Tuesday, November 15, 2011

Organization Theory - 37 (Uncertainty and Information need)

In the last blog, we looked at the relation between the various ecology theories we learnt. In today's blog we begin our discussion on Complexity and its implications.

Early definitions of Complexity looked at it from 2 angles
- Number of Elements in the Environment
- Rate of Change in these environmental elements

Put on a 2 x 2 matrix, it would look similar to the following.



However, this definition would be relative to the person reading it and getting one standard definition for the same wouldn't be easy. It would be easier to look at this from the information perspective.

The information perspective argues that managers feel uncertain when they perceive the environment to be unpredictable, and this occurs when they lack the information that they feel need to make sound decisions. The new 2 x 2 would now look like the following:

On an interesting note, Isomorphism refers to requisite variety - the belief that organizations match the complexity of the environment with internal structures and systems. i.e. when the environment is simple the organization is simple.

Organizations which confront different conditions and elements in their environment handle this pressure nu internal differentiation. The different departments specialize to handle the change in that component of the environment!

Read in Kannada:

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