Complexity Perspective - How Strategy Develops Its Impacts on Routines and Micro Structures - Essay Example

Strategy Student’s Name Course Professor Date Table of Contents Table of Contents 2 Introduction 3 Complexity perspective 3 Complex adaptive system 6 The practice perspective 9 Impact on leadership 11 Conclusion 13 References 14 Introduction The conceptualization of the term strategy in business context can contribute a lot to understanding the facets of a strategy; what strategy is and how it works. Every organization with a vision must have a plan of action that details the substitutes that will contribute to the achievement of a particular goal. Jarzabkowski et al, (2007) claimed that, “a strategy is not something that an organization has but something its members do”. The claim emphasizes on the centrality of workforce for the success of a designed action in an organization. The claim is true as it contends with top-down vision and control that does not foster distributed intelligence and emergent self-organization. This research attempts to critically appraise the claim by alluding to multiple theories that focus on strategy. By looking at different theories, the discussion concludes that, people are significant strategic agents in any organization and the role of a leader should be to support members to continuously formulate and align themselves for the success of any strategy. Complexity perspective Complexity perspective revolves around the resources required for a strategy to solve a given problem and attain its objectives. Major organizations like Apple are distinguished by how they handle their key strategies such as branding, marketing and so on. According to McKelvey (2010, 7) complexity is driven by four driving forces. First, it starts with adaptive tension whereby, workforce naturally develops adaptive behaviours due to tensions in the organization. A tension is a phase of transition that energizes and ignites individuals and groups to adapt in order to work effectively in a particular organization. For instance, the growth of GE’s market value for mere $12 billion to $400 billion is attributed to how Welch created tension by demanding that each division in the organization hold number 1 or 2 position in it industry. In turn, employees would be grades in level As, Bs and Cs with those in category Cs fired. Eventually employees worked had to learn to work effectively in such an environment (McKelvey, 201, 13). In lay man’s language, adaptive tension reflects organizational design where the leader is determined to come up with a design and structure that will deliver a certain strategy. In turn, the organization becomes fit for a certain strategy and business model. In most cases, this would involve diversification of roles in case they are concentrated to a particular department. For instance, separating sales and marketing into distinct departments, with delineated workforce, goals and objectives (Boisot & McKelvey 2011, 8). The second phase is self-organization where coordination arises from interactions between organizational components. Self-organization is spontaneous process in an initial disordered system and may not necessarily be controlled by any internal or external agent or subsystem (Loorbach 2010, 163). Often, people experiences random fluctuations and the strategy is wholly decentralize to all components in the organization. The people who have already developed adaptive behaviors are able to survive from the perturbations. In an organizational context, self-organization revolves around organizational capabilities. Each component in the organization has to define the capabilities required for the execution of a strategy and map the capabilities in relation to successive time horizons. The phase requires an assessment of workforce for potential and capabilities. Eventually, it is possible to define the gaps and respond by either developing and implementing talent development or firing ineffective employees. Both methods were used in GE, where 13,000 people were fired and new talented employees infused to have new human capital in GE with venues like Crotonville, NY used as training facility to promote knowledge diffusion in GE. In turn, acquisition plans are used for building and assuring requisite capabilities (McKelvey 1). The third phase is where interdependency effects develop. As members are aware of what is required of them, they tend to establish platforms to enhance best practices. The platforms within the organization support and motivate high commitment and performance. They prepare a workforce that is good enough for the achievement of the required goals. In organizational contexts, interdependency effect develops through organizational culture. Members will naturally be attracted to people whom they feel they will increase their high performance. The resulting is stable operating environment with defined standards, requirements and values that are fit for the business (Rotmans & Loorbach 2009, 187). In the fourth phase referred to as multilevel co-evolution, the leaders successfully molds a bottom-up and autonomy driven organization that can thrive despite the increased complexity. After defining the required actions, the leader leaves the execution to the workforce. This is the last phase of a strategy that leads to effectiveness as organizational teams are able to build business practices. They also develop capabilities to sharpen the competitive edge and delivery of high performance results (Kallis & Norgaard 2010, 692). Eventually, the strategy success results from a cohesive and integrated organization that centrally focus on achieving some desired outcomes. Kauffman, 1993 concurred with the claims of complexity perspective by what he referred to as the “melting zone” p.16. He claimed that, a spontaneous order creation can only begin by bringing three significant elements on board in an organization. First, there must be existence of heterogeneous agents. The agents are people that create physical situations and allow people to members of an organization to talk in ways that might be impossible in normal course of business. The employees develop weak-ties-connections which promote knowledge diffusion in an organization. Secondly, there must be connections among them and this is brought about by common functions, roles and actions that attract them together. Thirdly, there must be motives to connect. Employees will connect and be productive once the leaders articulate demands over their roles. Motives facilitate conversations and professional interactions. Complexity perspective gives new insights about a strategy. It argues against managerial approach to leadership which only develops a passive employee behavior due to top-down control. In turn, firms need to continuously explore some new leadership solutions. The top-down approach can only take strategy as being derived from the organization. Consequently, the leaders embark on repeated activities organizing, monitoring and evaluating the members’ activities in relation to certain objectives. However, the bottom-up approach can have a far-reaching effect and successfully help in achieving long-term goals as members are autonomous to explore how to carry out a strategy and achieve the required goals (Putnam & Nicotera 2009 9). Complex adaptive system Complex adaptive system perceives an organization as a complex macro structure with a collection of similar and partially connected smaller structures formed to adapt to changing environment as well as increase the survival of the macro structure. The micro structures are formed of dynamic network of interactions and relationships. The structures are adaptive as individual and collective teams adapt behaviors that facilitate self-organization to correspond to changes initiated by single or a collection of events. In modeling perspective, a strategy is a conditional action pattern indicating what is to be done and in which circumstances (McDaniel Jr, Lanham, & Anderson 2009 191). Consequently, strategy depends on how agents or members of an organization avail a collection of skills, knowledge, capabilities and experience for interacting with organizational resource as well as other members of the organization. To a greater extent, the modeling perspective supports the claim by Jarzabkowski et al, (2007) that Strategy is not) something that an organization has but is sorely on what members in an organization does. One way to understand the unique role of members of an organization is through how they interact with the material resources in an organization. Without the action of the agent or members in an organization, the material resources cannot respond by themselves. However, organizational workforce possesses the properties, capabilities and strategies that design and attribute actions as successful or unsuccessful (Kompaso & Sridevi 2010, 89). In turn, the success of any leader in an organization can only be realized if they look at the organization workforce as a collection of strategies. Consequently, such leaders will facilitate the development of interaction pattern to create cohesion among individuals. One of the tenets of the perspective is type or strategy, which comprises of all agents in an organization that possesses common characteristics. The teams are not a collection of mere people but it is collection of strategies. AT&T Connect is one example that can helps us understand how particular members of an organization become effective. AT&T has a state-of-art-facility that is used by different workforce teams to promote their skills. Those at managerial levels use AT&T Connect as a platform for leadership training, mentorship, creating networking contacts and improve skills through collaboration. For instance, there are distinct teams or department in AT&T such as technology developers, researchers and designers and marketers that ties together based on their ability to lay favorable strategies for AT&T (Christensen & Raynor 2013, 1). As a system, organization develops interaction patterns which manifest as recurring regularities among agents or team within the organization. In order to adapt, there is an enduring feedback between the structures of relationship. In any professional organization, these structures of relationship help to achieve the goals. Members of an organization constantly develop actions that inject new pattern of interaction and re-adapt from feedback and repeated contact. Patterns are often utilized as a foundation of task retrospectives (Ramirez & Cheng 2010, 90)). In turn, pattern becomes incremental path that leads to organizational improvement. The pattern style aims at building the organization through finding the weak points in an organization and a pattern that can strengthen the underlying weakness. When the pattern is applied, the agents must measure any improvement or degradation. Even when a pattern improves things, the agents have to go back to step one to find the next improvement. However, if it fails, the agent has to seek for alternative. Such patterns are common with agile software developers like Microsoft Inc. By being adaptive, the members as well as the organization at large integrate the principles of continuous discovery to survive or improve performance. Majorly, adaptation means continuous change in the way people communicates, cooperate as well as specialization processes. The three significant processes are unique as they are found in all levels; from agents to the organization (Somech, Desivilya & Lidogoster 2009, 360). In the long-run, the organization goes through a selection process leading to increase in frequency of particular characteristics among its workers and incline to particular types of strategies. The practice perspective The practice perspective or activity-perspective of strategy assumes that a strategy is ingrained in activity. It has identified a strategy as a practice in the organization that is done and enacted by members. The process involves people who make, formulate, implement and execute strategies (Johnson 2007). In that sense, a strategy is not an organizational property or something that a firm assume as a plan or position that consequently give direction but is something that various participants in the organization continuously engages in. To conceptualize the perspective better, Jarzabkowski (2005: 1) noted that, how strategy is done the people who does it and the processes they use to do it is very important in identifying the roots of a strategy. This is the focal point that identifies strategy as practice. Specifically, strategy in an organization can be understood from a social practice point of view. To enact the strategy, there must be some sets of social interactions, conversations and routines that facilitate projection of direction by managers and the members (Jarzabkowski, Balogun & Seidl 2007, 1). Strategy has to be taken as a socially activity to be accomplished through strategizing or bringing in actions, negotiations and interactions from multiple actors to accomplish an activity. The definition shows that a strategy is an overarching term that can be substituted by conversations, routines, activities and interactions to activate and transform the organization on a daily basis. Individual participate in discourse and actions to figure out various and embedded sets of economic, social and political relations. However, for an activity to be considered as strategic, it must be consequential for strategic direction, outcome, competitive advantage and survival of the organization. One unique way in which the practice perspective varies from the first two perspectives discussed above is the way it delineate the role of managerial agency. The perspective broaden its managerial understanding by not only concentrating on the role of top and middle managers and includes other organizational actors and change agents by noting the significance of lower level employees (Lambrechts, Grieten, Bouwen, & Corthouts 2009, 41). Additionally, it comprehensively identifies strategic actions as situated and practical activities that are shaped by different actors in the organization. However, it has its limitations as it emphasizes on how strategies are constructed but fails to focus on how an organization changes (Kappler 2007, 2). Despite its limitation, it demonstrates the continuity of an organization as it shows the dynamic nature of all constituent processes in any organization. Human agents in these organizations are not passive to the internal and external forces that face an organization and thus, they actively respond by acting towards favorable outcome. The actions designed and implemented are the strategies and in which can be separated from human agent themselves under any circumstances. In real life cases, practice perspective is more applicable in community building strategies. In most cases, short-term community strategies require effort from significant people to design actions for particular outcomes. The strategy shifts to all the actors at various levels who coordinate and share experiences to focus and craft desirable reaction in different parts of the system. Several activities follow like establishment of new concepts, connections and relations, learning and training activities (Jarzabkowski & Paul Spee 2009, 70). In turn, these processes helps to interpreted and disseminate the contents and aspects of desirable action or strategy. Constantly, the actors must evaluate the changes injected in the system and in turn refine or clarify the objectives to various levels of actors. Eventually, the whole process ends up integrating or re-integrating all actors and connects them towards a course of action (Kappler 2007, 1). Impact on leadership Impact on leadership can be understood by how the actions of people in an organization impact on leaders who adopt restrictive strategies. Leaders differ depending on how they impact on people. On one hand, senior managers, CEO’s and middle managers with high potential may adopt strategies that help to create a setting and facilitate the manner in which people are empowered. The leaders have constructive impact and readily transform, influence and shape organizational environment where people operate. Additionally, they impact on how people approach work as well as how they interact in the organization. Such leaders are noted to employ prescriptive strategies and end up having a constructive impact. They understand that people are connected or are naturally endowed with strategies and their role as leaders is to facilitate a culture that ensures that the strategies are brought forth and implemented to effectiveness. Prescriptive leaders succeed in creating sustainable and effective organizations (Cooke 2012, 1). In real life situations, such leaders are may include CEO’s mandated to lead an organization for a specific duration of time or leaders in organization whose continuity is based on how it injects new information into its operations. Prescriptive leadership is currently adopted by leaders in technological-based, pharmaceutical research and development organizations or organizations that ventures into new market with different cultural, political and social orientations. For instance, most of western multinational corporations that are establishing operations in Asian countries are faced by psychic distance and hence, they must ensure that different actors in the organization identifies essential strategies to be effective and survive in these new regions. On the other hand, people in an organization can impact on leadership despite the existing defensive impact from leaders on their behaviors. Revolutionary and evolutionary changes are different ways that creates changes in an organization. Many frameworks favor the process where senior leadership promotes change by buying-in and telling the subordinates how to do things. The change results from a high-pressure mandate where senior leadership details and expect improvement to take place. In contrast, evolutionary change occurs in a slow manner through the efforts of change agents that help person by person first to understand change and implement it. In such instances, people’s approach and comment are building collaboratively (Borwick 2013, 1). Despite the senior leadership being on board, they are not the major driver of change but continuously appreciate the efforts from the members. The change then occurs almost imperceptibly and in small amount. Though the change is often slow, once the people develop strategies, change becomes part of the organizational culture as more people are involved in designing change and also identify with change. The strategies that lead to change have high likelihood of fitting in the organization since they are also implemented with understanding of the current situation (Kania & Kramer 2011, 40). Additionally, more people are involved in strategizing and that leads to more strategic solutions. Eventually, such strategies impact on leadership who then makes it easy for the people to continue building the momentum. Project management techniques are a good example where one person may identify an incident and lead others to figure out shortcuts. Conclusion Complexity perspective offers a wider notion of how strategy develops its consequent impacts on routines and micro structures. The perspective has shown that, leadership solutions are necessary to ignite changes and achieve continuity in any organization. However, once the leader ignites change in structure and routines, it is the responsibility of constituent structures to deliver and continuously re-invent to be relevant and meet the objectives of the organization. Complex adaptive system on its part has conceptualized a strategy as a process that impact on larger system and micro structures. The people or agents are central due to how they utilize the resources available to cause changes in respective micro structures or departments hence impact on changes and continuity of the larger system. On its part, practice perspective does not pay much attention to how structures and routines in an organization are significantly altered but concentrates on how nearby actors tend to interact and the central role of the top, middle and lower actors in attaining a successful strategy. The theories identify what strategy is and converge at a point where human agents are central to any strategy. References Boisot, M, & McKelvey, B 2011 Connectivity, extremes, and adaptation: A power-law perspective of organizational effectiveness Journal of Management Inquiry, 1056492610385564. Borwick J June 2013, Revolutionary vs. evolutionary organizational change, HEIT Management. Retrieved 17 Mar. 2015 from http://www.heitmanagement.com/blog/2013/06/. Christensen, C, & Raynor, M 2013 The innovator's solution: Creating and sustaining successful growth Harvard Business Review Press. Cooke, R A 2012, Leadership/Impact. Human Synergistics International. Retrieved from http://www.humansynergistics.com/ Jarzabkowski, P, & Paul Spee, A 2009 Strategy‐as‐practice: A review and future directions for the field International Journal of Management Reviews, 111, 69-95. Jarzabkowski, P, Balogun, J, & Seidl, D 2007 Strategizing: The challenges of a practice perspective Human relations, 601, 5-27. Kallis, G, & Norgaard, R B 2010 Coevolutionary ecological economicsEcological Economics, 694, 690-699. Kania, J, & Kramer, M 2011 Collective impact Stanford Social Innovation Review, 91, 36-41. Kappler, F 2007 A practice-based perspective on strategic change Doctoral dissertation, University of St Gallen Pp 1-402. Kauffman S A 1993 The origins of order: Self-organization and selection in evolution Oxford university press. Kompaso, S M, & Sridevi, M S 2010 Employee engagement: The key to improving performance International Journal of Business and Management,512, p89. Lambrechts, F, Grieten, S, Bouwen, R, & Corthouts, F 2009 Process Consultation Revisited Taking a Relational Practice Perspective The Journal of Applied Behavioral Science, 451, 39-58. Loorbach, D 2010 Transition management for sustainable development: a prescriptive, complexity‐based governance framework Governance, 231, 161-183. McDaniel Jr, R R, Lanham, H J, & Anderson, R A 2009 Implications of complex adaptive systems theory for the design of research on health care organizations Health care management review, 342, 191. McKelvey, B 2010 Complexity leadership: The secret of Jack Welch's success International Journal of Complexity in Leadership and Management,11, 4-36. McKelvey,B. Changing Business Environment Calls for Complexity Leadership UCLA Anderson School of Management Retrieved 17 Mar 15 from http://wwwandersonuclaedu/knowledge-assets/bill-mckelvey. Putnam, L L & Nicotera, A M Eds 2009 Building theories of organization: The constitutive role of communication Routledge. Ramirez, A J, & Cheng, B H 2010, May Design patterns for developing dynamically adaptive systems In Proceedings of the 2010 ICSE Workshop on Software Engineering for Adaptive and Self-Managing Systems pp 49-58 ACM. Rotmans, J & Loorbach, D 2009 Complexity and transition managementJournal of Industrial Ecology, 132, 184-196. Somech, A, Desivilya, H S, & Lidogoster, H 2009 Team conflict management and team effectiveness: The effects of task interdependence and team identification Journal of Organizational Behaing or vior, 303, 359-378. Read More