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A Systems View of Strategy - Complexity, Chaos Theory and Poised Strategy

Abstract Chapter 3 analyses some alternative approaches to strategic thinking based upon complexity and chaos theory and the concept of ‘poised’ strategy. It explains the nature and origins of systems theory and complexity theory and how poised strategies and business model innovation play an important role in modern business ecosystems. The extent to which this relatively new paradigm is appropriate for the analysis of the modern ICT sector is also considered and how it contrasts with the classical Newtonian approach that was analysed in Chapter 1 and Chapter 2 of the book. The chapter, therefore, considers what complexity theory can offer that conventional rational models cannot.

Keywords Chaos • Complexity • Bounded instability • Equilibrium • Entropy • Poised strategy

Introduction

Chapter 3 explores a number of alternative approaches to strategic thinking based upon complexity and chaos theory (Waldrop 1994) and the concept of poised strategy (Davenport et al. 2006). It starts by explaining the nature and origins of systems theory (Bertalanffy 1972) and complexity theory (Stacey 2007) before considering how poised strategies and business model innovation play a central role in © The Author(s) 2017

N. Walton, The Internet as a Technology-Based Ecosystem, DOI 10.1057/978-1-137-60077-6_3

generating energy in modern business ecosystems. The relevance and appropriateness of these theories for the analysis of the modern ICT sector is also considered and how it contrasts with the classical Newtonian approach (McMillan 2008) that was analysed in Chapters 1 and 2 of this book.

Following the financial crash of 2008, Alan Greenspan (Chairman of the Federal Reserve of the United States) highlighted the inadequacy of models based upon conventional Newtonian thinking. He pointed out that they had been too simple to capture the full array of governing variables that drove economic reality (Greenspan 2008: 9). This chapter will now consider what insights complexity theory can offer that conventional rational models have so far failed to provide.

 
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