Designing a Disentropic Organization
According to a dictionary, Entropy means the following.
1.In Physics, "thermodynamic quantity representing the unavailability of a system's thermal energy for conversion into mechanical work, often interpreted as the degree of disorder or randomness in the system".
2. "lack of order; attrition, gradual decline into disorder"
Disentropic, on the other-hand, means "Quality of the system to continuously renew itself" without suffering from disorder and lack of energy"
Going by the above definitions, many of the large entities - whether they are governmental, business, educational, or church - often appear to be in a constant state of entropy, especially after having grown into bigness. What are the sources of disorder, randomness and chaos? Why do people appear dull, crazy and exhausted in such organizations? Why do people sound cynical and not willing to trust anything that goes on in the name of New CEO, New Technology, Mergers, and Change Management.
Many of us would be surprised to learn that the very logic of size, power and control which brought success and stability in the past have also been the source of disorder, chaos and attrition of energy and enthusiasm in organizations. In the past, organizations were desired for their size, abundance, financial strength, and managers were celebrated for their political prowess, tactical creativity, predictable and customary style of leadership, and employees believed that people at the top are omnipotent and have all the wisdom to secure everybody's interest. Such factors, no doubt, had played significant role in ensuring profitability, efficiency, and scale-based economic advantages.
In recent times, however, as organizations are facing accelerated change and insurmountable complexity, managers and employees find themselves helpless; feel that they have no locus of control on their actions, often could not trust their fellow employees and easily get offended by sermons from corporate leaders. And whenever they experience uncertainty and instability due to accelerated change, organizational decisions are deployed with the routine logic and thumb-rule that worked well in the past. Be it change management, leadership selection, corporate strategy, and choice of financial instrument.
Pursuing a trodden path to think and decide a course of action to resolve modern organizational challenges can be an invitation for disaster. Complexity and pace of change in environments create paradoxical management tensions both from within and without. While organizations have to keep moving to stay current and cope with the dynamic changes in consumer segments, regulations, global trends and technology, they also have to deal the paradoxical tensions with regard to organization design choices, resource allocation, business strategies, stakeholder expectations, time-horizon of investments and returns, choice of technology formats, cooperative vs competitive strategies, or whether to externalize the transactions or internalize them with ownership and bureaucratic controls. Following are some systemic ways to resolve the emergent complex organizational crisis.
1) Diversity of Human and Technological Competences
To reduce the risk of entropy and sustain dis-entropic conditions, organizations have to carry requisite variety in cognitive, human and technological resources. Studies report that in turbulent market environments the large-scale organizations are less innovative. Despite the demands of efficiency and specialization, firms need to build diverse competences and cross-functional or cross-industry skills to leverage knowledge across markets and businesses. Diversity in human and technological resources will enhance the organizational learning capacity and will help renew the organization with innovations and new opportunities.
2) Procedural and Distributive Justice in the Decision Process
Resource allocation decision is a perennial challenge for any organization. One of the central aspects of deciding resource-allocation in an organization treating it as systemic activity is whether to achieve balance among the sub-units or components within the larger entity or let select-components of the system to benefit asymmetric resource advantage at the cost of rest of the organization. This dichotomy may occur due to various organizational reasons, for example, managerial discretion, strategic choices, political and power coalitions and information or data source biases/errors. Nevertheless, no organization has infinite or unlimited resources to keep all the constituencies within and without fully satisfied. Although organizations most often try to strike a balance among the competing ends, however, decision-makers often compromise to powerful coalition interests and insiders, and arrive at decisions satisfying to the power centers. Ego-driven conflicts and lack of trust - which are further tempered by decision compromises - can be a big impediment for any progress and change.
Notwithstanding the good-intent or the strategic priority or a trade-off driving the resource-allocation decision, neither the choice nor the end-result may have the optimal or most desired benefits in the absence of systemic criteria to allocation decisions. A system-driven choice, if properly designed – driven by consent and reciprocal assurances of all competing interests, stakeholders – even if it is lopsided in terms of resource allocation – will deliver the most optimal results. In other words, system-driven choice or resource allocation process will emphasize due diligence and distributive justice to all significant stakeholders in the decision process. Thus, procedural justice, social exchange norms such as reciprocity and distributive