Home Geography The Internet as a Technology-Based Ecosystem: A New Approach to the Analysis of Business, Markets and Industries
Poised Strategy and Organisational Energy
To conclude, this chapter will now discuss the important area oforganisa- tional energy to successful growth in high technology ecosystems. Earlier in the chapter, when analysing chaos and complexity theory, the levels of stability and instability were explored in some depth. It was revealed that when organisations were too stable (in a state of equilibrium) they lost their ability to be responsive and to adapt. One of the characteristics of complex adaptive systems is that they are subject to entropy (i.e. the loss of energy and ultimate decline). Without the injection of new energy of some kind they ultimately slow down and die (Pascale 1999).
This thinking is aligned with the poised strategy approach which involves the capability of an enterprise to continually rejuvenate itself with value innovation from multiple business models. Organisational energy is the driving force for creativity and rejuvenation and results from the dynamic interactions between multiple business model activities (Davenport et al. 2006). This in turn emanates from dynamic activity relationships of the enterprise in its business ecosystem. Therefore, the need for renewal of organisational energy through the dynamic interplay of diverse business models is likened to the concepts of ‘entropy’ and ‘novelty by combination’.
The concept of entropy and its application is designed to represent the erosion in the temporary competitive advantage that a particular business model represents, resulting from the loss occurring through the voluntary or involuntary sharing of information and knowledge through memetic evolutionary pressure i.e. the business model is replicated by a rival. The concept of entropy suggests that this value will diffuse so that the ability of a particular business model to provide a competitive advantage is diminished. Healthy organisations and business systems are those that continually rejuvenate themselves, while those that fail to do so will eventually decline as their competitive position is eroded. Finally, the concept of entropy suggests that the direction of entropic decay is fixed but its timing is indeterminate largely due to ‘novelty by combination’ which can find new sources of energy value i.e. new innovations. Entropy and ecosystems theory is very important and how this relates to the ICT sector will be discussed in greater detail in Chapter 4 and Chapter 5. For example, in Chapter 5 the hydrothermal vent (HTV) ecosystem model is analysed. The energy source that drives the HTV ecosystem and prevents entropy from occurring is the circulation of mineral-rich bacteria or data (ideas) which creates new knowledge and innovation.
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