Is it chance that both the New Science and the Information Age appeared on the world scene at approximately the same time? The thesis of this article is that it is not chance: there is a direct connection between the two. Both were born out of the same technological development, they affect one another, and are co-emergent. With regard to organizations, their relationship takes this form: the Information Age has intensified a set of complex problems for organizations and other human systems. The New Science applied to organizations is an attempt to deal with those problems. Like the Information Age, the New Science was made possible by the development of computers and their networks. The New Science has the characteristics needed to begin to approach the complex adaptive problems facing organizations in the Information Age.
THE INFORMATION AGE
Toward the end of the second millennium of the Christian Era several events of historical significance have transformed the social landscape of human life. A technological revolution, centered around information technologies, is reshaping, at accelerated pace, the material basis of society. Economies throughout the world have become globally interdependent, introducing a new form of relationship between the economy, state, and society. (Castells, 1996: 1)
This technological revolution centered around information technologies has ushered in the Information Age. The Information Age has brought about major changes to humanity. The repercussions of these changes are of no less consequence and impact than those brought about in its time by the Industrial Revolution, which was co-emergent with the steam engine and another information breakthrough, offset printing presses and the consequent literacy explosion. The new era has significant implications for broad areas of human functioning. These in turn have far-reaching effects on organizations. What are these changes and how do they affect organizations? How have computers ushered in the Information Age?
The Information Age has two faces: the Knowledge Era and the Network Society. Both aspects of the Information Age have major consequences for society in all areas of human activity, such as work, culture, economy, national autonomy, business, identity, and ecology. They both have outcomes that have a great deal of impact on organizations: they affect the environment of organizations; they create growing difficulties for organizations to adapt; they decrease organizational lifespans; they demand a new set of characteristics from organizations if they are to be able to achieve sustainability. If an organization is able to embrace all these outcomes, it may be better off.
Much has been written about how knowledge has become the foundation of the modern economy as we have shifted from an economy of goods to a knowledge economy. Today, it is easy to see that we have evolved into a society whose distinguishing characteristic is that knowledge is the prime creator of wealth.
The Knowledge Era expresses a change in the basic resource of human production. It is a move from energy and matter as the major resources of human production to information/knowledge as the major resource. This signifies a trend in all areas of human production to activities based on a higher velocity of developing new knowledge. With the demise of the centrality of smoke-stack industries, industries based on knowledge, information, and communication take center stage and are the most vibrant sector of the economy, and even smoke-stack industries become more knowledge intensive. In the Knowledge Era, the quality and uniqueness of the knowledge component—whether in industry, services, or agriculture—form the main factor forging the destiny of that production. Organizations with an “intelligence advantage” have a greater survival capacity (McMaster, 1995).
The other face of the Information Age is the Network Society or, as some call it, the Network Revolution. The Network Society describes the basic change in connectivity and interdependence taking place in the world. Globalization is no longer a future scenario, but is now an everyday reality affecting all aspects of human living. Throughout the twentieth century the enormous advances in transportation, communication, and information technologies played a major role in making the world a global village. But more than anything else, it is computers and computer networks that created the means by which different parts of the world are intimately tied and braided together. They have been the dominant factor in spinning the intricate web of interdependencies between all sections and parts of the human world.
The Knowledge Era and the Network Society are two sides of the same coin. The Information Age emerges from their interaction. They each make each other possible, derive from the upsurge in the same basic technologies, and co-evolve.
THE CATALYST OF THE INFORMATION AGE
The catalyst of the Information Age—in both of its forms, the Knowledge Era and the Network Society—is the imploding, exponential growth of modern computing and networking technology. Computer technology is expanding at an accelerating rate from year to year. The more we have of this technology, the faster it grows. As computer technologies grow and proliferate, knowledge becomes the critical factor in production and the world becomes braided together in ever-expanding networks of rapidly changing, knowledge-based interdependencies.
These technological developments have catalyzed the advent of the Information Age:
Great headway has been made in the capabilities of personal computers.
The development of the silicon chip has greatly lowered the price of computers and furthered the diffusion of personal computers among both individuals and organizations of all kinds.
Fiberoptics have immensely augmented our ability to increase the flow of information between individuals, communities, and organizations.
Satellites have done away with the need for physical lines for communication throughout the world.
Miniaturization has made it possible to insert a small computer into all kinds of instruments, machines, and other devices.
Computers and their networks have advanced the knowledge base, learning ability, information diffusion, search and saving capabilities of societies, organizations, and individuals, exceeding all that has been done so far in all of human history.
The development of computer graphics, scanners, and programs allows the representation and modeling of objects such as the flocking behavior of birds on a computer screen.
The expansion of internal and external networks between individuals and all kinds and levels of organizations advances the real-time flow of information between them, between financial and currency markets, producers, customers, and suppliers.
The internet and the world wide web are braiding together and transforming the world into a global village economically, politically, socially, culturally, scientifically, and educationally.
This multiplying interconnection of knowledge is increasing the rate of emergence of new knowledge, in an ever-growing spiral.
The exponential growth, development, and diffusion of computers and their networks have far-reaching implications for communication as a whole, and in particular for communication in and between organizations.
The cost of communication devices has decreased immeasurably and they are used by an ever-increasing numbers of people and organizations throughout the world. There is an acceleration in the rate of communication between people and between organizations, and a sharp decrease in the importance of geographical proximity between one organization and another. There is a growth in the accessibility of communication devices, which have become more user friendly. More and more people in organizations are using cellular phones and sending fax and emails. There is a multiplication in the quantity of communication between companies throughout the world, decreasing the effects of distance, time lags, and time zones. Services and industries have much more flexibility, such as enabling a US air carrier to do its bookkeeping in Ireland. Organizations and individuals have at their disposal a greater variety of communication devices, such as fax, email, intranets, cellular and regular phones, radio, computers, billboards, mailing lists, etc. Technically, any organization or person can instantly communicate with any other person or organization in the world, wherever they are. Almost all people and organizations in all parts of the world have been tied together.
This communication revolution has ushered in the Network Society. It has networked the world with endless flows of interactive communication, tying all together in one intertwined, braided complex of interdependent entities. It has changed the quality of distance and time in human affairs. It has globalized human society and transformed the world in which we live.
THE KNOWLEDGE ERA
The impact of computers, their associated technologies, and networks is not only on communication and networking, but also on knowledge. Computers have launched the Knowledge Era. Advanced semiconductors, advanced computers, fiberoptics, cellular technology, satellite technology, advanced networking, improved human-computer interaction, digital transmission, and digital compression have all played their part in introducing the Knowledge Era (Albert & Papp, 1997).
Computers and their associated technologies have brought about the Knowledge Era in a number of ways:
They have revolutionized information and data storage.
They have completely changed the possibilities of information and data search in libraries and on the internet.
They have eased the process of knowledge development and creation.
Through the internet and CD-Roms, they have made knowledge acquisition possible for wide sectors of the population.
Through email, websites, mailing lists, and billboards, they have become a major agent of knowledge diffusion.
Through the hypertext format of the web they have helped break down boundaries between scientific disciplines.
They have given access to articles, books, and other sources of information to all who wish to use them.
Through computer simulation, they have created a new method of scientific research.
Their possession has accentuated the differences between those who have little access and those who have unlimited access to knowledge resources.
Computers and associated technology are qualitatively changing the place of knowledge in human affairs. They play no small part in the shift from energy and matter to knowledge as the major resource.
The advent of the Knowledge Era reaches expression in a variety of ways. Production based mainly on knowledge and information is becoming the main source of human wealth. The development and advance of new directions of production (e.g., biotech or new materials) depend foremost on their knowledge base. The knowledge element is becoming the crucial factor in the advance and success of production in agriculture, services, and industry. Knowledge workers of all kinds are becoming a growing sector and an important part of the workforce. Power in society is shifting into the hands of those who have control over information and knowledge. They may also control the resources of wealth. Societies with a greater ability to acquire knowledge develop at a faster rate and outstrip other societies. There is a growth in the importance of the media and others who handle and direct the flow of information. Wealth takes an informational, electronic form that is stored in cyber-memories and transferred by networks of computers. An organization's sustainability depends increasingly on the quality of its people in terms of the level of knowledge, information, and knowhow at their disposal. Societies with a greater and greater ability to acquire knowledge and information develop at a faster rate and outstrip other societies.
Knowledge is replacing other resources such as energy, capital, and materials. It is becoming the key factor in global power struggles, replacing conflicts over material and energy resources. The free flow of knowledge and information is becoming a critical factor in the successful running of an enterprise. The growth of knowledge at the end of the twentieth century outpaced all the discoveries and advances of human knowledge throughout human history (Merry, 1995).
Computers, networks, and their associated technologies have therefore played a major role in creating the conditions for the advent of the Information Age. What implications for organizations does this new age bring with it? To understand the implications for organizations, it will be necessary to make a short survey of some of the wider implications of the Information Age that are having a deep impact on organizations.
IMPLICATIONS FOR ORGANIZATIONS OF THE INFORMATION AGE
The advent of the Information Age has impinged on the world scene in many unpredictable yet eventful ways. Developments that are having a major impact on organizations include globalization, accelerated change, the crunch economy, changes in the workforce, hypercompetition, and a knowledge landscape.
There are other significant implications of the Information Age that will probably have impacts on organizations, for example the decrease in influence and autonomy of the nation state, the creation of economic blocs, the decrease in the power of the labor unions, the search for identity, the new social-time ecology that disrupts local time cycles, the accelerated making of everything into a commodity (commoditization), the emergence of the immediate experience and gratification lifestyle, the globalization of crime, etc. At this stage, their full impact on organizations is still difficult to discern and they will not be discussed here.
New information and communication technologies are revolutionizing and globalizing business and commerce at a steadily increasing rate. Networking has created a global economy in which capital and labor flow freely between countries. Developed countries' investments in other countries grow from year to year. In the US, as early as 1992, movement of capital across the border with Mexico was about 110 percent of GDP. Electronic commerce networks are changing the fundamental structure of how businesses distribute products, goods, and services, on a worldwide scale. Commerce and trade are becoming more and more international and global. Complex transnational mergers, alliances, and common ventures have become a regular occurrence. Large multinational corporations flourish in the world economy.
Globalization has developed through networks. This takes the form of a world economy, in which the economies of most nations have become increasingly tied to each other and are interdependent. Over a trillion dollars in foreign currency flows daily in exchange throughout the world. Capital flows between countries are not affected by borders. Services already make up over 20 percent of global trade. Great sums of money circulate throughout the world in electronic form. The capital and currency markets are braided together so that a fall in a major market reverberates the world over. Capital investment, services, and labor flow in increasingly greater quantities and more freely over national borders.
Online networking has accelerated the rate of change and novelty generated by the rapid flow of real-time information and goods in the globally networked world. The landscape (environment) to which human systems of all kinds must adapt is in a constant, turbulent whirl. The space and time between a product's development and customers' desire have collapsed in this time-compact economy. This is also true of new services. The lifecycle of goods, the introduction of new products, new materials and innovative services multiply at a rate that many organizations have difficulty keeping up with. This is posing an unprecedented problem of adaptation for organizations of all kinds used to a more leisurely and predictable rate of change.
Flexibilty, speed, creativity, novelty, innovation, and entrepreneurship are becoming a condition of organizational survival.
The acceleration in the rate of change and globalization has farreaching implications for society and its values. One might be that the instantaneous gratification of an experience becomes a prevalent lifestyle. Another is the acceleration in the rate of commoditization of everything, in terms of seeing and treating everything as a commodity that may be bought and sold. While these will probably affect organizations, it is still early to speculate on what their effects will be.
New and emerging technologies are driving transaction costs sharply downward. Because of this, firms need to reconfigure their organizations, increase their agility in responding to opportunities and threats presented by low-cost communications, and be able to reconfigure market strategy at short notice. In this open, networked economy, the free flow of products, services, capital, and labor over boundaries spurs the spread of hypercompetition.
The Information Age necessitates and allows globally distributed planning, design, production, assembly, transportation, and marketing across and between continents and states. Computers and other technologies allow this flow to be coordinated throughout the world.
Manufacturers, wholesalers, dealers, and end users who fail to grasp that the inventory-based model of doing business has been replaced by an information-based model will be doomed to extinction. (Segal, 1997)
The use of electronic commerce and communication is growing daily. Hypercompetitive purchasing from different countries increases year to year. Hypercompetition and the network society are leading to the incorporation of the customer into the production process, often with direct access into the producer's computers.
To some degree, hypercompetition favors those who are already strong. Those who have, get. Companies can move capital and jobs around the world, like pieces on a chessboard. Hypercompetition favors those concerns that can utilize the advantageous conditions for labor costs, taxes, services, transportation superstructure, and currency rates that may be found in different countries. Hypercompetition makes it more and more difficult for the new and weak to compete, and decreases the sustainability of those who have difficulty adapting to these new conditions. Hypercompetition bestows advantages on and facilitates the growth of multinational giant companies that straddle the world's economy. Globalized hypercompetition is a major factor behind the growing survival difficulties of many human systems.
THE CRUNCH ECONOMY
Globalization, hypercompetition, and the accelerated rate of change are some of the factors that are developing what Kevin Kelly calls the “crunch” economy. Alongside the regular economy of the Industrial Age, a new economy is developing based on a novel and different set of rules, such as positive returns and lock-in. Surviving in the crunch economy is an increasingly difficult feat that many organizations have great difficulty in accomplishing. The major victims of this new grinding economy are young and small organizations.
The new rules governing this global restructuring revolve around several axes. First, wealth in this new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown. Second, the ideal environment for cultivating the unknown is to nurture the supreme agility and nimbleness of networks. Third, the domestication of the unknown inevitably means abandoning the highly successful known—undoing the perfected. And last, in the thickening web of the Network Economy, the cycle of “find, nurture, destroy” happens faster and more intensely than ever before. (Kelly, 1997)
CHANGES IN THE WORKFORCE
The workforce in the Industrial Age consisted mainly of industrial workers, a decreasing agriculture sector, and a developing service sector. There were few women in the workforce. The Information Age has changed all this and brought about a major change in the workforce of developed countries. One of the most important changes is the growth of a new workforce of “knowledge workers,” who are generally more devoted to their professional activity than to the organizations to which they belong. There has also been a great rise in the number of women in the workforce. All of these changes have been accompanied by a sharp decline in the percentage of industrial workers (14 percent in the US); while, at the same time, there has been a rise in the number of people in the service sector. Of special interest is an enormous increase in the number of temporary and part-time workers (getting close to 50 percent in the UK). Another emerging group is those who are not part of the workforce.
In developed countries, new occupations are predominantly found in information and knowledge work. Alongside these changes in the workforce, it is possible to discern a far greater mobility between countries of both production plants and workers. From the poorer countries, many workers—at least those who are able to—are flocking to more fortunate countries and are being employed in their less desirable occupations. These trends are affecting the negotiating power and influence of the trade unions and the strength of labor movements.
A KNOWLEDGE LANDSCAPE
Knowledge has become the critical factor affecting an organization's fate. The accelerating rate of growth of knowledge in all disciplines has created a knowledge landscape for organizations. The economy has shifted from one based on energy and material goods to one based on knowledge. Knowledge has become the main source of power and the prime creator of wealth. An organization marketing its products is in effect selling concentrated knowledge. It is the uniqueness of the knowledge factor in the product that has the main effect on its value.
The ability of an organization to continue functioning and sustaining itself depends more and more on its knowledge assets and its ability to develop and use them. Organizations with an intelligence advantage are surging ahead. Becoming a learning organization or community is becoming a necessary condition for remaining sustainable in the knowledge landscape. Attaining and acting on new knowledge before its competitors may influence an organization's future.
In 1991, business investment in computers and telecommunications equipment—tools of the new economy that create, sort, store, and ship knowledge—for the first time exceeded capital spending for industrial, construction, and other “old economy” equipment. The figures, while impressive, understate investment in knowledge machines because they do not show the growing intellectual ability of industrial gear. For example, more than half of machine-tool spending in the U.S. is for equipment with built-in computer numerical controls that, often, can be connected to networks. (Stewart, 1997)
All of the above implications of the Information Age affect organizations and create a new environment for them, to which many have difficulty in adapting.
THE IMPACT ON ORGANIZATIONS
In attempting to increase flexibility in dealing with the crunch economy and hypercompetition, organizations resort to downsizing their workforce, enlarging the number of temporary workers, and outsourcing parts of their production or other processes to places with lower labor costs. While these measures may be a stop gap for tightening budgets, some of them may misfire, and in the long run they are insufficient on their own to deal with the new conditions developing in the Information Age. The long-run balance sheet of these measures is as yet unclear.
Two other trends are developing in reaction to the new conditions. The first is the creation of networks between organizations. This may take many forms, such as alliances, partnerships, strategic development of a common market, exchange of knowledge resources, joint marketing, etc. There are many successful examples of small businesses, such as the garment industries in northern Italy, creating a common network for production, development, and marketing.
A second trend is the development of new organizational structures. These are becoming more pliable and flexible, resulting in new forms such as the virtual organization and autonomous subunits.
One of the greatest challenge to organizations may be to executives and senior management. Both the Knowledge Era and the Network Society are reducing the capacity of control and increasing the requirement for distributed intelligence and accountability. The move needed is toward autonomy and self-organization and away from central direction and control. The adjustment in thinking and attitude is proving extremely difficult for many formal leaders.
DIFFICULTIES IN ADAPTING
The difficulties of adapting to a globalized, hypercompetitive, crunch economy, changing at a dizzying rate and continually demanding new knowledge, are beyond the capability of many organizations. Many do not survive for long. The impacts of the Information Age described above have led to a sustainability crisis in organizations. Breakdowns, disintegration, bankruptcies, crises, and takeovers are on the increase. Throughout the last 30 years, studies point to a growth in the rate of bankruptcies and takeovers and a decrease in the lifespan of organizations (from about 40 years to about 12 years). This is contrary to the trend of a lengthening lifespan for individuals. The hardest hit are new organizations and small organizations, most of which do not reach maturity.
It is no longer sufficient to be efficient, effective, or excellent at one point in time. Organizational health must be evaluated along a longer timescale. Few of the Fortune 500 excellent companies continue being excellent after a few years, and many may no longer be in existence. Sustainability has becoming a major criteria for evaluating the health of organizations.
A BIFURCATION AMONG ORGANIZATIONS
Human systems of all kinds and at all levels are dividing into those who can deal with the new environmental conditions and those who cannot. This bifurcation is following the cleft of those who have succeeded in adapting to the Information Age and those who have not. In economic and developmental terms, the countries of the world have bifurcated into those who are able to join the global network economy and those who have difficulty in doing so. The ability to consume commodities or to manufacture them is critical to where the network goes. Parts of Africa and Latin America are, at this stage, having great difficulty joining in. The same may be said of ethnic minorities in the inner ghettoes of US cities.
A similar bifurcation process is taking place among organizations. Survival is a matter of being able to function effectively in the new conditions of the Information Age. The complexes described above as introduced by the Information Age have created a new environment for organizations. Conditions are aggravated by the increasing interdependency and uncertainty of a networked world. Among organizations there is a process of bifurcation between those that are able to adapt to these new conditions and those who have great difficulties in adapting.
In the Network Society economy many organizations, especially the young and small, fall to the side.
The social, economic, political systems in which we live are complex and unstable; sooner or later their evolutionary paths must bifurcate. Our world, no less than the world of nature, is subject to phase changes. Bifurcations are more visible, more frequent, and more dramatic when the systems that exhibit them are close to their thresholds of stability— when they live “dangerously.” This is just the behavior our complex societies are exhibiting in the late twentieth century. (Laszlo, 1991)
These are the conditions that organizations are facing in the early stages of the Information Age.
THE NEW SCIENCES
PROBLEMS OF MODERN SCIENCE
It is probably not by chance that the New Sciences entered the world scene when modern science, after centuries of great achievements, is facing difficulties and coming close to a critical bifurcation point. The linear, mechanistic paradigm of the machine age is breaking down. Under the combined onslaught of the findings of quantum theory, Heisenberg's uncertainty principle, Godel's theorem, the discoveries of the New Sciences, autopoiesis in living systems, and other breakthroughs in science, the mechanistic paradigm that has governed science for generations is realizing its limitations.
The machine-like model of reality, which was the reigning paradigm in science, was the natural offspring of the Industrial Age. With the close of industrial civilization comes the crisis of the scientific paradigm that expressed and represented this era. The breakdown of the Newtonian scientific paradigm is part and parcel of the end of the Industrial Age and the advent of the Information Age. While still relevant in many fields, it has problems in dealing with nonlinearity, complexity, evolution, discontinuous change, and life.
The basic assumptions of the reigning scientific paradigm are now being questioned. Some of these are:
We are living in a world that is generally linear, with clear lines of cause and effect and a regular proportion between a cause and an an effect.
Things can be understood by breaking them into their parts.
Things may be studied objectively by separating the observer from the object of study.
There is a clear-cut demarcation between the objective world out there and humanity's subjective experience of it. Value-free, objective statements of truth may be made by science.
Science studies discrete objects whose boundaries can be clearly defined.
It is generally possible to measure things with exactitude, and on that basis make predictions about their behavior in the future.
Qualitative properties are reducible to quantitative ones.
Science's mission is the discovery of universal and eternally valid laws of nature.
It is always possible to make predictions with regard to a single case from the general laws of science pertaining to it.
Objects should be studied by operationalizing them and this is done by quantification of their parameters.
Falsifiability is the test of theory. The validity of an experiment can always be tested by replicating it.
Inconsistent axioms or propositions cannot both be true at the same time. (Merry, 1995)
Not only are these basic assumptions underlying modern science being questioned, it has problems solving nonlinear equations, which are in effect the equations that describe most of what is meaningful in this world. Modern science also faces great difficulty dealing with complex, multilayered, nonlinear problems in complex systems. And these are the problems with which the Information Age is confronting humanity and organizations. These are problems of change in organizations and other human systems, of different states in these systems, of how complex systems adapt to their changing environments, of evolution and selection that is not only in the hands of chance. If scientists are having difficulty with the new paradigms, imagine the difficulty of those in corporations and society at large who have no tools—conceptual or methodological— and no experience in dealing with these issues.
This was the state of science when the New Sciences entered the scene. Like the Information Age, it was and is computers, networks, and their associated technologies that have been the catalyst of the development of the New Sciences.
COMPUTERS AND THEIR NETWORKS HAVE ADVANCED THE NEW SCIENCES
It is computers and their networks that created the conditions that allowed the New Sciences to develop. They gave the New Sciences the ability to simulate and thus address and study phenomena such as nonlinearity, interconnectedness, complexity, emergence, chaos, selforganization, punctuated change, adaptation, evolution, sustainability, learning, fitness, reproduction, selection, and many other important states and processes.
The computer model ... has become a symbol of a leap the new turbulent science is taking—subordinating scientists' traditional concern with prediction, control, and the analysis of parts to a new concern for the way the unpredictable whole of things moves. (Briggs & Peat, 1989)
It is possible to study complexity in general by understanding processes that create natural complexity.
By incorporating them into the designs and programs of computers, scientists are able to simulate even more of the complexity of natural processes, most notably that of living, breathing creatures. (Coveney & Highfield, 1995)
Some of the ways in which computers have contributed to the development of the New Sciences are as follows:
Dealing with nonlinear equations. Although almost everything meaningful in the world has nonlinear properties, modern science had difficulty solving nonlinear equations, except by approximating them to a linear form. Scientists therefore tried to avoid them. The computer changed this. Equations that were to difficult to solve by hand could unfold on the computer screen in intricate forms that could never have been predicted. Scientists began to apply computer power to more and more complex nonlinear equations. The computer allowed Prigogine to study the self-organizing properties of the motion in a pot of soup. From this came the theory of self-organization, which is so relevant to organizational change.
Discerning patterns. Sets of data that appeared completely random were found to contain patterns that only a computer with its ability to iterate endlessly could reveal. The story of Lorenz discovering the chaotic attractor on his computer after his coffee break is now the legendary beginning of history of chaos in science. Gleick (1987) tells the story of Farmer and Packard trying to discern the patterns in roulette wheels assisted by a minicomputer in one of their shoes.
Computer simulation. Quite a number of the scientists working on developing the New Sciences came from a computer science background. They were able to create programs that simulated entities interacting and evolving through time under differing circumstances. They could simulate reproduction, selection and self-organization and thus simulate evolution. The great increase in computer power over the years has given scientists the ability to simulate more and more complex phenomena. The development of the science of complexity has gone hand in hand with the growth of computing power.
Computer experiments. A method of inquiry based on computer modeling opened up a new way of research that has greatly advanced the New Sciences. A new scientific method was added to mathematical theory and laboratory experiments. Computer simulation could be seen as a third way of science, between theory and experiment. Experiments could be conducted on computers, tuning some parameters and watching how this affected others over time. Brian Arthur could study economic behavior through computer experiments.
Simulating complexity. As the mathematical equations that describe complex systems are much too difficult to solve with pen and paper, the digital computer could become the major tool for conducting experiments and investigations of complex systems. Computers can feed thousands, or even millions, of numbers into equations that describe complex problems. Many of the functions of life, such as reproduction and learning, can be simulated on computers, allowing scientists to study the basic elements in the behavior of complex adaptive systems. Computer models of neural networks help us understand the complexity of the brain's function and structure.
Interdisciplinary models. Coming from a range of different sciences and wishing to simulate phenomena from different fields of study, the new scientists were trying to flesh out the principles that governed the behavior of complex adaptive systems (CAS) of all kinds, such as a flock of birds, an economy, and an organization. Over time, they were able to develop computer models that allowed them to do this. They were able to simulate the essence of CAS characteristics and behavior, without caring whether the CAS was biological, physical, or social. Physicists, economists, and organizational experts could refer to the same models. The same basic characteristics could be found in CAS as far apart as a swarm of bees, a company, and an economy.
Learning from experience. As CAS learn from experience, this enables them to adapt to changing environments. It became necessary to create agents on the computer that could learn from experience. These would have inner models, guiding their behavior, which they would try out and adjust according to experience. This could simulate reallife organizational learning. From this point, it was not difficult to study the conditions under which CAS were better able to learn. The concept of the edge of chaos, so relevant to organizational functioning, was born out of study of these conditions.
Following evolutionary and coevolutionary developments. As CAS evolved and coevolved with other CAS, a method was needed to simulate these developments over time. This can be done at great speed on computers, thus allowing researchers to follow evolutionary developments through generations. By copying features of evolution, the computer is able to tackle complex, multilevel, intractable problems, which could not be attempted before. Thus the work of Stuart Kauffman, simulating coevolution on computers, has made an enormous contribution to the understanding of organizational strategy in our tough environment.
Observing complex interactions. Complex systems consist of many agents that interact with one another, affecting one another and creating emergent properties at higher levels. Computer representation and simulation gave the researchers a way of doing this. Building blocks at one level could be simulated on the computer and it was possible to see them combine and create a higher level with emergent properties. This could represent organs in an organism or departments in a company.
Simulating different rules. The behavior of a CAS differs over time because of a change in the rules that govern the interaction between its agents. This could be simulated on a computer and the effects of different rules, such as competition or collaboration, could be studied. In this way, a computer program could capture the essence of schooling behavior in fish, or flocking behavior in birds, or competitive behaviors in organizations. Control could be learned by the program itself, which could choose between alternative strategies.
Simulating density of connections. The connection between the agents of a CAS may differ in the degree of density of connections between them. This has far-reaching effects on the system's pattern of behavior. Computer simulation allowed this to be done. The density of connections was in the background of the discovery of the edge of chaos, with its implications for learning and fitness in organizations. Networks of varying density could be studied, thus connecting the simulations with the basic concept of networks such as those created by the Network Society.
Computer tools for dealing with complexity in organizations. Within the last few years, the New Sciences have begun to produce a number of computer tools to assist in dealing with complexity. Genetic algorithms, computer programs that use ideas from evolution, can help industries in the daily scheduling of complex production lines or transportation deliveries. Another program assists industries in maintaining low inventories. A third helps in managing and keeping track of discussions that entail decisions on complex, multilevel subjects.
Computer networks develop and diffuse the New Sciences. Computer networks, email, mailing lists, billboards, the web, websites and cyberconferencing have played a major role in the development of the application of the New Sciences to organizations and the diffusion of this knowledge throughout the world. On the web, first The Chaos Network and later the Complex-M mailing lists served many organizational theorists and practitioners in applying the New Sciences to organizations and management. Discussions in these forums have helped to synergize their thinking and develop the field for practical use in organizations.
An empirical basis for organizational theory. All of the above advances in empirical research and tools of the New Sciences coalesce in the form of new emergent theories of organizational change, transformation, adaptiveness, sustainability, structure, strategy, and management. A new paradigm of organizational theory and practice is gradually beginning to take shape. It is already practiced with positive results in some organizations, such as Visa. As time goes by, it gathers strength and diffuses itself with more and more assurance in the business and corporate world and among organizational consulting firms, and gradually infiltrates the academia of management and organizational theory.
THE NEW SCIENCES ADDRESS ORGANIZATIONAL PROBLEMS
The adaptive problems of organizations in the Information Age were in a sense tailored to the New Sciences. Globalization results in a need to deal with growing complexity and uncertainty. The acceleration in the rate of change, hypercompetition, the crunch economy, the knowledge landscape, the changes in the workforce—all these create problems for organizations, which are complex systems, in changing themselves to adapt better to new environmental conditions and in changing those conditions. They are problems of how to ensure organizational sustainability in a complex, uncertain, interconnected world. They are multilayered, nonlinear, interconnected, dynamic, complex problems, with which modern science has difficulty dealing. These are the kind of problems the New Sciences are attempting to address.
It is as if the New Sciences unfold in coevolution with the Information Age, enabling organizations to confront and cope with the novel conditions of complexity born of the Information Age. On the basis of painstaking empirical work in Santa Fe and other centers, the New Sciences are developing theoretical models on the basis of which it seems to be possible to begin to understand and deal with the complex uncertain con
ditions that organizations are facing.
Chaos helps us to understand the uncertain environment and the irregular effects of nonlinearity and interdependence on organizational functioning. It focuses attention on the different states in which the organization may be functioning, some more and some less orderly and predictable. It explains why sometimes large efforts give no results and at other times a minor change leads to an organizational landslide. It helps clarify the limits of predictability of long-term strategic planning, especially in the kind of environment created by the Information Age. It brings to attention the irregular fractal forms of nature, with their characteristic of self-similarity that might be a model for an organization.
Self-organization gives a framework through which to understand organizational change. It helps conceive how all organizations have within themselves the natural tendency to renew themselves through self-organization. Unless blocked, this is the main way by which organizations adapt themselves to their changing environment. It clarifies the difficulties of trying to control a process of this kind and, in cases of organizational transformation, our inability to predict the outcomes. It brings attention to bifurcation points in the organization's history, when such changes are immanent. Such transformations generally occur when cleavages within the organization are brought to a critical point by perturbations from outside. Self-organization helps us understand that such a process cannot be planned and controlled from above in a demand/control mode. It clarifies the emergence of new organizational forms from a change in the relationship of an organization's components. Self-organizational changes follow a power law, which means that small changes take place often and major changes are extremely infrequent. All of this is most relevant to organizational change.
Complex adaptive systems form a basic roadmap for understanding organizational functioning. It helps us comprehend how an organization's behavior emerges from the interaction of its active components (agents). It describes how organizations are built in the form of levels, with one level containing the other. It clarifies how the organization can maintain a balance of change and stability by lower levels changing at a slower pace than higher levels. From CAS, it is possible to see how organizations learn by adapting schema or models through which they interact with their environment and change when needed. The way an organization adapts to its changing environment and coevolves with other entities in this environment is made clearer by dealing with organizational landscapes. This renders it possible to think in terms of different organizational strategies in different landscapes. CAS leads to thinking about external strategy in terms of networks of alliances of all sorts. The concept of the “edge of chaos” helps us sort out the mix of continuity and novelty, order and chaos, tradition and innovation, which furthers organizational learning and fitness. CAS theory guides our thinking about an organizational structure that has much more flexibility, based on autonomous subsystems and managed by stewardlike leadership that encourages autonomy, creativity, interaction, diversity, openness, and networking with the outside world.
Taking all of the New Sciences together, it is possible to discern the emergence of the fuzzy outline of a new paradigm that might serve as a base for approaching organizational issues in a world of growing complexity and uncertainty. This new paradigm is in the making, and it is to be hoped that it avoids many of the pitfalls of an organizational paradigm based on Newtonian foundations. It is an approach that appears to be able to deal with the nonlinear, far-from-equilibrium, dynamic, interconnected evolutionary complexes that organizations have to deal with. It is an approach that holds promise for organizations.
THE INFORMATION AGE, NEW SCIENCE AND ORGANIZATIONS
The relationship between the Information Age, the New Sciences, and organizations is complex. The Information Age comes on to the world scene as a result of the development of computers and computer networks. The Information Age has many far-reaching implications. Some of these bring in their wake circumstances that make it difficult for organizations to adapt. As a result, sustainability becomes a major criterion for organizational fitness.
Parallel to this, the development of computers and their networks catalyzes the development of the New Sciences. The New Sciences have within them the potential of helping organizations cope with and adapt to the conditions they face in the Information Age. They may contribute to organizational sustainability. Coveney and Highfield (1995) describe it thus:
There is a symbiosis between computing and complexity. Just as chemistry can compute, so computers can unravel the secrets of chemical complexity, ranging from the highly organized to the utterly chaotic. In turn, these chemical processes may be honed in the environment by Darwinian evolution and tempered by a series of contingent and fortuitous events, to generate the seething diversity of the living world, from wriggling bacteria to charging elephants.
To this list can be added “sustainable organizations.”