Complexity theory and organizations

Complexity theory and organizations, also called complexity strategy or complex adaptive organizations, is the use of the study of complexity systems in the field of strategic management and organizational studies.

Complexity theory is an interdisciplinary theory that grew out of systems theory in the 1960s. It draws from research in the natural sciences that examines uncertainty and non-linearity. Complexity theory emphasizes interactions and the accompanying feedback loops that constantly change systems. While it proposes that systems are unpredictable, they are also constrained by order-generating rules.

Complexity theory has been used in the fields of strategic management and organizational studies. Application areas include understanding how organizations or firms to their environments and how they cope with conditions of uncertainty. The theory treats organizations and firms as collections of strategies and structures. The structure is complex; in that they are dynamic networks of interactions, and their relationships are not aggregations of the individual static entities. They are adaptive; in that the individual and collective behavior mutate and self-organize corresponding to a change-initiating micro-event or collection of events.

In the early 20th century, organizational thinking primarily saw organizations as a machine, which meant large amounts of bureaucracy, hierarchy, and standardization. An organization was a determinist, closed system. This approach was rejected In the mid-1900s, as organizations became to be seen as dynamic systems in constant states of change.

From the 1950s to the 1980s, the dominant approach to organizational change was the planned approach. This focus tried to improve organizations by looking at operational practices and effectiveness through wide, participative change moments. Change was a process that organizations would deal with incrementally by focusing on one problem or goal at a time.

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