Famous managers and consultants seem to be unanimous in stressing the importance of simple managerial principles as a basis for success. But one should be more sceptical in our contemporary world. Although we largely recognise that an organisation can derive enormous benefit from doing basic things well, complexity, rather than simplicity seems to define the character of the managerial game. Wherever, one looks, managers are confronted with complexity. Situations are shaped by multiple stakeholders with multiple understanding, multiple expectations, and multiple demands. These situations are often ambiguous and paradoxical. They demand that managers attend to many aspects at one time. The idea that these situations are basically very simple may be appealing, but the stark reality is that they are very complex. Presently, the major task facing many managers seems to be that of managing complexity. It is often necessary to find simple ways of cutting through the complexity, for example, by developing visions that unite diverse stakeholders, by creating market orientations that focus on important components of the external environment, by attending to the needs of employees to develop human potential. Yet, there is a real danger in dwelling on the myth of simplicity. It is more realistic to accept complexity as a basic feature of modern reality and fine tune our "antennae" to interpret this complexity so that it is more manageable. All the emerging competencies that we have discussed in this column since October 2007 are relevant to this endeavour. The purPOse of this week's write up to the subsequent week, therefore, is to place the reality of complexity firmly in view and highlight some of its key dimensions as espoused by Prof Gareth Morgan. "The management of complexity is something that is likely to be with us permanently. It is not going to get less and less, and also cannot be wished away." Prof Morgan focuses on three aspects of this complexity: Managing multiple stakeholders; managing many things at once; and managing transition. Together, these profile the managerial problems that are likely to increase in importance in the years ahead. Three parallel trends are reshaping the nature and pattern of managerial responsibility and accountability in a profound manner: The shift from shareholder to a stakeholder concept of organisation, the shift from discrete organisations to networks, and the shift from highly integrated businesses to miscellany collections of highly differentiated units. Each of these trends creates its own set of problems and challenges. Stakeholder concept Stakeholder power is becoming as important as shareholder power. The flux in social values makes it increasingly important for managers to realise their multiple responsibilities to a wide group of stakeholders that may include employees, customers, distributors, the community, politicians, and special interest groups, as well as owners or shareholders. Increasingly, organisations are influenced by these stakeholders to such an extent that traditional lines of responsibility are becoming increasingly difficult to discharge. Different stakeholders tend to put their interests at the forefront of organisational activities, making the task of management a very difficult balancing act. The interests of shareholders have to be balanced against those of employees, and the interests of both these groups must be reconciled with customer satisfaction. Policies advancing the interests of an organisation must be balanced with those of the local community or of active interest groups. And so on. Although shareholders hold ultimate power over managers with respect to hiring and firing and demand that their interests be first, successful, long-term management always involves the simultaneous management of multiple interests. Excessive demands emanating from this paradox, whether they come from shareholders, unions, community groups, or politicians, can have major negative impacts on a power-loaded context, where they often feel they are looking down the barrel of an AK47. Somehow, they must work toward a more favourable situation that allows them the freedom to be effective. Prof Morgan offers some ideas: recognise the "stake" and potential contributions of stakeholder groups, adopt stakeholder perspectives in the planning process, and develop stakeholder concepts in accountability. Recognising stakeholder groups Corporate philosophies that recognise and emphasise the role of potential contributions of different stakeholders should be adopted. Some organisations are systematically moving toward an explicit concept of "a muti-stakeholder business controlled by investors, employees, managers, and customers." By recognising and confronting the diverse interests that shape an organisation, and by building initiatives that bind those interests together, it is possible to create new relationships among stakeholders as attitudes, understanding and general involvement are transformed. Stakeholders and the planning process Involvement of critical stakeholders in planning process (even if only solicited for feedback) is also critical. Very often, organisations attempt to simplify the planning process by eliminating the influence of potentially disruptive elements. That influence, or course, is usually delayed rather than removed because it surfaces later as opposition to implementation. Stakeholder accountability The very nature of stakeholder concept of organisation carries with it a pluralistic view of accountability. Managers that feel accountable to their staff, their customers, their community, and their shareholders will approach their responsibilities in a much more sophisticated manner than they would in situations where authority and responsibility flow to and from a single source. The manager of the future will need to be a good negotiator, at times a great statesman, capable of finding the unifying themes that allow fundamental conflicts between stakeholders to be resolved. From discrete organisation to networks Another aspect of the changing pattern of stakeholder relations is found in the network concept of organisation. The idea of a discrete organisation with identifiable boundaries (whether defined in terms of physical location, the manufacturing process, or staff employed) is breaking down. Under the influence of microelectronics, JIT management, and various subcontracting arrangements, organisations are becoming more amorphous networks or interdependent organisations where no element is in firm control. Even though such a network may have a powerful focal organisation, interdependence is the key. Gone is the old-fashioned notion of hierarchy in which one member (for example, the focal organisation) directs the activities of other members. In comes the notion of network that must be managed as a system of interdependent stakeholders. This network management is fostered by a new sense of collective identity, managerial philosophies that recognise the importance of dependence and collaboration and a collective sense of accountability, and control. Whereas in a world of discrete organisations accountability and control tend to be oriented inward, in network structures they must also be oriented outward. Whereas under the discrete system control was often exercised unilaterally as directives from the top, in a network system, control has to be more consensual. Control in a network rests with the management of relations rather than the management of diverse activities. The ability to recognise patterns of interdependence and achieve collaboration between diverse stakeholders lies at the heart of network management. It is this appreciation of the interests that can unite and mobilise a qiversified network that leads to a shared vision. High integration A third trend impacting stakeholder management is the emergence of potpourri forms of management, where diverse businesses are brought under a single umbrella of control - a conglomerate. It is clear how this trend adds to the scale and difficulty of stakeholder management. It is difficult enough to manage the various stakeholders in a single highly integrated business; however, in a conglomerate, the complications are multiplied: Each business has its own set of stakeholders, its own corporate culture, and often its own distinctive style of management. The complexity of the problem is impacted by the degree of integration demanded by the parent organisation. To the extend that stakeholder management at the local level can be delegated through remote management, the problem can be eased. But where integration is sought, difficulties can often arise. "Blending is the key, it is absolutely essential for everyone to have a sense of why you are in business, and where everything fits. You have to blend, people, you have to blend organisations, and you have to blend cultures." Therefore, close attention must be paid to blending skills, particularly as they relate to stakeholder management, as it is the stakeholders that ultimately must be blended. Source: Daily Graphic/Capt Sam Addaih (retd), Lecturer, GIMPA aquasi2000@yahoo.com Saddaih@gimpa.edu.gh