According to Paul Cilliers(1998), “the capacity for self-organisation is a property of complex systems which enables them to develop or change internal structure spontaneously and adoptively in order to cope with, or manipulate, their environment”. To him, different systems that share the property of self-organisation will not necessarily exhibit the same range of characteristics. A living cell can certainly be classified as self-organizing, but its internal structure will be more stable than that of an economic system of a country. An economic system is self-organizing in the sense that it changes its internal structure in response to a large number of factors (money supply, growth rate, political stability, natural disasters, etc.).
According to him, despite these important differences between various self-organizing systems with different functions, there are shared attributes that conform to the framework of the general model for complex systems (Paul Cilliers, 1998, p. 91).
In the following part, I will attempt to demonstrate the self-organization attributives of Saraswathy’s(2009) effectual entrepreneurship which are parallel to that of the 8 attributes listed by Cilliers.
General attributes of self-organizing systems include the following:
(i) The structure of the system is not the result of an a priori design, nor is it determined directly by external conditions. It is a result of interaction between the system and its environment.
What about effectuation?
Effectuation is not about top-down design, control, or delegation for an external agent. It is not based on pre-decided design or internal planning. Effectuation is the inverse of causation. Causal models begin with an effect to be created. They seek either to select between means to achieve those effects or to create new means to achieve preselected ends.
(ii) The internal structure of the system can adapt dynamically to changes in the environment, even if these changes are not regular.
What about effectuation?
The crazy-quilt and lemonade principles of effectuation correspond to this aspect. The crazy-quilt principle suggests co-evolving and co-adapting with other agents while negotiating with any and all stakeholders who are willing to make actual commitments to the project, without worrying about opportunity costs, or carrying out elaborate competitive analyses. Here, the important stress of Saraswathy is that “Who comes on board determines the goals of the enterprise. Not vice versa”. Secondly, the lemonade principle suggests acknowledging and appropriating contingency by leveraging surprises rather than trying to avoid them, overcome them, or adapt to them.
(iii) Self-organisation is not merely the result of processes like feedback or regulation that can be described linearly. It involves higher-order, nonlinear processes that cannot be modelled by sets of linear differential equations.
What about effectuation?
I argue that the entire effectuation logic is based on adapting to the potentialities of the environment by using it. This cannot be modeled by linear equations. More specifically the lemonade principle suggests acknowledging and appropriating contingency by leveraging surprises rather than trying to avoid them, overcome them, or adapt to them.
(iv) Self-organisation is an emergent property of a system as a whole (or of large enough sub-systems). The system’s individual components only operate on local information and general principles. The macroscopic behaviour emerges from microscopic interactions that by themselves have a very meagre information content (only traces).
What about effectuation?
The logic of effectuation acknowledges emergent property(not by explicitly naming it emergent property, but by implication) and its adaptive nature is part of this acknowledgment. Here also the lemonade principle needs stress because it is really the application of how to deal with surprises generated by such emergent property. Further, even though all of the five core principles( bird-in-hand, affordable-loss, crazy-quilt, lemonade, pilot-in-the-plane)are based on adaptive logic, in real dynamics we must also take into account two concurrent cycles: expanding means and converging goals. The expanding-means cycle looks for increases in resources, and the Converging goals cycle adapts the goals. “It accretes constraints on the venture that converge into specific goals that get embodied in an effectual artifact over time”(Sarasvathy et al, 2014; Sarasvathy & Dew, 2005, pp. 543–544). According to Saraswathy, “The history of new market creation is full of unusual partnerships leading to the emergence of new networks. Instead of arising naturally as a consequence of existing social networks, several of these seminal relationships began through unplanned encounters or serendipitous events”(Saraswathy, 2008, p.118)
(v) Self-organizing systems increase in complexity…..(trimmed). The increase in complexity may also form part of the explanation why self-organizing systems tend to age. Since these systems are bound by the finite constraints of the physical world, they inevitably become saturated at some point.
What about effectuation?
Effectuation acknowledges this increase in complexity. The effectual process begins in the effectual adjacent zone. It initiates the process from the means available and by doing the things the entrepreneur can do. The means will expand, goals will change, many stakeholders will join in bringing their insights to the table, etc. The effectual cycle is a continuous process that scans for changes in core dispositional realities. Further, there is no explicit mentioning of saturation and destruction in effectuation, but since the human agency is capable of awareness, solutions can be designed to an extend. As the pilot-in-the-plane principle suggest, “we can work with human agency as the prime driver”.
(vi) Self-organisation is impossible without some form of memory, a point closely related to the previous one. Without memory, the system can do no better than merely mirror the environment. A self-organizing system therefore always has a history…(Trimmed)
What about effectuation?
According to De Wolf and Holvoet(2004), in a self-organizing system,”…‘the arrangement of selected parts’ implies that the arrangement is a kind of historic memory of the process that becomes bigger when more and more parts are arranged”. In effectuation the entrepreneur start by acting in the adjacent possible. Gradually, more and more parts(agents, institutions, artifacts, etc) will be added to form part of the memory of the system. The effectual process involves a continuous cycle of going back to the dispositional factors like means, goals, and direction. This, I argue, is because the memory of a complex system is embedded in its disposition(position & propensity) itself through the ‘the arrangement of selected parts’. It is also distributed across the system. This can also be viewed as a system that augments its behavior with an associative memory of various attractors (Watson, 2011). In entrepreneurship, attractors can be many things like intentions, money, product, customers, stakeholders, vision statement, etc. This is also why Complex systems like entrepreneurship are path-dependent (Liebovitz and Margolis, 1995) and subject to Imprinting (Levinthal, 2003; Johnson, 2007) and lock-ins(Arthur, 1989).
Further, the importance of a persons history and context was stressed by Saraswathy in a recent presentation where she talked about the case of Elon Musk, and the importance of knowing his past; Watch the clip “Elon Musk himself as an artifact” Or watch directly from Twitter
(vii) Since the self-organizing process is not guided or determined by specific goals, it is often difficult to talk about the function of such a system. Self-organisation in complex systems cannot be driven by the attempt to perform a function; it is rather the result of an evolutive process whereby a system will simply not survive if it cannot adapt to more complex circumstances.
What about effectuation?
Effectuation absolutely embraces this philosophy. In effectuation, goals are driven by means and other interacting agents. This points to the coevolutionary potential of the entrepreneur and stakeholders both. According to the bird-in-hand principle, effectuation is means-driven (as opposed to goal-driven) action. The emphasis here is on creating something new with existing means rather than discovering new ways to achieve given goals. Further, Each stakeholder commitment results in new means and new goals for the venture.
(viii) Similarly, it is not possible to give crudely reductionistic descriptions of self-organising systems. Since microscopic units do not ‘know’ about large-scale effects, while at the same time these effects manifest themselves in collections that do not involve anything besides these microscopic units, the various ‘levels’ of the system cannot be given independent descriptions. The levels are in principle intertwined.
What about effectuation?
Effectuation is in a way a detour from reductionism that existed in entrepreneurship research that focused on a few isolated aspects of personality, attitude, or other personal or situational observables. This is evident from her comparison of effectuation with her doctoral advisor Herbert Simon’s concept of near-decomposable systems(Simon and Ando,1961) where she argues that “both effectuation and near-decomposability exploit locality and contingency in the evolution of the artifact. Just as effectuation creates rapidly evolving artifacts that leverage the interdependence of parts to exploit locality and contingency, so near-decomposability in the structure of such systems leverages the independence of parts to exploit the same locality and contingency. While effectuation stitches together pieces of entrepreneurial fabric into economic quilts that continue to make sense in an interactive and dynamically changing environment, ND identifies lines of ‘tearing’ so that entrepreneurship as a science of the artificial pieces can be reworked in synchrony with the overall pattern as the needs imposed by the environment change”(Saraswathy, 2008,p.165-166).
Conclusion
I conclude by proposing the need for a theory of effectual self-organization, suggesting that effectuation is an ideal praxis for every human and social complex system. It not only obeys laws of self-organization but also provides for flexible heuristics that can be intelligently applied according to the co-evolutionary potential around us.
It is high time to unshackle effectuation from entrepreneurial expertise and take it to general social science, particularly to domains like education.
This content is part of my EsoLoop Framework
REF:
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