Rethinking organizational performance management: a complexity theory perspective

Abstract

PurposeTraditional approaches to organizational performance management that emphasize objectivity, control and predictability are rapidly losing relevance in an environment characterized by increasing levels of complexity and dynamism. This paper draws on complexity theory to suggest a new paradigm for managing performance in organizations.Design/methodology/approachThe paper draws on the common features of complex systems and the corresponding concept of emergence to revisit key themes in organizational performance management and propose a set of implications for research and practice.FindingsUnderstanding organizations as complex systems and performance as an emergent property of such systems leads to a set of new research questions, the adoption of alternative methods and the formulation of novel propositions. It also has various implications for both academic research and managerial practice, from moving away from the traditional notion of organizational alignment to adopting a more explicit stakeholder-based view in the design and use of measurement systems.Originality/valueThe paper highlights the great potential of complexity theory for addressing contemporary issues in the field of organizational performance management and charting the landscape for its future development.

Identifying key elements for evaluating organizations' complex adaptive leadership readiness (CAL-R framework): paving the way for a measurement tool development

“…From the complexity perspective, performance is also considered as an emergent phenomenon, emanating from the interactions that take place within the system, as behaviors and beliefs change and co-adapt (Pavlov and Micheli, 2023). Overall, general CAS principles may lead to quality improvements of the system, if those principles are properly applied (Wilson et al, 2023).…”

“…However, we cannot rule out the fact that the world is inherently complex even in apparently more stable environments. Every organization is a complex entity consisting of people with also complex and non-predictable behavioral patterns (Gavalas, 2022;Pavlov and Micheli, 2023). As a living organism, sooner or later, an organization will have to adapt to emergent market trends and societal needs and undergo some kind of change or transformation, in order to improve its performance, in a realm that traditional managerial approaches have become obsolete (Pavlov and Micheli, 2023;Riaz et al, 2023).…”

“…Every organization is a complex entity consisting of people with also complex and non-predictable behavioral patterns (Gavalas, 2022;Pavlov and Micheli, 2023). As a living organism, sooner or later, an organization will have to adapt to emergent market trends and societal needs and undergo some kind of change or transformation, in order to improve its performance, in a realm that traditional managerial approaches have become obsolete (Pavlov and Micheli, 2023;Riaz et al, 2023). Therefore, the proposed framework, if carefully applied, could be valuable to organizations' development needs and performance improvement.…”

“…Performance is a multifaceted construct, defining the ability of an organization to meet its main goals and reach its key objectives and including various aspects of organizational practice, such as financial growth, productivity, customers', employees' or other stakeholders' satisfaction etc (AlMulhim, 2023). By definition, performance cannot be objectively defined, and it is context dependent, based on organizational and market characteristics (Pavlov and Micheli, 2023). In the context of the present framework, performance is mainly defined as the ability of an organization to effectively and efficiently respond and adapt to market changes and needs.…”

Social enterprise housing supply chains for resource-constrained communities: a complexity lens approach

“…In our case, the construction of housing is a vehicle for wider change, so the erection of dwellings could likely be achieved more rapidly (in the classical sense of "efficiency"), yet this misses the wider purpose of the SE's work. Pavlov and Micheli (2023) argue that performance is an emergent property of complex systems and propose that in such environments, alignment (or fit) requires "increasingly frequent loops of learning and adaptation" (p. 907). "Fit" as shown in Figure 1 can, therefore, be dynamic in nature, potentially incorporating correctable "misfit" as knowledge evolves, and feedback paths are developed.…”