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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
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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
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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?
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Perspective I – Organizations as Holons
The Primacy of Architecture
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Open Question: Why do individualsform/join/support/sustain social structures?
Family
Work Place
Friends and Peers
Economy
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To Achieve Individual Needs…….
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Caveat: The Social (Faustian) Bargain
Family
Work Place
Friends and Peers
Economy
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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)
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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
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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)
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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
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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.
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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
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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?
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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
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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)
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Perspective II – Organizations as Social Networks
The Primacy of Connections
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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
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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?
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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
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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
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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“
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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)
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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
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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
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Perspective III – Organizations as Dynamic Systems
The Primacy of Feedback
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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.”
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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
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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