Fierce competition and fast-growing technology in today’s chaotic market environment, which result in fluctuating customer demands and expectations and shortening product and technology life cycles, force organizations to establish mechanisms providing them with the ability to adapt to the environment in which they operate. Complex Adaptive Systems (CAS), which explain the necessary conditions under which complex and dynamic behavior will occur in organizations organizations to develop their adaptive capabilities in general, and innovation and new product development capabilities in particular. Based on this, our conceptual paper aims to provide an insight into the organizational capabilities for sustainable innovation and new product development from the perspective of CAS theory. With this aim, we explain the mechanisms of CAS which are relevant with the new product development efforts in organizations, but rarely have been empirically proved to leverage adaptive capabilities of organizations by previous research in the innovation and new product development literature.
Keywords: Complexity theoryComplex Adaptive Systems (CAS)CAS dynamicsCAS mechanismsinnovation
Complexity theory, which has extensively found place in natural sciences as a research stream, also has attracted many researchers and practitioners in social sciences. There is a considerable number of research based on complexity theory in a wide range of areas in social sciences, from public administration to education and health care and service delivery (Bryne & Callaghan, 2013). Organizational research based on CAS theory has a relatively recent history. After 1960s, with the expansion of open system approach, organizational researchers brought a “complexity” lens into their studies and complexity has been viewed as a “structural variable that characterizes both organizations and their environments” by organizational theorists (Anderson, 1999).
Unpredictable market conditions, resulting from fast-developing technology and ever-changing customer demands and expectations, force firms to adapt themselves to their external environment. Adaptation to rapidly changing market conditions requires firms to improve their innovation and new product development capabilities. CAS theory helps us to understand the dynamic mechanisms (e.g. behaviors, processes, and practices) fostering organizational capabilities for innovation.
Organizational studies in the framework of CAS theory mostly concentrate on leadership context (Schneider & Somers, 2006; Uhl-Bien & Marion, 2009; Uhl-Bien et al., 2007, Marion & Uhl-Bien, 2001; Lichtenstein & Plowman, 2009). There are also studies in innovation literature (such as Van de Wetering, Mikalef, & Helms, 2017; Garud et al., 2011; Harkema, 2003), and particularly, in new product development context (McCarthy, et al., 2006; Iñigo & Albareda, 2016) but very few of them are empirical studies. In this conceptual paper, our aim is to provide an insight into innovativeness of firms which has been rarely addressed from the perspective of CAS theory in the organizational research. Based on this, we first define what a CAS is and explain what makes a system CAS. Then, we explain CAS dynamics which have been considered as relevant with new product development efforts in organizations by previous studies.
Literature Review and Theoretical Framework
What a Complex Adaptive System Is
Complex Adaptive Systems (CAS) theory is one of the most important research topics that has been studied under the framework of complexity theory. CAS include “heterogeneous agents which inter-relate with each other and with their surroundings and are unlimited in their capabilities to adapt their behaviour as a result of their experience”. In other words, a complex system consists of a number of different agents, of which performance relies on the others, and the system as a whole (Chiva-Gomez, 2004).
Holland (1992) explains the attributes which make a system complex and which make it adaptive exemplifying the immune system of human body. An immune system includes antibodies which continuously fight against a number of antigens (microorganisms such as bacteria) at “an almost infinite variety of forms”. The immune system lack of time to identify each “invader” and store all information pertaining to each invader. Thus, “the immune system must change or adapt (“fit to”) its antibodies as new invaders appear. It is this ability to adapt that has made these systems so hard to simulate.” On the other hand, the immune system must identify itself not to use its antigens to fight against the cells of the body itself. Other complex adaptive systems, which include “a kaleidoscopic array of simultaneous interactions”, like the immune system of a human body, pass through similar self- identification and adaptation process (Holland, 1992).
Holland (1992) proposes three common characteristics of complex adaptive systems, which are
Innovation and Complex Adaptive Systems
Although recently, organizational innovation from a CAS perspective has become a research stream gaining momentum since “NDP efforts are complex, iterative, non-linear, and co-evolutionary in today’s turbulent and competitive environmental conditions” (Akgün et al., 2014b, p.22). However, the enabling conditions of CAS, which are defined as “the necessary settings in which complex behaviors and dynamics occur in product development efforts” have been rarely addressed in new product development researches to date.
Uhl-Bien et al. (2007) propose a conceptual model (Figure
The conceptual complexity leadership model is shown below in Figure
Akgün et al. (2014a) adapted the model proposed by Uhl-Bien et al. (2007) to the innovation context. They define emergence, which is argued to have a mediator role in the relationship between context variables and firm product innovativeness, as “coordinated actions and interdependency”. They propose that emergence fosters an organization innovativeness since it 1) facilitates knowledge (both “tacit” and “complex”) sharing among people, 2) enables people to make better product development decisions, and 3) increases the new product success through numerous iterations on new product development process in both “self-redesign” and “incremental adjustments”.
Context variables, which create “an interactive ambiance that generates a product development context’s dynamic character” are proposed as 1) networks of interaction, 2) conflicting constraints, 3) patterns of tension, 4) dynamic rules of action, 5) dynamic feedback, and 6) rapidly changing environmental demands (Uhl-Bien, 2007; Akgün et al., 2014a).
An organizational culture supporting
Patterns of tension emerges in two forms in CAS context – heterogeneity (referring to an environment in which diversity is gained acceptance) and injected pressure (referring to managerial pressures, such as diverting resources to creative tasks). These two forms of patterns of tension are also proposed to have a two-sided effect on coordination and interdependency in an organization: A broad array of practices results in “a synthesis of a variety of viewpoints and new ideas for emergence”. On the other hand, too much heterogeneity may cause people to have a sense of losing control of their duties since they become exposed to a number of different viewpoints and high levels of injected pressure may cause people to focus on performing to meet managerial appeals rather than their task requirements. (Akgün et al., 2014b).
Beyond the context variables, the mechanisms of CAS allow us to understand the “dynamic behaviors, processes and practices that occur within the product development efforts to leverage firm innovativeness” (Akgün et. al, 2014a, p.19). Akgün and his colleagues, in their empirical study based on Uhl-Bien et al. (2007), propose four dynamics of CAS, which are namely strategic resonance, accreting nodes, pattern formation, and catalytic behavior.
Conclusion and Discussions
This study provides a theoretical framework for firm innovativeness from a complexity science perspective. The point of view from CAS theory enables us to understand the dynamic mechanisms fostering adaptive capabilities of firms, in general, and new product development efforts, in particular. Based on the study of Uhl-Bien et al. (2007) on Complexity Leadership Theory, which mostly adapted by many researchers in organization studies, we explain context elements and mechanisms of CAS to provide an insight into stimulus of product innovation. After explaining four mechanism of CAS, we present arguments of scholars (Akgün et al., 2014b) on how each CAS mechanism leverages new product development efforts of firms.
This conceptual framework for the dynamics of innovation process from the perspective of CAS theory help us to gain insight into context elements and dynamic mechanisms of innovation process. However, new product development literature on CAS theory lack of empirical evidence. There is very limited number of empirical studies investigating the relationship between context variables and dynamic mechanisms of CAS and adaptive capabilities of firms in general, new product development efforts of firms in particular. Therefore, empirical studies on CAS mechanisms may be worthwhile for future researches.
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20 December 2019
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Management, leadership, motivation, business, innovation, organizational theory, organizational behaviour
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Etlioğlu*, T., Akgün, A. E., & Keskin, H. (2019). Firm Innovativeness From The Complex Adaptive Systems Theory Perspective: A Conceptual Framework. In C. Zehir, & E. Erzengin (Eds.), Leadership, Technology, Innovation and Business Management, vol 75. European Proceedings of Social and Behavioural Sciences (pp. 211-217). Future Academy. https://doi.org/10.15405/epsbs.2019.12.03.18