Complexity Theory
The basic premise of complexity theory is that there is a hidden order to the behavior (and evolution) of complex systems, whether that system is a national economy, an ecosystem, an organization, or a production line. In business and finance, complexity theory places its focus on the ways a factory or company resemble an ecosystem or market, rather than a machine "whose parts and functions have been plucked out in advance," according to David Berreby. He maintains that the organization of systems is no accident, but "the results of laws of nature that we don't yet fully understand." Once understood, managers will learn that if left to function on their own, systems organize themselves, bringing about "order for free."
Proponents of complexity theory believe specific traits are shared by most complex systems. These systems are the combination of many independent actors behaving as a single unit. These actors respond to their environment, much as stock markets respond to news of changing economies, genes respond to naturalselection, or the human brain responds to sensory input. All of these "networks" also act as a single system made of many interacting components. Complexity theory attempts to explain how even millions of independent actors can unintentionally demonstrate patterned behavior and properties that, while present in the overall system, are not present in any individual component of that system.
This is a free page. This page contains 201 words. This
article contains 2,310 words (approx. 8 pages at 300
words per page).
Read the rest of this Article with our Complexity Theory Access Pass.
