When organisations and ecosystems interact: toward a law of requisite fractality in firms

Abstract

Abstract:Complexity science has evolved greatly in the past 30 years, starting from its European roots in Prigogine's dissipative structures model of phase transitions, continuing through the Santa Fe School's focus on self-organised adaptation as explained through computational simulations, and now to it's most recent focus on power laws and their basis in scale-free causes. After briefly reviewing these three approaches to complex systems, we attempt to integrate them into a broad-based model of organisational design and performance. Our model develops the law of 'requisite fractality' -an updated version of Ashby's original law for organisations in dynamic environments. Implications for organisations and managers are discussed.

A supply network governance framework: a case study of the South Australian mining industry

“…In spite of the differences in industry contexts, the common structural properties of supply networks are usually identified as determinants of high efficiency, coordination, responsiveness, and adaptability of the supply network (Hearnshaw & Wilson, 2013).Empirical studies of real-world networkshighlight key universal topologies that emerge from self-organising processes, such as small-world and scale-free structures (A. L. Barabási, Albert, & Jeong, 2000;McKelvey, Lichteinstein, & Pierpaolo, 2012;Saavedra, Reed-Tsochas, & Uzzi, 2009).Thestructural properties associted with efficient real-world networks are: 1) short characteristic path length, 2) high clustering coefficient, 3) presence of a power law connectivity distribution, and 4) network modularity, or presence of communities (e.g.A.-L. Barabási & Bonabeau, 2003;Hearnshaw & Wilson, 2013;Newman, 2003). Short average path length in the supply network is a sign of responsiveness and ease of information diffusion.…”

Using maximum likelihood estimation methods and complexity science concepts to research power law-distributed phenomena

“…In these fractal structures, the same co-evolutionary adaptation dynamics appear at multiple levels. For example, McKelvey, Lichtenstein and Andriani (2010) cite 19 studies showing biological adaptation-based predator/prey fractal dynamics. Also, Zanini (2008) same effects hold for merger and acquisition activities in business niches, which Park et al (2009) empirically confirm with a century's worth of data.…”

Four types of emergence: a typology of complexity and its implications for a science of management

“…Many researchers suggest that complexity research can play an important role in organisation science and management (Brown and Eisenhardt, 1997;Anderson et al, 1999;Lichtenstein et al, 2006;Dooley and Lichtenstein, 2008;Allen and Boulton, 2011;Merali and Allen, 2011;McKelvey et al, 2011b;Thietart and Forgues, 2011). Complexity science aims to explain how heterogeneous agents 'self-organise' to create new structure in interactive systems, with the goal of understanding how such structures emerge and develop (Anderson et al, 1988;Colander, 2000;Dal Forno and Merlone, 2007;Epstein, 2007;Hazy et al, 2007;McKelvey and Lichtenstein, 2007;Miller and Page, 2007;Carley, 2007, 2008;Spada, 2007;Mitchell, 2009;Goldstein, 1999Goldstein, , 2007Goldstein, , 2011Prietula, 2011;Tracy, 2011).…”

“…Fractals are obviously present in living systems: biological, economic, social, and more specifically organisations and companies -just for starters Andriani andMcKelvey (2007, 2009), McKelvey et al (2011b) and McKelvey and Salmador Sanchez (2011) list some 180 power-law findings in living systems (with many more not listed). Power laws emerge from the combination of tension and agent connectivity.…”

“…This diagonal highlights the differences in explanatory power between traditional deterministic approaches and non-linear accounts of emergence in purposeful social systems. These advances have been expressed in accounts distinguishing 'old' versus 'new' science (Wheatley, 1992;Mainzer, 1994;Colander, 2000;Rosser, 2009), and in rigorous operationalisations of complexity to organisational phenomena (Lichtenstein, 2000;Curzio and Fortis, 2002;Lissack, 2002;Mitleton-Kelly, 2003;North and Macal, 2007;Helbing, 2010;Andriani and McKelvey, 2011;Lopez Moreno, 2011;McKelvey et al, 2011b;McGlade et al, forthcoming).…”