In the modern age where business is spread globally the challenges in front of an organization are highly complex as the competition intensifies. Due to the complexity in the organizational management the older system methodology seems to become less relevant and sparingly less useful in these situations. These issues led to the introduction of complexity paradigm (Amagoh, 2008). Complexity theory was derived from the chaos and systems theory to show how a system is not confined in its boundaries and the growth or fall of an organization or a system depends upon how it is able to adapt and change to various situations.
Complexity in an organization can be defined as the heterogeneity or diversity in the internal environment factors like that of departments, customers, socio-political etc. (Mason, 2007:10). The complexity theory focuses on the affects of how parts at a micro-level can lead to major changes at the macro level (McElroy, 2000: 198; McKenzie and James, 2004: 35). The complexity of a system increases as the time goes by which in turn leads to much more changes within the system (Chakravarthy, 1997: 74). This change in systems makes it much more difficult to adapt to the changes. According to Rhee (2000: 488) the complex systems arises due to the interaction between the environment and the systems involved. In recent studies and researches done it was found that systems on the edge or on the near end of the threshold of instability usually tend to be more creative and adaptive to changes and lot of innovative behavioral approaches are produced. (Price, 2004: 44; Styhre, 2002: 347) In short we can compare complex systems to the nature around us. Just like you can't force a plant to grow you can just provide the things needed to help the plant grow and organization can be helped with different inputs but not necessarily all will be successful.
Complex Systems are non linear systems or systems where the input is not always proportional to the output. Huge event can have no effect on an organization while a small event can be devastating. Complex systems are based on the feedbacks to and fro from the environment surrounding an organization and also including the internal feedbacks. Unlike the general systems theory stating that the organizations strive to achieve equilibrium complexity theory states that the equilibrium state would mean the death of an organization. The very essence of life is to change and transform according to the need of the moment like Samsung took into Smartphone market with vigor transforming them into the technology giants they are at the moment.
Another difference between the General system theory and the complexity theory is the boundary. While in the case of general system theory a fixed boundary is defined for each system there is no fixed boundary as explained in the complexity theory. The boundaries keep changing along continually. As per complexity theory a 'bounded instability' state between rigidity...