Advertisement

Complexity Management

  • Glenn Parry
  • Valerie Purchase
  • John Mills
Chapter
Part of the Decision Engineering book series (DECENGIN)

Abstract

This chapter explores the nature of complexity that arises in high value contracts between large organisations. To develop a framework, a detailed case study was undertaken to identify the factors that create complexity. The case studied was the availability contract to provide depth maintenance and upgrade on Tornado aircraft between BAE Systems and the MOD. The contract, named ATTAC, is worth ~£1.3bn and the MOD engaged with BAE Systems precisely to enable them to more cost effectively manage the complex enterprise of over 22 organisations or business units that deliver this service. The work explores the operation from a range of perspectives, interviewing managers from across the organisations involved. The factors contributing to complexity are described in context and a framework is presented which clusters them into six key areas. It is proposed that this framework may then be used as a tool for analysis and management of complexity.

Keywords

Service Operation Emergent Behaviour Core Category Service Enterprise Contract Complexity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgement.

The authors would like to acknowledge and thank their sponsors within BAE Systems, Louise Wallwork and Jenny Cridland, and especially John Barrie for his support and direction. We would also like to thank the ATTAC team from both BAE Systems and RAF/MOD for their full engagement with our work. This research was supported by BAE Systems and the UK Engineering and Physical Sciences Research Council via the S4T project.

References

  1. L.A.N. Amaral, B. Uzzi, A new paradigm for the integrative study of management. Physical and technological systems. Manag. Sci. 53(7), 1033–1035 (2007)CrossRefGoogle Scholar
  2. P. Anderson, Applications of complexity theory to organizational science. Org. Sci. 10(3), 216–232 (1999)CrossRefGoogle Scholar
  3. R.C. Basole, W.B. Rouse, Complexity of service value networks: conceptualization and empirical investigation. IBM Syst. J. 47(1), 53–70 (2008)CrossRefGoogle Scholar
  4. N. Bateman, N. Rich, Companies’ perceptions of inhibitors and enablers for process improvement activities. Int. J. Oper. Prod. Manag. 23(2), 185–199 (2003)CrossRefGoogle Scholar
  5. E.D. Beinhocker, Strategy at the edge of chaos. McKinsey Q. 1, 25–39 (1997)Google Scholar
  6. E. Bonabeau, Predicting the Unpredictable. Harv Bus Rev 80(3), 109–116 (2002)Google Scholar
  7. J. Boulton, P. Allen, Complexity perspective, in Advanced strategic management: A multi-perspective approach, vol. 14, 2nd edn., ed. by M. Jenkins, V. Ambrosini, N. Collier (Palgrave Macmillan, Hampshire, 2007), pp. 215–234Google Scholar
  8. A. Bryman, Social research methods, 2nd edn. (Oxford University Press, Oxford, 2004)Google Scholar
  9. P. Cilliers, Complexity and postmodernism: Understanding complex systems (Routledge, London, 1998)Google Scholar
  10. P. Cilliers, What can we learn from a theory of complexity? Emergence 2(1), 23–33 (2000)CrossRefGoogle Scholar
  11. R.L. Daft, Organisational theory and design (West Publishing, St. Paul, 1992)Google Scholar
  12. R.L. Daft, Understanding the theory and design of organisations (Thomson South-Western, Mason, 2007)Google Scholar
  13. K. Dooley, A nominal definition of complex adaptive systems. Chaos Netw 8(1), 2–3 (1996)Google Scholar
  14. J.H. Dyer, Collaborative advantage: Winning through extended enterprise supplier networks (Oxford University Press, Oxford, 2000)Google Scholar
  15. B. Edmonds, Pragmatic holism (or pragmatic reductionism). Found. Sci. 4, 57–82 (1999)CrossRefMathSciNetGoogle Scholar
  16. K. Eggleston, E.A. Posner, R.J. Zeckhauser, Simplicity and complexity in contracts. John M. Olin Program in Law and Economics Working Paper No. 93, University of Chicago Law School. doi:  10.2139/ssrn.10.2139/ssrn.205391, 2000
  17. E. Elliot, L.D. Kiel, Nonlinear dynamics, complexity and public policy: Use, misuse, and applicability, in Chaos, complexity and sociology: Myths models and theories, ed. by R.A. Eve, S. Horsfall, E.L. Lee (Sage, London, 1997)Google Scholar
  18. J. Fitzsimmons, M. Fitzsimmons, Service management: Operations, strategy, and information technology (McGraw-Hill/Irwin, New York, 2005)Google Scholar
  19. D.K. Foley, Barriers and bounds to rationality: Essays on economic complexity and dynamics in interactive systems (Princeton University Press, New Jersey, 1996)Google Scholar
  20. J. Galbraith, Designing complex organisations (Addison Wesley, Reading, 2002)Google Scholar
  21. J. Heineke, M. Davis, The emergence of service operations management as an academic discipline. J. Oper. Manag. 25, 364–374 (2007)CrossRefGoogle Scholar
  22. M.C. Jensen, W.H. Meckling, Theory of the firm: Managerial behavior, agency costs and ownership structure. J. Financial Econ. 3(4), 305–360 (1976)CrossRefGoogle Scholar
  23. P. Joskow, Asset specificity and the structure of vertical relationships: Empirical evidence. J. Law Econ. Organ 4(1), 95–117 (1988)Google Scholar
  24. J. Kao, Jamming: The art and discipline of business creativity (Harper Collins, New York, 1997)Google Scholar
  25. A. Kates, J.R. Galbraith, Designing your organization (Wiley, New York, 2007)Google Scholar
  26. J. Kim, D. Wilemon, Sources and assessment of complexity in NPD projects. R&D Manag. 33(1), 15–30 (2003)CrossRefGoogle Scholar
  27. I.R. Macneil, Contracts: Adjustment of long-term economic relations under classical, neoclassical and relational contract law. Northwest. Univ. Law Rev. 72, 854–905 (1978)Google Scholar
  28. J.F. Mills, J. Schmitz, G.D.M. Frizelle, A strategic review of supply networks. Int. J. Oper. Prod. Manag. 24(10), 1012–1036 (2004)CrossRefGoogle Scholar
  29. J. Mills, V. Crute, G. Parry, Enterprise imaging: Visualising the scope and complexity of large scale services. QUIS 11—The service conference, June 11–14, Wolfsburg Germany, 2009Google Scholar
  30. J. Mills, G. Parry, V. Purchase, Public sector out-sourcing: Understanding the client’s aspirations and fears. Proceedings of the 11th International La Londe Conference in Service Management, May 25–28 (The Institut d’Administration des Entreprises (IAE), La Londe Les Maures, France, 2010)Google Scholar
  31. H. Mintzberg, The strategy safari (Prentice Hall, Harlow, 2002)Google Scholar
  32. P.A. Murmann, Expected development time reductions in the German mechanical engineering industry. J. Prod. Innov. Manag. 11(3), 236–252 (1994)CrossRefGoogle Scholar
  33. National Audit Office, Transforming logistics support for fast jets. Available at: http://www.nao.org.uk/publications/nao_reports/06-07/0607825.pdf. Accessed Feb 2010 (2007)
  34. Ng I, Ding X, Outcome based contract performance and co-production in B2B maintenance and repair service. Dept of Management Discussion Paper Series, University of Exeter, 2010Google Scholar
  35. T. Ohno, Toyota production system: Beyond large-scale production (Productivity Press, New York, 1988)Google Scholar
  36. R.T. Pascale, Surfing the edge of chaos. Sloan Manag. Rev. 40(3), 83–94 (1999)Google Scholar
  37. C. Perrow, Normal accidents: Living with high risk technologies (Princeton University Press, NJ, 1999)Google Scholar
  38. M. Pighin, An empirical quality measure based on complexity values. Inf. Softw. Technol. 40(14), 861–864 (1998)CrossRefGoogle Scholar
  39. L. Poppo, T. Zegner, Do formal contracts and relational governance function as substitutes or complements? Strateg. Manag. J. 23(8), 707–725 (2002)CrossRefGoogle Scholar
  40. C.K. Prahalad, V. Ramaswamy, The new frontier of experience innovation. MIT Sloan Manag. Rev. 44(4), 12–18 (2003)Google Scholar
  41. S. Sandström, B. Edvardsson, P. Kristensson, P. Magnusson, Value in use through service experience. Manag Serv Qual 18(2), 112-126 (2008)CrossRefGoogle Scholar
  42. S.E. Sampson, C.M. Froehle, Foundations and implications of a proposed unified services theory. Prod. Oper. Manag. 15(2), 329–343 (2006)CrossRefGoogle Scholar
  43. C. Schlick, E. Beutner, S. Duckwitz, T. Licht, A complexity measure for new product development projects. Proceedings of the 19th international engineering management conference 2007 (IEEE Publishing, Austin, 2007), pp. 143–150Google Scholar
  44. G. Schuh, A. Sauer, S. Doering, Managing complexity in industrial collaborations. Int. J. Prod. Res. 46(9), 2485–2498 (2008)MATHCrossRefGoogle Scholar
  45. C. Seale, G. Gobo, J.F. Gubrium, D. Siverman, Qualitative research practice (Sage, Thousand Oaks, 2004)Google Scholar
  46. H.A. Simon, in The architecture of complexity. The sciences of the artificial (MIT Press, Cambridge, 1981), pp. 192–229Google Scholar
  47. R. Taylor, C. Tofts, Managing complex service systems (Springer, New York, 2009)Google Scholar
  48. S.L. Vargo, R.F.L. Lusch, Service-dominant logic: Continuing the evolution. J. Acad. Mark. Sci. 36(1), 1–10 (2008)CrossRefGoogle Scholar
  49. R.P. Weber, Basic content analysis (Newbury Park, CA, 1990)Google Scholar
  50. J. Whitty, H. Maylor, And then came complex project management (revisited). Int. J. Proj. Manag. 27(3), 304–310 (2009)CrossRefGoogle Scholar
  51. R.K. Yin, Case study research: Design and methods, 3rd edn. (Sage, Thousand Oaks, 2003)Google Scholar
  52. H. Youn, H. Jeong, M. Gastner, The price of anarchy in transportation networks: Efficiency and optimality control. Phys. Rev. Lett. 101(12). doi:  10.1103/PhysRevLett.101.128701, 2008

Copyright information

© Springer-Verlag London Limited  2011

Authors and Affiliations

  1. 1.Bristol Business School, Frenchay CampusUniversity of the West of EnglandBristolUK

Personalised recommendations