Strategisk Ledelse

Strategisk Ledelse 7. undervisningsgang – 22. oktober 2012

Lectures, Autumn 2012

The complexity sciences • All ideas in section 1 (chapter 1-9) is imported from natural sciences and complexity theories could present significant challenges to this way of thinking • The complexity sciences will establish the transition from section 1 to section 3 of the textbook Strategic Choice Theory Complex Responsive Processes Transition

Chaos theory • Chaos theory is not to be regarded as utter confusion! • It is an extension of systems dynamics and focuses on the phenomenon is changing over time • The model is iterated over time, which means that calculated output of one period is taken as input for the next calculation and identifies dynamical properties • In system dynamics, a model can, at one point, display an equilibrium. In chaos theory, the ‘Point Attractor’ settles for such an equilibrium. • At other points, the model displays perfectly stable and predictable cycles of movement which is referred to as ‘Cyclical’ or ‘Period two, attractor’

Chaos theory • The highly unstable behavior, for certain parameter values, of system dynamics is referred to as ‘high-dimensional chaos’ – a pattern of fragmentation • Between stable parameter values (point or cyclical) and unstable values (chaos) the system moves in a manner that seems random, but displays a pattern • The pattern is regular irregularity or stable instability which means it is predictably unpredictable • Paradoxical pattern of movement; Strange attractor, which is referred to as Mathematical Chaos and is a completely differently dynamic where stability and instability is inextricably intertwined

Chaos theory • High sensitivity to initial conditions and even tiny differences in the input of one period can escalate so that patterns change qualitatively in later periods • Long-term predictions is therefore impossible! • Weather systems actually follows a Strange Attractor and can be visualized as the ‘Butterfly Effect’ • Short-term predictions are possible, because it takes time for tiny differences to escalate • Impossible to identify specific causes the produces specific outcomes, but boundaries and the nature of the patterns are known

Chaos theory • Chaos theories do not have the internal capacity to move spontaneously moves from attractor to another, this requires an external force for parameter change • Causality continues to be formative and chaos models are unfolding the pattern already enfolded in its mathematical specification • Incapable of spontaneously generating novelty

Dissipative Structures • Based on demonstrations that shows how physical and chemical systems displays unpredictable forms of behavior when far from equilibrium • Systems may reach critical points where they self-organize to produce a different structure or behavior that cannot be predicted from knowledge of the previous state • This more complex structure is called Dissipative Structures because it takes energy to sustain that new mode

Dissipative Structures • Example with thermodynamics • Closed to environment and temperature uniform • At a state of rest on global level (no bulk movements) • Movements of molecules are random and independent • System behavior is symmetrical, uniform and regular • When heat is applied, the liquid is pushed for from its equilibrium and small fluctuations are amplified throughout the liquid • Temperature change at the base is amplified or spread through the liquid. Molecules start to move upward • Established convection so molecules least affected are displaced and moved down to the base • The molecules are now moving in a circle • At a certain temperature point, the molecules start setting up hexagonal cells and turning both ways • The cells are self-organizing in a non-predictable way!

Dissipative Structures • When the water boils, a state of deterministic chaos • In nature, as opposed to laboratory experiments, parameters are changed by nature itself. • Self-organization is a process that occurs spontaneously at certain critical system values • Such spontaneously moves to different attractors, only emerges when impacted from the environment • The dissipative structure dissolves easily if the system moves away from critical parameter values • Equlibirum structure: • No effort to retain structure • Great effort to change structure • Dissipative structure: • Great effort to retain structure • Little effort to change structure

Dissipative Structures • A wider implication of these identifications could be whether the future is given, or is it under perpetual construction? • Prigogine: Nature is about the creation of unpredictable novelty, where the possible is richer than the real • Life is a unstable system with an unknowable future in which the irreversibility of time plays a constitutive role • In the case of organizations, then decision making

Dissipative Structures • If these theories were to be applied to an organization, then decision making processes that involved; • Forecasting • Envisioning future states • Making key assumptions about future states • .. would be problematic in terms of realizing a chosen future. Those applying such processes in conditions of stable instability would be engaging in fantasy activities • No one can establish how the system would move before a policy change and how it would move after the policy change. There would be no option, but to make the change and see what happens

Complex Adaptive Systems • CAS is characterized by a large number of agents, each of which behaving to some set of rules. • These rules requires each agent to adjust its action to that of other agents and hence forming a system which also could be thought of as a population-wide pattern • Examples of Complex Adaptive Systems; • Bird flocking, where individual agents who might be following simple rules to do with adaption to the movement of neighbours so as to fly in formation without colliding • The human body, consisting of 30000 individual genes interacting with each other to produce human physiology • An ecology with a number of species relating to each other to produce patterns of evolving life forms

Complex Adaptive Systems • Complexity sciences seeks to identify common features of the dynamics of the example systems in general and how do such complex non-linear systems function to produce orderly patterns across a population? • The expectation, when using traditionally sciences, when studying such phenomena's would be to identify laws governing evolution or blue-prints for the system • Scientists working with CAS take a fundamentally different approach, they model individual agent interaction with each agent behaving to its own local principles of interacion

Complex Adaptive Systems • This leads to the principle of self-organization, agents interacts locally according to their own principles in the absence of an overall blueprint for the system they form • Self-organization and emergence can lead to fundamental structural development (novelty), not just superficial change • This is Spontaneous or Autonomous, arising from the intrinsic iterative nonlinear nature of the system • The inherent order in a CAS which evolves as the experience of the system, but no one can know what that evolutionary experience will be until it occurs

Complex Adaptive Systems • Fitness Landscapes gives insight in evolutionary process, just as animals develops strategies to feed and survive • To reach a peak means survival and to get trapped in a valley means extinction • The peaks cannot beseen from lower levels • Moving upwards through logicallyincremental strategymay fail due to missingcross-replication

Summary and perspective • Introduction to; • Chaos theory • Dissipative structures • Complex Adaptive Systems • A number of writers has been using these theories applied on organizations, however; • System views of interaction retained • Cognitivist approach to human psychology • Prescription of the manager as the objective observer • Overall a re-representation of SCT

Complex Responsive Processes

Complex Responsive ProcessesIntroduction • When discussing organizations, fundamental questions immediately arises, which have to do with what an organization is and how it is becoming what is becoming • In part one of the book (SCT), which is sees humans as independent, autonomous individuals acting rationally, is concerned with how an organization is becoming; Strategy as a process (desired outcomes) • SCT is based on the ideology of control which means that leaders and dominant coalitions choose the process and content of strategy for an organization in order to ensure acceptable performance

Complex Responsive ProcessesIntroduction • Part two explored more recent developments in understanding dynamics of systems • Complex systems displays the capacity to change and produce new forms only when they operate in a paradoxical dynamic of stability and instability at the same time • Emergent forms is a result of self organization • Important because these theories challenges the most fundamental assumptions of SCT because harmony and consensus cannot be equated with success and unpredictability is fundamentally unavoidable • Micro diversity is essential for the emergence of new forms

Complex Responsive ProcessesIntroduction • The following part of the book (part 3) will explore how we might interpret the radical insights of complexity sciences in terms of human action • Humans differ from the objects studied in part 2, because they are unique and, therefore, diverse persons who are conscious, self-conscious, emotional, rational, irrational, often spontaneous beings capable of some choice • The SCT standpoint, claiming that humans are independent, autonomous individuals is considered as fiction in part 3, because people are always fundamentally and inescapably interdependent

Complex Responsive ProcessesIntroduction • As a departure from previous sections, the term Complex Responsive Processesof relating, refers the attention directly upon the responsive manner in which human persons interact with each other • A radical different view of dealing with the how, what the organization is becoming. • In the CRP perspective, process refers to the fundamental processes of human interaction – namely communicative interaction between interdependent persons taking the form of the conversation of gestures – and at the same time power relating • What happens to an organization emerges in the interplay of intentions between people

Complex Responsive ProcessesIntroduction • The essence of the Kantian thinking was presenting a particular notion of process, systemic process, involving a particular notion of time (linear) • This view point is in its essence dualistic (both..and) which was a way to eliminate paradox • The how of strategy, the process, is then designing, shaping and influencing the system as a whole and its process. • The Content of strategy is thought of as the pattern of intended movement of the system and intended changes in the process over time by a regulator or controller standing outside them. Strategy here is about moving systems and designing process

Complex Responsive ProcessesIntroduction • From a responsive process perspective, the how of strategy is thought of as social processes of interaction between conscious and self-conscious persons in which their very identities emerge • The content of strategy is thought of as patterns of interaction : that is, as iterated identity • Strategy, here, is all about sustaining and changing identity: that is who we are and what we are doing together • Going forward it will be displayed how complexity sciences can be interpreted in human terms using social, responsive processes thinking; Hegel/Elias

Responsive Processes Thinking • The thinking by the Romantic idealists were concerned with self-consciousness where the subject is an object to itself • It is the self that is real and all experience is carried back to this immediate experience of the self so that the reflexive position becomes central • Individual selves and social relations is understood to be intimately interconnected and experience is understood as historical, social processes of consciousness and self-consciousness

Responsive Processes ThinkingHegel Subject • Private Silent Conservations • Conscious to others • Acting roleplays as other subjects would act to self • Building self-consciousness Mind Intra-subjective behaviour Subject Subject Mind Mind Hegel: Subjects sees each other as objects; reconfirming Subject Sees an object Mind Mirror

Responsive Processes ThinkingHegel • In Hegels philosophy, the development of thought takes place through conflict between persons and the world of our experience is the world we are creating in our thought • Subjects (and agents around) are interacting responsively and there are no separate realm outside experience. • The notions of person and subject are historically specific and are given content only by the social institutions in which each individual achieves social identity through interdependence and mutual recognition

Responsive Processes ThinkingHegel • Individuals are fundamentally social practioneers and what they do, think or says takes form in the context of social practices, while these practices provide the required resources, objects of desire, skills and procedures • Paradoxical perspective in which individual minds are simultaneously forming and being formed by social relations -> Transformative causality

Responsive Processes ThinkingHegel

Responsive Processes ThinkingElias • Elias did not think about the relationship between the individual and society in terms of any spatial distinction between inside and outside. • Instead, he pointed to the essential interdependence of people and he understood both individual and social purely in Responsive Processes terms • Societies are always more or less incomplete, remaining open in time as a continuous flow

Responsive Processes ThinkingElias • Western civilisation is not the result of any calculated long-term planning. Individual people did not form an intention to change civilisation and then gradually realiserealise this intention through rational purposive measures • Social changes produced rational planning kinds of individuals, not the other way around • The development of a society was not caused by ‘mysterious’ social forces but is the consequence interweaving, the interplay of the intentions and actions of many, many people • Change of society occurs in an unplanned manner but nevertheless displayed a specific type of order

Responsive Processes ThinkingElias • Probably unaware of complexity sciences, Elias is describing here what complexity scientists call self-organisation and emergence • Individuals and groups are interacting with each other, in their local situations, in intentional, planned ways – however, these cannot be foreseen by any of them. • Long-term, population-wide patterns will emerge without an overall plan or blueprint • A trend or direction in the evolution of the consequences of the interweaving of individual plans and intentions – which is self-organisation and emergence

Responsive Processes ThinkingElias • No polarisation in intention an emergence • In SCT, emergence means either; • Everything happens by chance, or • Is such, that it can be designed, conditioned or at least influenced by powerful effective individuals with intention • Elias suggests that people interacts with intentions but their intentions will differ – indeed, each of these intentions is a response to the intentions of others – and so what happens emerges in the interplay of all their intentions

Responsive Processes ThinkingElias • All that everyone can do, no matter how powerful, can do is to continue participating with intention and continually negotiate and respond to others who are also intentionally doing the same. • It is in this ongoing intentional, local interaction of strategising that the population-wide patterns of strategy emerges • Change occurs in paradoxical transformative processes – change is self-organising, emergent processes of perpetually constructing the future as continuity and potential transformation at the same time

Responsive Processes ThinkingElias • We cannot identify self-organising social order with the order of nature, or with some kind of supra-individual • The order arises in specific dynamics of social interplay in particular places at particular times • If it makes sense to think of societies and their ‘strategies’ in this way, then there is no reason why we could not think of about organisations in this way too and this is what rest of the chapters will do • What emerges does so precisely because of what all involved do and do not do

Exercise • Groups will be formed • The human analogues in table 12.2 (p. 319) will be distributed among the groups and should be explained in class

Strategisk Ledelse