Organizations can be seen as hierarchical systems with business line / unit and departmental ‘modules’ that allow execution of specific functions through specific capabilities concentrated in particular areas. This confers economies through separation of work but also leads to interpretation and filtering problems in non-standard or changing situations - interpretative blindness and inertia are fostered in organizations. Therefore, organizations need to be heterarchical. Particularly in conditions of increased complexity and speed of change we face today.
Heterarchical structures allow faster and broader interpretation of information, but also demand higher interpretative capabilities by management. Given traditional and often still normal ‘linearly’ organized procedures and structures, these interpretative capabilities determine to a large extent the success of an organization – as Edith Penrose already highlighted.
On the other hand, functional and departmental decomposability, i.e. separable modularity of an organization correlates with flexibility, adaptability and ease of change of an organization.
Does measurement of decomposability (e.g. based on Simon’s near decomposability) allow for a measurement and thus management of organizational complexity? What do you think?
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