Thank you. Thank you very much. Thank you for inviting me. I was asked to talk a little
bit about our ideas on fluidity and boundaries. I published an article with Joerg Sügo on
this subject in organisation science and it is more or less an offspring of the path
dependence research, but you will not hear the word path dependence very often this afternoon
because I focused on a different perspective, a little bit more on systems theory and less
on path dependence, but in the discussion we can refer to path dependence and perhaps
make the link a bit stronger. The starting point for these reflections is that there
was a trend in organisational theory which was very well received and which has also
this sexy flavour, fluid organisations, oh that sounds nice and who would like to be
against that? No, I'm for Richard, a traditional organisation, nobody would say that, so it
isn't in a way a theme which is appealing. So many, many scholars subscribe that circumstances
are changing rapidly and that our organisations have to redesign themselves in terms of fluidity
and continuous change in order to match these completely changed conditions. I would say this
is a statement which is broadly accepted and in a way I also accept it, but not completely as you
will see. So the rhetoric is as such, what is to be done, we have to move from hierarchies to networks,
Joerg Sügo would say yes, but he has inter-organised networks in mind and these are
inter-organised networks first of all, including inter-organised. Formal programmes and roles to
spontaneous interaction, specialisation to improvise processes, vertical lines to lateral
communication, from closed systems to dissipating boundaries and more recently we are expected to
change from building capabilities to building dynamic capabilities. So this is the well-known
rhetoric and so I was wondering whether we can actually accept this idea of fluidity. Is this not
only an appealing idea, but it is a sound theory. Can we build a sound theory on this basis? So here's
a brief recapitulation, what is meant by dynamic capabilities, which is a special aspect in which
I'm personally very much interested in. Once again, highly fragile decision-making processes,
continuous reconfiguration of resources, real-time information,
we don't need any longer such things as organisation memory, capabilities which are
chronically unfrozen and among others, Katie Eisenhart advances the idea that the new competitive
advantage is no longer build on competences as we know it, but on total adaptability or total
ability to adapt continuously. So the question is, well, these are well-known and appreciated
trends, but the question is more from a threading point of view. Can we actually let us take these
statements for serious and then ask the question, can we build a new organisational theory
on this trend or on this basic idea of fluidity? And
here are four questions. What does that mean to take the idea of organisational fluidity
for serious? That would mean, what about the organisational boundaries? Are they no longer
needed? We had this idea of boundless organisations. Is that in this direction? What about identities
are doing needs? Is there no need any longer? Because identities cannot be totally fluid.
Path dependence is about history. History matters is the slogan of path dependence research and
that means at the same time that if we are expected to ignore a history, then that means
at the same time, history-less systems. So there are discrepancies between other also prominent
streams of research in organisational theory and I had an extremely, for a while, uneasy feeling.
On the one hand, these tendencies and most scholars, organisational scholars applauded,
yes, that's the direction, we should do that. And on the other hand, these discrepancies,
reenters in identities and at the same time, fluidity. We say history matters and at the
same time, we are expected to say, don't rely on any historical events or stored memories.
This would hinder your fluidity. And yeah, fluidity without selectivity, this is already a
hint to what is coming now. Yeah, so this was the starting point for me that I had this feeling
we cannot do or study or think organisations in terms of fluidity and all the other trends
at the same time. So this is primarily a theoretical question I'm asking and not so
much yet a practical question of organizational design or things like that. How serious is the
theory? Should we advance a theory of organizational fluidity and in which direction should this go?
So I here write down from my point of view, it is a deficient logic. Why? Because
all four questions cannot easily be answered with yes. So the question is, how can we
find a better framework which discusses or which covers this problem of dynamism?
That is a problem. It would be crazy to say what they are focusing on getting
organizations more dynamic is not a relevant issue. It is definitely. But how can we conceive
of organizations in a way that we can integrate it and not just to have it as a separate stream?
As it stands for me, it is a separate completely detached stream. So people
have discussions about organization identity and then this discussion is closed and then they move
to discussions of fluidity. But the question is, these two streams do not match in any way
to each other and fit not to each other. And therefore, it is a threaded question.
Or the threaded question should be asked, how could we integrate these streams of research into a
more overarching framework of theory? And this is what we propose in this article.
Say, yes, let us try to point out a framework which is perhaps better able to cover these
relevant issues in our research. And we basically refer to systems theory and here in particular
on the system or on the thought of Nicholas Luhmann. Luhmann still has the problem that he is
well known in the German speaking community, but he is definitely not well known in the
English speaking community. We had on Monday a colleague from Harvard, professor of sociology,
and I asked him, do your students read in the PhD classes Luhmann? He said, yes, one piece,
that's more or less. But then people say, it's not easy to understand. Let's proceed to other
more interesting authors. But it's a must read. It was interesting for me.
I think usually it's Berger Luhmann.
Maybe, maybe it's Berger Luhmann. And he said, yes. So in PhD classes for
PhDs of sociology, he said one article or so. But his idea was that Luhmann primarily refers
to German literature. And this is the problem. Is it? No, that's not right. If you go for the
footnotes, it's up to 70% American or English speaking literature. That's not the problem.
He refers to your literature, but obviously, and he has been translated. I don't know whether
the translations are really good. I'm a little bit doubtful here. But so this is also not the
problem. But I don't know why. They are not really willing to study it. On the other hand,
many of them cite Foucault, Michel Foucault. And for me, Foucault is very difficult to read.
For me, much more difficult than Luhmann, because Luhmann makes it in a very systematic way.
And for me, Foucault is more associative thinking. But Foucault is well cited in the US.
So I don't know. So I said to him how he will be coming. So wait and see.
Okay. So but when I say I refer to Luhmann, then you will see that I always stop with his
theory of self-referential system. I'm not really fond of his theory of auto-oasis for different
reasons, which I will not discuss in detail here. So it's, in a way, an old-fashioned Luhmann,
what I refer to here. I have seen that you have discussed auto-oasis conception here,
but I personally am not really convinced by this at all from Luhmann. Okay. But that's also relevant
here. Luhmann starts, as most of you know, with this idea of complexity. And this is an idea which
is quite common nowadays and broadly accepted that people say, yes, that's right. We are all
dealing with a situation of complexity, and we have to get along with complexity. I think he was
very early in pointing this clearly out. So we start with complexity. And the next step is,
this is very similar to what Karl Weich, for instance, is saying. And the next step is that
we cannot live with this complexity. We have to develop special ways of getting along with
complexity because systems cannot, this is his major point, cannot react point to point.
So a system and a point in the environment. Therefore, selectivity, in his point of view,
is the major category. And he very early came up with this category, and it was, from my point of
view, his major category, which is also typical for the late Nicholas Luhmann. So this is, from my
point of view, the major category. And there is a second theme, and this is why Luhmann is so,
from my point of view, important when we discuss about fluidity and how can we conceive a fluid
system that he also very early said, selection, yes, but selections have to be stabilized. This
is only if you stabilize your selection, then you can build a system, and that means at the same
time that you build boundaries. So Luhmann starts from complexity and dynamism is, from his point of
view, very similar, very closely related. So he also starts with dynamism, not with this idea of a
rapidly changing environment. In his view, the environment is complex, and the feeling that it is
dynamic is a result of our selections, because we only select some elements, and
these elements can connect to each other in completely different ways, and that brings
always dynamism. It's an extremely abstract definition of dynamism, but it does not in any
way contradict the dynamism, the idea of dynamism, what is the starting point for most scholars of
organizational research today. So Luhmann also very early referred to this or combined this in a
very intelligent way with uncertainty, because he said the environment is complex, you have to do a
selection necessarily, and this means at the same time uncertainty, because selectivity means that
you have to ignore many possible potential connections between the elements, and that
means always uncertainty, because you can never be sure which type of connections will come next.
You can also call this Rastrisico, that's the same. You take a selection and you decide to ignore
other possible connections, but these other possible connections may come, may amount to an event.
And therefore he conceives of the decision-maker in a specific way, that he faces contingency and
ambiguity, because the decision-maker he or she, they cannot understand fully this complex
environment. So what is the first conclusion for our theory of fluidity? The first conclusion is
that we cannot talk about systems, organizations, if we do not talk about, or if we refrain from
talking about stabilization, and in terms of this theory I suggest here it is a stabilized selection.
So a pure fluidity is not possible if we think at the same time about states of stabilized
selection. Without stabilized selection there will be no, there is no system and there is no
social order, though it's even broader. We talk here about systems or organizations,
but Luhmann's theory is on, as you all know, on society in general, and he also asks of course
the question, how is social order possible, as Talcott Parsons did it, and stabilized selection
is there also the answer. So it's for all kind of order. If we ask for order in any way, then we
have to think about stabilized selection. Well, so totally flexible system is deficient from a
organizational point of view, because you cannot say an organization should be totally flexible.
This is a formal theory point of view, a let's say not possible contradiction, and
the interesting thing is now how can we, this could be a very static theory, there is a dynamic
and complex environment, and what we have to do is to select, to do our selection, to develop
selection maps, and to stabilize them. So this would be a pretty static theory. And how can we
bring fluidity to this type of thinking? And once again we can here refer to some ideas of Luhmann.
It is, it is a very, I would say, it is well thought in that way, that this initial, this
initial idea that complexity, and we do and we have to run selections in order to be able to act,
that means of at the same time that all the other selections which we have not done are still there,
so are still potentially possible, and may become critical for our, for our activities. Therefore,
all our selections, including our boundaries or identities, are always in a way precarious,
because we can never be sure whether the, whether the selection will work. This is also in a way
an evolutionary theory, then the elections you have done, which do not work, so will not be viable.
So it is, this is this efficiency part of his thinking, that there is an environment that
selects unworkable selections. This is a part of this theory. But this is interesting,
because this gives us the opportunity to conceive of, or to integrate the fluidity aspect. That means
at the same time we are always, our selections, well, but we have always to be alert, because we
cannot be sure whether this selection is perhaps too, too narrow, or too many other events are
possible, and therefore uncertainty raises incredibly, and at the same time new, new possible
potential. So it's not only that we have ignored already existing relationships, it means also that
there are many relationships which we don't see when we start our selection. So it's not just a
pattern, and we do a selection, the others are not, are ignored. It's also the conception of
complexities inherently dynamic insofar as if you do a, if there are so many elements,
connective elements, and the connections between the elements are simply not completely known.
So this is a very, for me, very interesting starting point.
So this offers us the opportunity to conceive of an organisation as a stabilising and
not fluid, but dynamic order at the same time, because the organisation is always
confronted with a result of selectivity, and this result is always not only positive,
makes the organisation workable, but is at the same time always a precarious
problematic, and so on. Therefore, it is necessary to conceive of, or to design an
organisation theory which is a dual character. On the one hand, this stabilising mechanism,
and on the other hand, this mechanism which this uncertainty part which requires organisations
to be alert. And there is a second paradox. I cannot elaborate so much on it, but it's very
interesting that reducing complexity doesn't mean that you create a very simple selection pattern.
This selection pattern has to be complex enough in order to match the complexity.
Well, it's a paradox. You reduce it, but it itself is complex, and therefore it itself
or it in turn requires reduction. So this process of complexity reduction continues on different
levels. And this, by the way, is a very important aspect for organisational theory,
because, let me cite an example, the matrix organisation. This is a means to reduce
the coordination complexity of organisations, but the matrix organisation itself is a complex means,
which again asks for reduction. So many practitioners complain about matrix theory
because it is too complex, but it was designed to reduce complexity. So we have to deal with this
paradox. The basic idea we have developed in this article is countervailing to set up
countervailing processes. On the one hand, stabilising selection, and here, by the way,
is the link to path dependence stabilising selection. Stabilisation or stabilising can
start or initiate self-reinforcing processes, which makes this stabilisation problematic or
rigid. And this is then an interesting part of path dependence or imprinting or whatever
the theory is. So this is, but that's not so much, Luhmann's point of view systems are always
functioning, so he is not so much interested in this dysfunctions, but this is the link to that.
But the interesting thing is that we have the stabilisation means at the same time,
as mentioned, structural uncertainty, and the countervailing process is that we have to
compensate for this uncertainty. And that means we do, we have to put this stabilisation,
we are aware in a kind of second order observation that this stabilisation may be
precarious, may be misleading, may be problematic for the system. So we have to set up at the same
time a countervailing mechanism which, as I put it here, reflexively monitors this stabilisation.
That's ultimately not necessary, and many organisations actually do this without calling
it reflexive monitoring. But this makes, this I think is an interesting combination. You have to
have this stabilisation on the one hand, and at the same time you need a mechanism in order to
keep the system dynamic or adaptive or whatever, at the same time to set up a countervailing,
balancing compensation mechanism which can be called monitoring. And this monitoring not only
observes the function or the dysfunction of the stabilisation, but also scans the environment for
surprises or coming crisis, which have not been anticipated when developing this election pattern.
So this monitoring, this is one of my,
the focus of my research for a long time, the monitoring process. You kindly mentioned the
1987 article, this was already on monitoring, the title was strategic control, but the basic
idea is more or less the same, so it's not dramatically new, but I'm presenting here for me.
Monitoring, this is a very important process because this monitoring process is responsible
for, if you like, the fluidity or the dynamism of the system. So we have, stabilisation is necessary,
stabilisation is precarious in many ways, so we have to compensate, we have to have stabilisation,
otherwise we cannot conceive of an organisation, but on the other hand we have to
establish second order observations in order to keep this selective system
dynamic, plastic and so on. A second aspect is important here
when we think about monitoring, then it's also relevant to ask the question,
what occurs after you have detected a discrepancy or a problem or whatever,
and in many cases it is conceived as a, including, that means at the same time change,
you see that and then you have to adapt quickly so that the discrepancy disappears. It's a little
bit too simple because first of all it's in many times very difficult to change the system
immediately, so it's an illusion that any discrepancy leads to a complete system redesign,
we have all these barriers to change and so on, but this is not what I'm focusing here.
There is of course another option, and once again Nicholas Luhmann was from my point of
view the first who pointed that clearly out, that systems always have the option to adapt or not to
adapt, he called that learning or non-learning. Some people definitely do not like the term
non-learning, for instance Linda Agouti said to me, please delete this term, this doesn't make any
sense, non-learning, we have a learning theory and it's simply impossible, so it was very difficult
to explain to her what that means. It is a deliberate act to say, no we don't want to learn here, we
keep, we are committed to this idea and we pursue it contractually in a way, so Luhmann showed this
with the law system which is in a way programmed in a non-learning way, there are many many
discrepancies, but we do not change basic laws, so this is a way of non-learning programming,
it is a little bit difficult to express and she was not convinced, but she insisted that we,
it's a little bit still in this piece, but from her point of view she said it is impossible not
to learn, people are programmed to learn and it cannot, this doesn't make sense to say a system
is expected not to learn, it was incredible for her, but from this point of view, this is a,
from my point of view this is a very interesting, interesting option that systems have to learn or
not to learn, and not to learn is in this sense not a failure, it is a rational strategy so to
speak, we keep, we have discussed this, we have seen there's discrepancy, but we discuss, we have
taken the decision not to learn, so there's a rational strategy not a failure, this is the
difficult thing, but perhaps it is the terminology which makes people so skeptical about this idea.
So in this way, monitoring does not mean at the same time permanent,
permanent transformation, then we would be again at the idea of fluidity,
so we need this non-learning aspect as well because it is an expression of the stabilizing
mechanism, if we would say yes and monitoring brings us in a permanent revolution, then we would
introduce the idea of fluidity through a backdoor, but therefore it is a necessary element if you
want to develop a different perspective to have a, to have such a mechanism as non-learning.
So two simultaneous processes, organizations have to get along with stabilization and
adaption and the interesting enough monitoring can be conceived as a second level observation,
which makes selections reflexive and ideally reversible, but even if they are reversible,
not all of them are reversible, as we know from path dependent theory, for instance, there is
then still the strategy of non-learning in order to safeguard the necessary stabilization. So this
is in a nutshell what we are proposing. We had a discussion with Katie Eisenhart, she felt
completely misrepresented, she said I'm not an advocate of a theory of fluidity, so obviously I
did not understand her books and articles, completely different, okay, and secondly she said
didn't you see that I suggest minimal structure and few simple rules as the solutions or what
you are proposing suggesting is nothing new, because this is what I have done,
but I would like to ask or I ask her the question, but she didn't respond.
Please then tell me where do this, from a theoretical point of view, this minimal
structure come from, if you advance a theory of fluidity, why do you need minimal structure and
where do these minimal structures come from, there's a different logic to have minimal structures,
she says yes this from a complexity theory, a KL theory, okay, but from an organizational theory
point of view, if we go for system theory we can say yes, it is the precondition of social order to
have a stabilizing or stabilized selection, but here it is simply a statement and then we,
in addition to fluidity we have to have the minimal structure, for me that is not a convincing
theoretical solution, I can't understand what she means, but from a theoretical point of view I don't
see the the linking between her position and of fluidity and this idea of minimal structure and
the same is true for the simple rules, and the question for me also is how can we build simple
rules and minimal structures in a world of relentlessly changing of fluidity, so where
do these stabilities come from, if we postulate at the same time a world of complete fluidity,
this is, so what is lacking from my point of view is an overarching framework
and that is what we aim to do, ambition enough, but that's what we aim to do,
so this is what I wanted to tell you and I was also asked to draw some
links, to point out some links to communication in general, this is not so problematic because
selection and communication is very closely related, so as far as I understand it, if we
go a step further, if we do not start with complexity and systems, the link in between is
the basic of interaction, first of all you need interaction, after that you can
build or think of systems, then we can start with the condition of double contingency
and lumen once again, I guess that you all are familiar with the condition of double contingency
and the famous solution has been provided by Parsons, he said
if there is indeed this circularity then we need cultural norms which make,
which build trust and makes interaction possible and lumen said now this is a simple,
too simpler way out and this is his idea that starts again with complexity and things of two
actors, so it's not only a social system theory as you know individuals are also reconstructed as
systems and the systems are
are first of all self-sustained, do not completely understand each other
but they can manage to deal with each other and how does this happen, this is his question,
well this is a reformulation of the double contingency problem, so systems
operate on the basis of selection and we have two systems and the question is
they operate their selections in a self-referential way, how can we combine or can we, how can these
systems brought together and his idea is that the two systems have to
have to get involved with each other's selection and this occurs via communication,
so communication in this theory is at the bottom of any sociality or social order and therefore
in his point of view, well selection and the make selections
connective, he is very interested to say that it is not a complete understanding,
communication can always fail, you can and not only because you are not able to communicate but
you have always the option to say no this is his position, so you get a message and you say no I
don't want this message, I know this message, so there's also failure and it's very important to
see this, so it's not so difficult if you like to include the basis of communication in this
idea, this is what I wanted to say, it's much more complex than I can say it in two minutes,
but what perhaps in the last sentence very important is that communication from lumen's
point of view is always two levels, it's always reflexive and active at the same time, that you
can always you can communicate and in most cases you also reflect on your communication at the same
time in two levels, in a two level construct, you address another person or another selection
in his point of view and at the same time you reflect your communication in terms of selection,
which parts of my system do I communicate and it is also a reflection on what the other person,
in which way the other person perceives the selection I want to communicate, so it's a
basically a two level conception, I'm not an expert on this type of thinking but
you wanted me to throw or to come up with some links and I think it's very easy because
communication, selection and stabilizing selection patterns, if you put them into an
interaction, so the interaction between two systems, social systems or the between two persons,
then communication in the fabric that makes social order possible, thank you.