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Organizations should always adapt to a changing environment. The business environment is characterized by a number of changes which are a result of many factors, both external and internal. Nature is continuously changing and adapting. According to the complex adaptive systems theory, organizations must keep on revising their goals to come up with something new. This can be done through testing new ways of doing things, as dictated by the changes in the society. The theory asserts that natural variations create confusion and chaos, and ensure long-term survival. In addition to this, some of these variations are useless to nature. The study of the relationship between chaos, adaptability and survival is very important for all organizations (Holland, 1992).
For our case Company, Costco, the managers must understand how the natural world influences business strategy. The managers ought to take into consideration that only a few of the natural variations succeed. This has a serious implication on leadership and innovation at Costco.
To be strategically placed in the retail industry, Costco ought to understand that there is a need to test survival strategies to identify the most adaptive innovation. Innovation is all about coming with something new, but it is greatly influenced by adaptive systems. A study of complex adaptive systems will help Costco understand how natural systems interact, survive and adapt over time.
This way, Costco can up with a strategy that can remain relevant even when natural systems change. The company should understand that boundaries cannot be imposed from outside. For Costco these boundaries are management hierarchies, division offices, departments, and so forth. For the complex adaptive systems to function fully there ought to be continuous feedback. The feedback can be positive or negative (Lansing, 2003). Costco must understand that positive feedback will elevate their outputs while negative one will lower their profitability. For those reason, Costco should carry out forecasts to understand the future.
Lansing, J. S. (2003). Complex adaptive systems. Annual review of anthropology, 183-204.
Holland, J. H. (1992). Complex adaptive systems. Daedalus, 17-30.