MANAGING ORGANIZATIONAL COMPLEXITY
MANAGING ORGANIZATIONAL COMPLEXITY

Summary/Abstract: Control of organizations, basic building blocks of human civilization, is the principal mission of management. Organizations, as complex social, economic and technical systems, shall efficiently and effectively attain goals, corresponding to interests of influential stakeholders. The rational control of complex organizations is too demanding for human cognitive capabilities as well as for processing capacity of computers. Natural development of human brain and technical development of computers are limited by laws of nature and physics, of matter, living and dead. Two possible approaches to simplification are dealt with in this paper. The first is "hierarchy" - reducing the size of organizational units under direct control by delegation and decentralization, the second is "market" - reduction of activities under direct control through outsourcing. Some considerations to be made are explained in this contribution, based on a broad literature survey, extensive experience of authors in management, a pilot research on outsourcing and some extended research, still in progress. Many statements in this contribution shall be treated as hypothesis, to be explored in detail, confirmed or rejected. The choice of control structures and transitions among them shall be adapted to real contingencies in management of organizations.

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