Punctuated equilibrium is a much-used metaphor in the new
economics. In nature it occurs when periods of relative calm and stability are
interrupted by violent, stormy interludes. These often result in a dramatic
restructuring and change – even, periodically, in the destruction and
replacement of plant or animal species. Stephen Jay Gould, the writer of
popular paleontological history has illustrated from his studies of fossils how
evolution came about largely through such big, traumatic events, rather than by
the Darwinian interpretation of gradual incremental adaptation.
What such traumatic events do is move the patterns of growth
closer to the ‘edge of chaos,’ a term originally coined to describe the areana
in nature where revitalization takes place, caught between equilibrium and
chaos. Hurricanes, typhoons and catastrophic forest fires are simple examples of
traumatic events that operate on the edge of chaos; violent weather changes
disturb the oceans and the atmosphere, cleaning and replenishing them with oxygen,
carbon dioxide and other nutrients as well as clearing out dead or insecure
plant life. “Major environmental disturbances such as asteroid impacts or
radical shifts in weather can trigger the proliferation new species and accelerated
adaptation within species,’ writes pascale in his latest book. Surfing the Edge
of Chaos, based on his Santa Fe work. Fires as ecologists find that a stretch
of prairie or savannah is essential for the regeneration of biodiversity. Some
plants typical of the habitat are simply doing not reappear in the controlled
re-growth, and the reason has proved to be the absence of fire.
Relating these findings to business activities offers some
obvious parallels: booms and busts in the stock market, or massive technology
shifts that put old- economy models under severe strain and soon break them and
reinvent them, or render them obsolete. Not surprisingly, the edge of chaos has
become a phrase beloved of the business guru industry; though it is often just
another way of describing the forces that periodically unnerve old, complacent
industries. Not long ago, market hurricanes in the shape of ‘category killer’ entrants
such as Wal- Mart and Toys ‘‘r’ us sent traditional retailers into a tailspin
from which many had barely started to recover before they were hit again by the
Force 12 arrival of e-commerce. Apple’s personal computer was a business
earthquake that erupted under the mighty market leader IBM, forcing radical
change in an organization that had been accustomed to decades of dominant
equilibrium.
Every standard text on change advocates radical, in the
sense of root- and- branch, treatment, rather than allowing resistance to build
and undermine the process. Niccolo Machiavelli, the Renaissance master of
manipulative diplomacy, understood this when he advised the new rulers of a
captured state to take the most difficult, ruthless decisions first.
Historically, says Eric Beinhocker, ‘the equilibrium view of
strategy has focused on how to be a good competitor, not a good evolver. There
are tensions and trade-offs between the two. Yet the most successful companies
do not simply strike a middle ground, but manage to excel at competing and
evolving simultaneously, despite the tensions. Among the essentials of
successful evolution is what Beinhocker describes as ‘being both focused and
robust’, or in another academic paper, as populations of robust strategies’.
This phrase relates to nature’s tendency to foster a flock
of alternative survival plans in order to test the fittest for any future
environment. In business terms, the Californian venture capital enterprise
idealab does is by backing does it by backing hosts of potential start-ups. It
can tolerate those that fail to make the grade because it is more than
compensated by the few that make it big. Capital One, the credit card- issuing virtual
bank, follows a similar strategy in ties scatter-gun marketing, offering low
entry borrowing terms to huge numbers of people, only a fraction of whom will
prove profitable customers for the bank. Bill Gates flummoxed both customers
and competitors by simultaneously investing in Windows and in its principal
rival technologies, but he was effectively hedging his bets by fostering a
population of alternative strategies.
Robust strategies, says Beinhocker, differ from scenario
analysis because they do not attempt to identify the most or least likely
future. Instead to quote Francis Crick, the co-discoverer of DNA, they accept
that ‘evolution is cleverer than you are. in effect, the concept ‘ makes a company more like a market, with a population
of strategies that cover a broad array of possibilities and evolve over time, some
success ding and some failing.’
19. Which of the following is not an example of
the concept of “edge of chaos” as discussed above?
A.
Hurricane
B.
Typhoon
C.
Cyclone
D.
Forest fire
A.
C and B
B.
D only
C.
C and D
D.
B only
20. It can be made out from the article that it must have been a part of
A.
A book on evolutionary biology
B.
An interdisciplinary study on business and
biology
C.
A
research paper on evolution
D.
A book on business change
Answer:
19. C please refer
to the 2nd paragraph
20. D overall, the author talks of business
change by using principles derived from other areas of knowledge.
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