Creating Organizational Order Out of Chaos: Self-Renewal in Japanese Firms

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Central to the thinking of the contingency theorist was the concept of “requisite variety.” [ Ashby W. , An Introduction to Cybernetics (London: Champman & Hall, 1958).] In contingency theory of organization, the works which most explicitly incorporated the concept of requisite variety are, for example: Nonaka I. , “Organization and Market: Exploratory Study of Centralization vs. Decentralization,” unpublished Ph.D. dissertation, Graduate School of Business Administration, University of California, Berkeley, 1972; Nonaka I. Nicosia F. M. , “Marketing Management, Its Environment and Information Processing: A Problem of Organization Design,” Journal of Business Research, 7/4 (1979); Galbraith J. , Designing Complex Organizations (Reading, MA: Addison-Wesley, 1973); and Kagono T. , Organizational Adaptation to Environment (Tokyo: Hakuto Shobo, 1980), [in Japanese].

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The form and structure of the order through fluctuation are determined in the following manner. In a completely natural case, no prediction is possible because the form depends on the coincidental fluctuation or minute differences in initial conditions. But the probability of order formation by coincidence is so low that this formation of order does not apply to biological self-organizing systems. At least, self-organization with an autonomous objective continues to maintain a definite order or function while reacting to fluctuation selectively with the change in the environment. Therefore, even when transforming entropy from an unstable state to a non-equilibrium order, a self-organizing unit, such as a corporation, does not sway with a coincidental fluctuation. Instead, it catalyzes part of the information from the environment with the fluctuation of a component element within the organization, amplifies a certain fluctuation selectively, and forms a new structural and cognitive order.

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These observations are based on the intensive case studies in Kagono T. Nonaka I. Sakakibara K. Okumura A. , Strategic vs. Evolutionary Management: A U.S.-Japan Comparison of Strategy and Organization (Amsterdam: North-Holland, 1985); and Takeuchi H. Sakakibara K. Kagono T. Okumura A. Nonaka I. , Managing Self-Renewal of the Firm (Tokyo: Chuo Kouron, 1986), [in Japanese].

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