The Edge of Organization The Edge of Organization Chaos and Complexity Theories of Formal Social Systems Russ Marion ® SAGE Publications International Educational and Professional Publisher Thousand Oaks London New Delhi Copyright © 1999 by Sage Publications, Inc. All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher. For information: SAGE Publications, Inc. 2455 Teller Road Thousand Oaks, California 91320 E-mail: [email protected] SAGE Publications Ltd. 6 Bonhill Street London EC2A 4PU United Kingdom SAGE Publications India Pvt. Ltd. M-32 Market Greater Kailash I New Delhi 110 048 India Printed in the United States of America Library of Congress Cataloging-in-Publication Data Marion, Russ. The edge of organization: Chaos and complexity theories of formal social systems / by Russ Marion. p. cm. Includes bibliographical references and index. ISBN 0-7619-1265-7 (cloth: alk. paper) ISBN 0-7619-1266-5 (pbk.: alk. paper) 1. Social systems. 2. Complex organizations. 3. Chaotic behavior in systems. 4. Complexity (Philosophy) I. Title. HM131 .M3355 1999 910'.2'02—dc21 98-40063 This book is printed on acid-free paper. 99 00 01 02 03 04 05 7 6 5 4 3 2 1 Acquisition Editor: Harry Briggs Editorial Assistant: Anna Howland Production Editor: Astrid Virding Editorial Assistant: Nevair Kabakian Designer/Typesetter: Marion Warren/Lynn Miyata Indexer: Teri Greenberg This book is dedicated to the people in my past— my father and grandparents— whose presence in this work is indelible; and to my wife Gail, daughter Cathy, and mother Lois, whose presence in this labor was indispensable. Contents Preface xi 1. The Edge of Organization 1 Einstein's Island 2 A Brief Overview of Chaos and Complexity 5 Implications 8 2. Chaos and Organization 11 The Blind Scientists 13 An Alternative Explanation of Complex Behavior: Chaos Theory 14 3. Organization at the Edge 23 Complexity and Chaos 23 4. Shifting Historical Premises to the Edge of Chaos 39 God of the Gaps 39 Pervasive Problems: Order, Randomness, and Causality 40 The First of Newton's Legacies: Social Physics 42 Kant and Teleology 44 Darwin, Spencer, Social Darwinism 49 Structural Functionalism and Homeostasis 55 Nonlinear History 61 5. A Nonlinear Redaction of Open Systems 63 Holistic Systems 64 Systems and Environment: Interaction and Energy Transfer 70 Feedback 74 Living Social Systems 79 A Model of Complex Systems 80 Structural Contingency Theory: Differentiation and Awareness 83 Structural Contingency Theory 84 Differentiation in Organizations 88 Formalization and Integration 95 Criticisms of SCT 97 Footprints of Complexity: The Nature of Order 99 Size and Structure at the Edge of Chaos 99 Order From Disorder 100 Social Systems and the Square Root Principle 105 Resource Dependency: The Emergence of Order 113 Organizations and Daisies 113 Controlling the Organizational Environment 116 Complex Alliances 122 Complex Natural Teleology and Deliberate Behavior 130 Intermission 135 Organizations in Wonderland: Enacted Environment 137 Organizations in Wonderland 138 Interaction and Causality 143 Irrational Humans and Complex Structures 150 Coupling at the Edge 153 Loose Coupling at the Edge 153 Decisions in a Garbage Can 170 Organizational Learning 173 Darwin and Organizations, Goats and Monkeys 177 PEO and Environment 180 Natural Selection 182 The Three Sides of Evolution 184 Refining the Order 189 PEO and Complexity 195 12. Pushing the Envelope: Limiting Organizational Expansion 197 Organizational Growth 198 Carrying Capacity and Structure: Generalists Versus Specialists 208 13. Changing Complex Organizations 211 Star Trek and Change 211 From Paint Jobs to Core Technology 212 Do We Change Events or Do Events Change Us? 215 14. Stability and Change at the Edge 235 The Wild Side of Change 235 Change That Doesn't Change and Change That Does 236 The Mechanics of Change: Complexity in a Sandbox 240 Organizations at the Edge: The Microcomputer Industry 251 Change and Networks 258 Organizational Structure and Patches 265 Change and Star Trek 269 15. Researching Social Chaos and Complexity 273 Growth in Organizational Populations: A Chaotic Model 273 Finding the Order: First We Need a Map 277 Organizational Growth (Revisited): Competition Model 284 Testing Social Systems for Chaos 294 Complexity Analysis: Counting the Groups in a System 303 Research on Chaos and Complexity 307 16. Epilogue on Einstein's Island 309 Complex Systems Theory 313 Other Puzzles 314 Notes 317 Annotated Bibliography of Books and Articles 319 References 329 Name Index 343 Subject Index 347 About the Author 357