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The Biology of Business: Decoding the Natural Laws of Enterprise
Reviewed by Henry H. Beam, Western Michigan University
The Biology of Business is a collection of essays that explains the details of Complex Adaptive Systems (CAS), also known as self-organizing systems, and gives examples of how they can be applied to business situations. Edited by John Henry Clippinger III, cofounder and CEO of Lexeme, an Internet software company, the book presents a stimulating new approach to organizing for business success. It draws on interdisciplinary work on CAS done at the Santa Fe Institute, a private, nonprofit research and education center specializing in multidisciplinary projects. The book's title suggests a direct relationship to biological science, but, in fact, CAS refers to a collection of principles and methods that apply across a broad range of sciences, including physics, economics, genetics, and computer science, as well as biology.
In the book's first essay, Clippinger describes how CAS can be seen as the most recent of three major attempts to understand how markets and complex business organizations work. Over 200 years ago, Adam Smith introduced the idea of the invisible hand, meaning that when markets were left to their own workings, they would iterate toward an optimal output of goods and services in a society as if moved by an "invisible hand." In the 1960s, management historian Alfred Chandler argued that the invisible hand concept did not apply to business organizations. Instead, he thought organizational complexity could be conquered by rational analysis and the mastery of details, skills that could be learned, for example, in schools of business. But as businesses became more complex and global in the 1980s and 1990s, it was apparent that top-down planning was not working. The large central planning staffs at firms such as General Electric, General Motors,...