1. The dynamics of a contingency theoretical system
Intro
The dynamics of a contingency theoretical system
Peter Klaas
Dept. of Organization & Management
PhD Colloguium
22. System Dynamics Conference
Oxford, UK
July 25, 2004

2. The Vensim Model (just to keep you guys happy)
Agenda
Agenda:
(Discussion topics)
Quick intro to Structural Contingency Theory (SCT) & the information processing view
RP & RQ
Research Design
The Vensim Model (just to keep you guys happy)
Tentative discussion topics

3. What are the limitations to using SD in organizational dynamics?
Discussion topics
What are the limitations to using SD in organizational dynamics?
How should axiomatic SD models be validated?
What would be typical critiques of the research design, from non SD – researchers/reviewers?
What would be the critiques from people within the SD community?

4. Which structure will yield maximum performance?
Quick intro 1
SCT part of Organization Theory (OT)
Which structure will yield maximum performance?
This is Contingent upon business context!
Hence, research strategy is to:
Identify relevant structural variable(s)
Identify relevant contextual variable(s)
Identify performance variable
Show which combinations of (1) and (2) maximizes (3)

5. (Contextual variable)
Quick intro 2
Typical SCT statement:
2 by 2’s or X by X’s
Structural
Variable
Centra-
lization
Decen-
tralization
Environment
(Contextual variable)
Stable
FIT
Misfit
Unstable

6. INFORMATION PROCESSING VIEW
Quick intro 3
Resulting design rules in the form of:
IF stable environment THEN centralization etc.
SPECIAL BRANCH OF SCT IS THE
INFORMATION PROCESSING VIEW

7. ”Structure” is an information processing system
Quick intro 4
”Structure” is an information processing system
(I) Different structures have different processing capacity
(II) Different environments demand different amounts of information processing
Resulting design rule:
Information processing capacity must equal the demand

8. Info Processing Capacity Demand for info processing
Quick intro 5
Typical SCT statement in the info proc view form:
Info Processing Capacity
Low
High
Demand for info processing
FIT
Misfit

9. SCT research is based on classical comparative analysis methodologies…
Quick intro 6
SCT research is based on classical comparative analysis methodologies…
….assuming equilibrium conditions
However,
in today’s business environments, equilibrium is not the rule, but the exception
This observation constitutes the thesis RP

10. RQ: What are the design rules under terms of disequilibrium?
RP & RQ 1
RQ: What are the design rules under terms of disequilibrium?
example….

11. RP & RQ 2

12. RP & RQ 3

13. Not only must the design rule consider new variables, but…
RP & RQ 4
Not only must the design rule consider new variables, but…
…the model changes from static to dynamic

14. Design for axiomatic type research
Research design 1
Design for axiomatic type research
Develop theoretical model from literature
Identify necessary and sufficient variables
Identify causal relationships
Identify expected behavior
Build computational model
Vensim PRO 5.3 (optimizing algorithm)

15. Variables & relationships deduced from theory (documentation)
Research design 2
Validate comp model
Variables & relationships deduced from theory (documentation)
Model behavior as expected from theory (base runs)
Sensitivity analysis
Build simulation plan, run simulations
Strategy: optimize financial performance variable
Analyze results
Derive the “if – then” statements
These theoretical propositions constitute answers to RQ

16. Model 1

18. How should axiomatic SD models be validated?
Discussion topics
What are the limitations to using SD in dynamics of organizational structure?
How should axiomatic SD models be validated?
What would be typical critiques of the research design, from non SD – researchers/reviewers?
What would be the critiques from people within the SD community?