles. To survive in this complex business environment, we must simplify by not comparing ourselves with our competitors here and around the world. We should concentrate, rather, on how to improve our present production processes. Second, Clarity must be the name of the game. Management must communicate clearly the goals, mission and vision and the benchmarks for the different productions departments. Lastly, we must not squander our time on unproductive events. In summary, to make things better, we must see things clearly and this implies making things SIMPLE. Chaos and complexity are closely related disciplines but different. We can have complex issues in the related disciplines like  Finance -   Economics , Mathematics -    Statistics, Sociology       -   Anthropology and others. Chaos is a common determinant in the results of these related topics. Chaos more mathematical as shown in the examples above like Lorenz and Poinclare. Complexity originates from biological sciences like the different functions of the human body (hands, feet, heart, lungs, etc) that coordinate with each other so man can walk, talk, eat, laugh and play. Above theories of Chaos, Complexity and Complex Adaptive Systems are new “sciences” or more accurately a new perspective approach aimed at understanding “complex systems” . COMMENT: Chaos must be treated as normal and steps can be taken to alleviate or eliminate the confusion. COMPLEX ADAPTIVE SYSTEMS “ A system of individual agents, who have the freedom to act in ways not totally predictable and whose actions are interconnected such that one agents actions change the context for other agents. Example: business organizations. The weather causes global warming or even cooling. …..1°c…2°c….ice age; Colony of arts.” The stakeholders develop a system of when to invest and when to sell their stocks based on the rising and falling of the stock market price. Measurement analysis used is the COMPLEX ADAPTIVE SYSTEM. The economist studies and recommends economic policies to firms, the doctor studies the human body, the business analyst studies the organization etc. The complexity diagram can be understood by looking for patterns within each complexity situation. Patterns that describe the system evolutions. There is emergent order here. The operational model of the complexity paradigm is a complex adaptive system (CAS). We can see CAS application in economies, e ecologies, weather, traffic, social organizations, and cultures, to name but a few. Dooley, K. Complex Adaptive Systems: Arizona State University, 1995 (http://www.eas.asu.edu/~kdooley/casopdef.html) III CONCLUSION a) Chaos, Complexity and Complex Adaptive Systems are metaphors. They are not really sciences. They are only a small part of the science of business administration. b) Forecasting/planning difficult. (Stacey). Since chaos has been included in the computation of the prediction in a complex business environment, forecasting and planning has been upgraded to a very highly difficult level. c) Complexity challenges prescriptive models such as the ten strategic schools’ theories mentioned here. Newton stated that that absolute knowledge is the frame or backbone or axiom system of a good theory. Newton’s theory 3 century determinism was challenged this Complexity Theory. d) Principle focus is CAS and therefore CAS has to be flexible due to the changing outcomes that are caused by chaos and complexity. e) Complexity theory, however, can be criticized in many ways because complexity can be separated into portions and simplified and easily forecast the future with higher probability. f) The traditional strategic planning model is inaccurately simplistic because we have to include as factors chaos and complexity and CAS in generating our probable future outcomes. The best alternative is to combine the theories of all the ten schools and not depend on only one strategic school. REFERENCES:  Strategic management, Ten Strategic Management Schools, by Vadim Kotelnikov & Ten3 East-West.  Dent, E.,Complexity of Science, a worldwide shift, George Washington University Washington DC The article Complexity and Life by Emerence,Lawrence Erlbaum Associates, Inc.2002, Business Strategy Review Vol 15 Issue 2, Summer 2004. Business Strategy Review by Costas Markides Vol 15 Issue 2, Summer 2004 The Phenomenal Complexity Theory (PCT) by Hugo Letiche as published by Lawrence Erlbaum Assoc. Inc. 2001. This theory tells that Phenomenal complexity theory entails  Harvard Business Review on Strategies for Growth, p 132-133,Harvard Business School Press, 1998, USA  Hunger & Wheelen, Strategic Management, p 220-221,Addison Wesley Publication R Daft, Management, Dryden Press, USA 1997  Harvard Business Review on Managing Uncertainty, p. 24-27Harvard Business School Press, USA, 1999  Harrison & Enz, Hospitality Strategic management, Harrison and Enz, Wiley & Sons, USA, 2005  Harvard Business Review, on leadership,p118-119 Harvard Business School Press, USA, complexity.orcon.net.nz Randall, Folklore of Management, Wiley & Sons, USA, 1997, p 13  Dessli, G , Management, Pearson, p  Harvard Business Review on Entrepreneurship.  Harvard Business Review on Managing Value Chain, Harvard Business School Press, p. 68-69,USA, 2000  Harvard Business Review on Profit, Harvard Business School Press, p 14,USA,1999  Harvard Business Review on Change, Harvard Business School Press, p 21, USA, 1999  Harvard Business Review on Managing High Tech Industries, p 55-90,USA,1999  Massie J, Essentials of management, p 62-63, Prentice Hall, USA 1987   Harvard Business Review on Crisis Management, Breakthrought thinking.  Harvard Business Review on Corporate Strategy, p 131-138, Harvard Business School Press, USA, 1999  Smith & Higgins, Postmodernism and Popularisation: The Cultural Life of Chaos Theory. Management Centre, University of Leicester, UK.  Dent, E.,Complexity of Science, a worldwide shift, George Washington University Washington DC http://whatis.techtarget.com/definition/0,,sid9_gci759332,00.html http://chaos.aip.org/ Read More