Decision Theory in Complex Systems by John Bush

There’s some great leadership research papers posted in the Library of Professional Coaching. Here’s an excerpt from one that’s about complex systems and decision theory by John Bush.

Organizations are complex systems. A system can be considered complex if its agents meet four qualifications: diversity, connection, interdependence, and adaptation. In an organization the agents are all the people who work within the organization. These agents are diverse in that they are individuals with their own unique personalities, experiences, intelligence, emotions, preferences, etc. They are connected with each other by affiliation within the organization for the purpose of achieving the goals of the organization. They are interdependent since the work of each depends upon the other members of the organization. They adapt because each member of the organization is learning, changing, and evolving as a result of his interactions with the other members of the organization.
The process of adaptation is highly dynamic in response to local and global environments. The local environment of an organization is the interactions that occur within the organization; global environments refer to the interactions of the organization itself with other organizations. As organizations are connected and interdependent globally, organizations themselves learn and change and evolve locally, and individual agents within those organizations also adapt. It can be seen that adaption is a highly interconnected dynamic system.
Complex systems are often unpredictable and they can produce large events. They are robust and able to recover from serious damage. Complex systems produce bottom-up emergent phenomena where the results on the macro level are not equal to the micro parts of the organization. This phenomenon of emergence means that not only will the results be larger than the parts, but that at times the results will be different in kind. An example often given is the phenomena of self organization seen in flocks of birds or schools of fish. Emergent phenomena arises bottom-up without any top-down planning.
To understand the process of decision-making in complex organizations we must understand the concept of landscapes. Professor Scott Page in The Teaching Company course, Understanding Complexity, presents a full description of landscapes in complex systems. The idea of the landscape is both a metaphor and a mathematical object wherein the value of a function at a particular point is mapped as an elevation on a landscape. Landscapes are composed of valleys and two kinds of peaks: local and global. A local peak is a point on the landscape from which a step in any direction is a step down in elevation. A global peak is the highest of all the local peaks of a given landscape. In the metaphor a peak represents a high point of value and for organizations, the height of the peak represents the economic success of the organization at that point in time.


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