Complexity and change – appreciating the implications for strategic decision-making
Friday, 9 March, 2012 Leave a comment
In much of management and organisational theory, it is common for people to either be ignored or to suggest that behaviour and attitudes can be assumed to be homogenous.
In almost every news programme we hear or see in recent years will be reference to two key influences that s strategic thinker must be cognisant of; markets and economics.
I have to admit to increasing frustration in the way that the behaviour of the former and the assumptions of the latter are treated as if there is no human involvement whatsoever. Indeed, there seems to be a view that the actions of human beings can be rationalised as if they are akin to laboratory rats!
Markets and economics are constructs that have been developed by, normally academics, to theorise (and rationalise) the aggregate actions of human beings. The classic assumption is that if you collect enough data you will eventually develop a sufficiently robust theory which, albeit overly-complex, will be able to cope with every eventuality.
As the most recent crisis in markets should have taught demonstrated, the vast majority of the best thinkers in the world did not foresee the global financial crisis and its consequences for markets. For those who advocate the use advanced modelling, the reply to criticism of their failure to forecast the global financial crisis is to cling onto the blind faith in their models.