Creative Management of Complex Systems

This book is a general presentation of complex systems, examined from the point of view of management. There is no standard formula to govern such systems, nor to effectively understand and respond to them. The interdisciplinary theory of self-organization is teeming with examples of living systems that can reorganize at a higher level of complexity when confronted with an external challenge of a certain magnitude. Modern businesses, considered as complex systems, ideally know how to flexibly and resiliently adapt to their environment, and also how to prepare for change via self-organization. Understanding sources of potential crisis is essential for leaders, though not all crises are necessarily bad news, as creative firms know how to respond to challenges through innovation: new products and markets, organizational learning for collective intelligence, and more.

Table of Contents:
Preface ix Chapter 1. Introduction: Why Do We Talk About Complexity in Management? 1 1.1. Examples of complex and/or innovative projects 2 1.2. Complex systems, rationality and knowledge 5 1.2.1. Outlines of complexity and complex systems 5 1.2.2. Information and learning 7 1.2.3. Rationality 10 1.3. Cognition and the theory of the firm 15 1.3.1. Creativity and the evolutionary theory of the firm 17 1.3.2. Creativity and knowledge 18 1.3.3. Creativity and novelty within a system 20 1.4. The entrepreneurial dimension 22 1.4.1. The philosophy of effectuation 24 1.4.2. Evolutionary models 25 1.5. Conclusions 26 Chapter 2. The Evolution of Complex Systems 29 2.1. Adaptation, learning and flexibility 30 2.2. The nonlinear behavior of “imbalanced” systems 32 2.3. Autonomy and responsibility 35 2.3.1. A sociological approach to the question of “irresponsible” complex systems 35 2.3.2. The role of the leader 36 2.4. Different evolutionary models 39 2.4.1. The large models inspired by the natural sciences 39 2.4.2. Human evolution 41 2.4.3. The evolution of economic organizations 42 2.4.4. Proactive evolution: from adaptation to exaptation 44 2.5. Implications for management 46 2.5.1. Thinking in a nonlinear way 46 2.5.2. Anticipating breakthroughs 48 2.5.3. Managing learning and encouraging agents 50 2.6. Closing remarks 52 Chapter 3. Steering Complex Adaptive Systems: Managing Weak Signals 55 3.1. Navigating the ocean of signals 57 3.1.1. Understanding the nature of the ocean 57 3.1.2. Observing the ocean 58 3.1.3. Taking a course 64 3.1.4. Navigating in symbiosis 67 3.2. Managing interdependences and dancing with the system 69 3.2.1. The transmission of signals as a creative process: the example of composite materials 71 3.2.2. The nonlinear changes at the source of evolution 74 3.3. Surfing on the wave 82 3.3.1. Preparing the actors means first listening to them 82 3.3.2. Choosing the right methods to design a strategy 83 3.3.3. Choosing a good steerer 85 3.4. Conclusion 97 Chapter 4. Entrepreneurship, Market Creation and Imagination 99 4.1. Some current stakes of entrepreneurship 102 4.2. The entrepreneur in the history of economic thought 105 4.2.1. The entrepreneur, harbinger of decentralized creativity 106 4.2.2. The entrepreneur according to Jean-Baptiste Say: the assembler of factors 109 4.2.3. The Austrian approach: a form of serendipity within the economic process 110 4.2.4. The Schumpeterian approach: from serendipity to creativity 111 4.2.5. The entrepreneur as a decision-maker in uncertain situations 114 4.2.6. Towards a taxonomy of the entrepreneurial function 116 4.3. Motivations, responsibility and identity of the entrepreneur 117 4.3.1. The entrepreneur’s responsibility 118 4.3.2. The entrepreneur’s identity 119 4.3.3. Conclusion on the entrepreneur’s motivations 122 4.4. Entrepreneurship and complexity: the role of the imagination 123 Chapter 5. Managerial Approaches and Theories of the Firm 127 5.1. Complexity and management: the first steps 130 5.2. Manager’s role versus complex systems 132 5.3. Marketing and complex systems 134 5.3.1. Hypotheses and theories of complex systems 136 5.3.2. Four types of complex systems 137 5.3.3. Honda and the global automobile market 140 5.3.4. Implications for the marketing manager 145 5.4. Complex systems and human resource management 146 5.4.1. RBV and complex systems 147 5.4.2. Strategic human resource management 149 5.5. Conclusion: managers’ creative responses 151 Conclusion 155 References 157 Index 173

About the Author :
Jean-Alain Héraud is Emeritus Professor of Economics at the University of Strasbourg, France. He is a member of the Bureau d’Economie Théorique et Appliquée, and President of the Association de Prospective Rhénane, which brings together experts in economic and social development in the Upper Rhine region. Fiona Kerr is Associate Professor at the University of Adelaide, Australia. An expert in neural and systems complexity, she is also a management consultant for various companies and organizations. Thierry Burger-Helmchen is Professor of Management Sciences at the University of Strasbourg, France. He is a member of the Bureau d’Economie Théorique et Appliquée.