EMOTIONS AND ORGANIZATIONAL COMPLEXITY: A SYSTEMS THEORETIC PERSPECTIVE

The overwhelming complexity of the environment has been a concern of workplace research for decades. Modern systems theory [e.g. Luhmann, 1995] allows explaining mechanisms that might support coping with complexity, and thus provide an explanation for increased resilience and performance. Systems are defined by their differentiation from the environment [Luhmann, 2011]. A firm is a system and thus a bundle of elements, such as capabilities and resources, interconnected through processes of communication which can be delineated from other objects of the environment. Since Ashby’s [1956] seminal work in cybernetics, it is well known that variety in the form of a set of possibilities and decision options supports dealing with environmental complexity. The more options available to an organization, hence the more complex an organization is itself, the more capable is it to deal with environmental complexity. We argue that the deployable complexity of the system may be reduced or increased according to emotional climate in a firm. Emotions are “modes of relating to the environment: states of readiness for engaging or not engaging in interaction with the environment” [Frijda & Mesquita, 1994].

We assume that there is a discrepancy between potential and deployed capabilities that might be explained by the set of available and the list of deployed resources [Bogodistov, 2013]. This deployment or activation might be influenced by affective states of employees. The latter might disconnect resources from internal organizational structures. Negative emotions provide more accurate and realistic perceptions of available resources [Alloy & Abramson, 1979; Ashkanasy, 2003]. Employees thus might notice more resources including ways of their applications. Positive emotions, on the contrary, might restrict this capacity [Hodgkinson & Healey, 2011] (see Figure 1).

Proposition 1: Negative emotions of employees might increase organizational capacity to notice environmental opportunities and threats.

Proposition 2: Positive emotions of employees might decrease organizational capacity to notice environmental opportunities and threats.

Nevertheless, negative emotions might lead to withdrawal behavior [Beaumont, 2008; Davidson & Irwin, 1999], which may result in the fact that employees might omit certain resources or relationships, thus weakening or avoiding the deployment or creation of internal structures. Positive emotions, on the other hand, cause approach behavior [Beaumont, 2008; Davidson & Irwin, 1999] which might result in a willingness to deploy firm’s resources (see Figure 2).

Fig. 1. Options discovered

Fig. 2. Options deployed

Proposition 3: Negative emotions might restrict organizational capacity to cope with environmental challenges.

Proposition 4: Positive emotions might strengthen organizational capacity to cope with environmental challenges.

We, therefore, consider emotions a double edged sword. Positive emotions might be more efficient than negative regarding the deployment of resources. However, the opposite is the case for recognizing of environmental challenges and of an available set of resources and opportunities for their deployment.

Moreover, the imbalance of emotional climate in a firm might enforce path dependency [Sydow et al., 2009] of organizational routines. Employees might prefer to work with specific resources or engage in specific relationships only to avoid ‘uncomfortable’ resources and therefore constitute robust organizational paths (see Figure 3).

Proposition 5: Emotions moderate the interpersonal relations and thus the appearance of path dependencies in a firm.

Fig. 3. Path-dependency

We argue that emotions are a function of inter-individual intervention, i.e. managing emotions. Consequently, emotions not only affect the individual level, but also have an impact on employees’ interconnections and organizational routines. We aim to identify mechanisms that can unlock latent potential in individuals and firms, while supporting both, employee well-being and the firm’s ability to deal with complexity. In contrast to existing research on well-being and organizational performance, which often assumes a static environment in which firms are characterized by efficiency considerations [see Wooten & Crane, 2004 for one exception], we set focus on dynamic and thus complex environments.

Proposition 6: Inter-individual interventions for emotion eliciting or suppressing might help a firm to exist in dynamic and complex environments.

Nowadays markets rapidly become very dynamic due to growing competition. Since systems have to reduce environmental complexity to be able to exist [Luhmann, 1995], blind spots in coping of the system and its environment might increase [Burisch & Wohlgemuth, 2013]. In order to deal with these blind spots, firms have to develop new coping mechanisms. We argue that management of emotional climate in organizations is one of the available instruments with which firms can increase their abilities to notice environmental challenges and deal with them. Unfortunately, affective states of employees (emotions, feelings, and moods) are a double edged sword which can bring either effectiveness or inability to deal with environmental challenges. The task of academic research is to define situations and ways to elicit or suppress employees’ emotions and explain consequences of such actions.

The list of references:

Alloy L. B. Judgment of Contingency in Depressed and Nondepressed Students: Sadder but Wiser? / L. B. Alloy, L. Y. Abramson // Journal of Experimental Psychology: General. – 1979. – № 108(4). – Р. 441–485.
Ashby W. R. An Introduction to Cybernetics / W. R. Ashby. – N.-Y. : Wiley, 1956.
Ashkanasy N. M. Emotions in Organizations: a Multi-level Perspective / N. M. Ashkanasy // Dansereau F., Yammarino F. J. (Eds.) Research in Multi-Level Issues. – 2003. – Р. 9–54.
Beaumont J. G. Introduction to Neuropsychology / J.G. Beaumont – 2 ed. – N.-Y. : Guilford Press, 2008.
Bogodistov, Y. Multilevel model of dynamic capabilities / Y. Bogodistov // Hold at Annual Conference of the European Academy of Management EURAM. – Istanbul, 2013.
Burisch R. Blind spots of dynamic capabilities: A system theoretic perspective / R. Burisch, V. Wohlgemuth // Hold at European Academy of Management (EURAM). – Istanbul, 2013.
Davidson R. J. The Functional Neuroanatomy of Emotion and Affective Style / R.J. Davidson, W. Irwin // Trends in Cognitive Sciences. – 1999. – №3(1). – Р. 11–21.
Frijda N. H. The social roles and functions of emotions / N. H. Frijda, B. Mesquita / Emotion and culture: Empirical studies of mutual influence – Washington, D.C. : American Psychological Association, 1994. – Р. 51-87.
Hodgkinson G. P. Psychological Foundations of Dynamic Capabilities: Reflexion and Reflection in Strategic Management / G. P. Hodgkinson, M. P. Healey // Strategic Management Journal. – 2011. – №32(13). – Р. 1500–1516.
Luhmann N. Social Systems / N. Luhmann. – Stanford : Stanford University Press, 1995.
Luhmann N. Einführung in die Systemtheorie / N. Luhmann. – Heidelberg : Auer, 2011.
Sydow J. Organizational Path Dependence: Opening the Black Box / J. Sydow, G. Schreyögg, J. Koch // Academy of Management Review. – 2009. – №34(4). – Р. 689–709.
Wooten L. P. Generating Dynamic Capabilities through a Humanistic Work Ideology / L. P. Wooten, P. Crane // American Behavioral Scientist. – 2004. – №47(6). – Р. 848–866.