Applying complexity theory to the strategic development of an organisation
How useful is complexity theory for describing the strategic development of an organisation? I begin by using Whittington’s framework to give an overview of mainstream strategy literature. I highlight some of the shortcomings in current approaches to strategy and suggest that a new approach is needed. Complexity theory is offered as a new approach. I examine the complexity theory literature. I discuss rules based and connectionist approaches to complexity theory and the use of complexity theory concepts as metaphors. The complexity theory concepts of sensitivity to initial conditions, disequilibrium, positive and negative feedback and emergence of order are identified. Shortcomings in using the theory to describe a social system are then given. I examine the research paradigms open to researchers and conclude that to apply complexity theory to a social system, research within a phenomenological paradigm is required. I present an three and a half year ethnographic study of AYTAG, a public sector regulatory organisation. I use narrative to describe its development in terms of complexity theory concepts. The organisation set out to become flexible and flat structured, with multiskilled professionals and a strong centre to drive it forward. What emerged was an hierarchical organisation with powerful operational departments, a weak centre and a traditionally skilled workforce. AYTAG retained its primary role of regulator but failed to promote its influencing role. I found that order emerged at the boundary between the organisation’s legitimate and shadow systems. The underlying dynamic which led to the order that emerged was the need to reduce anxiety. I examine the usefulness of each complexity theory concept to our understanding of the development of AYTAG. I describe the difficulties involved in determining the exact nature of initial conditions in social systems and the need to consider disequilibrium as a social state rather than a particular action or event. In particular I highlight the use of the concept of feedback as an interesting avenue for studying organisations. I examine the nature of feedback processes at the level of organisation and at individual system level. I describe the interplay between them and its effect on the order emerging in AYTAG. I draw attention to some of the difficulties I found in applying complexity theory concepts to a social system, such establishing precise definitions of the different concepts.