Short review of complex thingking, early management approaches to deal with fast changing situations

S. Mandorf

Research output: Book/ReportReportAcademic


This report shows famous management approaches that deal with the complexity of the company’s situation. Not only the environment but also the company’s structures show a rising complexity. Economists and businessmen try to manage that complexity since several years. For example they reduced it for easier analysis, but this way many important relationships of the processes were left unconsidered and some of the recommendations could be wrong. To avoid the destruction of important relationships some economists tried to keep complexity. But that made analysis very complicated Some of the early approaches should be shown here to present the development of complex thinking in business management. The analysis portrays the characteristics of companies interpreted as complex systems. At first this section describes the Model of Viable Systems by Beer.1 This model compares the hierarchic structure of companies with the structures of a human body. The brain and the spinal cord have top authority in this system. They can be compared with the top management or the strategic management of a company. Brain and spinal cord are connected with organs of the human body. Those organs symbolize the company’s departments. The system is viable, when particular criterions are satisfied. One of these criterions is the main principle of self regulation by backward control. The system reacts stable to external disturbances and does not get into trouble. It keeps its state by adaptations which follow from backward controlling processes. Such adaptation processes are stimulated by disturbances. The description of self regulation in viable systems leads to a short summary of the systems theory, especially the cybernetic elements of steering and regulation. The constructive approach2 bases on a total foresight of the top management. In advance it can include reactions of the system into the plans. The limits of this approach are reached by complex systems and complex environment, because a total foresight is impossible due to the complexity of the relations. 3 In opposite to the total foresight of the constructive approach the systemic approach is based on the assumption that the relations of a complex system cannot be uncovered at all. It recommends a permanent adaptation of the system to new situations. 4 According to the holistic approach it is not enough for such an analysis to examine only parts of the system. In addition to that the interdependencies between the partsystems have to be discovered. Already in the 1970ies ANSOFF was engaged with the fundamental characteristics of interdependencies. He called the found effects: synergies. He classified the synergies into effects that reinforce each other (positive synergies), effects that hinder each other (negative synergies) and effects that are independent of each other (neutral synergies). 5 These results could be transferred to the interdependencies of companies. For example the reactions of single departments could influence each other by competition about resources (negative synergy) or by division of costs and findings of research and development (positive synergy). Besides the internal effects a company is also influenced by external forces from the environment. The environment describes the surroundings of the company. That is the superior system, where the company acts in. The limits of the surroundings blur due to system-overlapping value chains and processes. So an objective restriction of the system’s capacity is difficult. 6 The so called contingency approch assumes that companies are in a permanent process of adaptation to the changes of environment. Easy expressed: the company is finally product of its environment. 7 That is a strong simplifying of the connections, because it disputes companies’ abilities to take influence to their economic destiny. But the adaptations are undisputed facts. The phenomenon of learning considers such adaptations to the environmental changes. The system becomes a learning system that can develop its own success factors and ability for self regulation by its broad knowledge base and collected experiences about methods and reactions of the system. 8 So you are back to the beginning and the self regulation in the viable systems by Beer. Due to the learning a system becomes adaptable and viable.
Original languageEnglish
Place of PublicationMunich
PublisherGrin Academic Publishing House
Number of pages54
ISBN (Print)978-3-640-29258-5
Publication statusPublished - 2009

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