The Complexity Turn

Chapter 2 describes tenets of complexity theory including the precept that within the same set of data X relates to Y positively, negatively, and not at all. A consequence to this first precept is that reporting how X relates positively to Y with and without additional terms in multiple regression models ignores important information available in a data set. Performing contrarian case analysis indicates that cases having low X with high Y and high X with low Y occur even when the relationship between X and Y is positive and the effect size of the relationship is large. Findings from contrarian case analysis support the necessity of modeling multiple realities using complex antecedent configurations. Complex antecedent configurations (i.e., 2–7 features per recipe) can show that high X is an indicator of high Y when high X combines with certain additional antecedent conditions (e.g., high A, high B, and low C)—and low X is an indicator of high Y as well when low X combines in other recipes (e.g., high A, low R, and high S), where A, B, C, R, and S are additional antecedent conditions. Thus, modeling multiple realities—configural analysis—is necessary, to learn the configurations of multiple indicators for high Y outcomes and the negation of high Y. For a number of X antecedent conditions, a high X may be necessary for high Y to occur but high X alone is almost never sufficient for a high Y outcome.

This study advances the proposition that applying core tenets of complexity theory is useful for solving the “crucial problem” in strategic management—describing, explaining, and predicting firm heterogeneity. The study describes the core tenets (e.g., the necessity of constructing models for cases with relationship reversals to a significant main effect—cases occur whereby both high and low scores of an antecedent condition indicate high scores in an outcome condition; asymmetric models are necessary because the causes of successful outcomes are not the mirror opposite of the causes of unsuccessful outcomes). Constructing “somewhat precise outcomes tests” (SPOT) rather than null hypothesis statistical testing (NHST) is the principal analytic tool. The study describes asymmetric models of implemented strategy and competitive advantage for ROE, negation of ROE, and complex outcome statements for agribusiness firms (n = 247) across seven Latin America national as well as tests the predictive validities of models across specific nations for the models of sampled firms within Costa Rica, El Salvador, Guatemala, and Nicaragua. The findings support the propositions that constructing complex antecedent statements (i.e., algorithms/configurations/recipes/screens) are useful for indicating high performance or the negation of high performance consistently. Configural implemented strategy models have direct influences on both high and low performance outcomes, while competitive advantage models impact low, but not, high performance outcomes. Complex competitive advantage conditions contribute indirectly to high performance outcomes.

This study proposes and tests empirically a configural asymmetric theory of the antecedents to hospitality employee happiness-at-work and managers’ assessments of employees’ quality of work-performance. The study confirms and goes beyond prior statistical findings of small-to-medium effect sizes of happiness-performance relationships. The study merges data from surveys of employees (n = 247) and surveys completed by their managers (n = 43) and by using qualitative comparative analysis via the software program, fsQCA.​com. The study analyzes data from Janfusan Fancyworld, the largest (in revenues and number of employees) tourism business group in Taiwan; Janfusan Fancyworld includes tourist hotels, amusement parks, restaurants and additional firms in related service sectors. The findings support the four principles of configural analysis and theory construction: recognize equifinality of different solutions for the same outcome; test for asymmetric solutions; test for causal asymmetric outcomes for very high versus very low happiness and work performance; and embrace complexity. Additional research in other firms and additional countries is necessary to confirm the usefulness of examining algorithms for predicting very high (low) happiness and very high (low) quality of work performance. The implications are substantial that configural theory and research will resolve perplexing happiness-performance conundrums. The study provides algorithms involving employees’ demographic characteristics and their assessments of work facet-specifics which are useful for explaining very high happiness-at-work and high quality-of-work performance (as assessed by managers)—as well as algorithms explaining very low happiness and very low quality-of-work performance. The study is the first to propose and test the principles of configural theory in the contest of hospitality frontline service employees’ happiness-at-work and managers’ assessments of these employees quality of work performances.

Building behavioral-pricing models-in-contexts enriches one or more goals of science and practice: description, understanding, prediction, and influence/control. The general theory of behavioral strategy includes a set of tenets that describes alternative configurations of decision processes and objectives, contextual features, and beliefs/assessments associating with different outcomes involving specific price-points. This article explicates these tenets and discusses empirical studies which support the general theory. The empirical studies include the use of alternative data collection and analytical tools including true field experiments, think aloud methods, long interviews, ethnographic decision-tree-modeling, and building and testing algorithms (e.g., fuzzy-set qualitative comparative analysis). The general theory of behavioral pricing involves the blending of cognitive science, complexity theory, economics, marketing, psychology, and implemented practices. Consequently, behavioral pricing theory is distinct from context-free microeconomics, market-driven, and competitor-only price-setting. Capturing and reporting contextually-driven alternative routines to price setting by a compelling set of tenets represents what is particularly new and valuable about the general theory. The general theory serves as a useful foundation for advances in pricing theory and improving pricing practice.

This study examines influences on quality-of-life of national cultures as complex wholes and entrepreneurship activities in Brazil, Russia, India, China, Germany, and the United States. The study tests McClelland’s (1961) and more recent scholars’ proposition that some cultural recipes nurture entrepreneur startups while other cultures are biased toward thwarting startups. The study applies complexity theory to construct and empirically test a general theory of cultures’, entrepreneurship’s, and innovation’s impact on quality-of-life across nations. Because culture represents a complex whole of attitudes, beliefs, values, and behavior, the study applies a set-theoretic approach to theory construction and testing of alternative cultural recipes. Each of 28 nations is scored for the level of the national cultures for each of six focal countries. The findings include presenting the complex X (national cultural recipe) with Y (entrepreneur nurture/thwart) plots of the 28 nations for the six focal nations. The findings include recognizing national cultures (Switzerland, USA) nurturing entrepreneurial behavior versus other national cultures thwarting (Brazil and India) entrepreneurial behavior. The study concludes with a call to recognize the implicit shift in cultural implicit thinking and behavior necessary for advancing national platforms of actions to nurture entrepreneurship successfully. Entrepreneur strategy implications follow from the findings including the observation that actions nurturing firm start-ups by nations low in entrepreneurship will unlikely to be successful without reducing such nations’ high levels of corruption.

Prior research on the association between corporate social performance (CSP) and corporate financial performance (CFP) includes conflicting perspectives and inconclusive findings as to whether or not CSP has a positive, negative, or neutral association with CFP. While Wang et al. (2015) meta-analysis confirms the relationship between CSP and CFP to be significant and positive, in some contexts CSP and CFP associate negatively; CSP may need to receive “good management” support to yield positive financial outcomes [Luo and Bhattacharya (J Mark 73:198–213, 2009)]. The study here tests and supports the perspective that “good management” occurs in configurations (i.e., business models) with high CSP to indicate high CFP. A configurational theoretical stance implies that recipes of bad management with high or low CSP are likely to associate with low CFP. Configurational analysis supports this theoretical perspective. Building from complexity theory, a configurational analysis includes the propositions that complex multiple recipes lead to the same outcome (equifinality tenet) whereby variables (ingredients) found to associate causally in one configuration may be absent in another recipe or even inversely related in a third recipe associated with this same outcome. The present study employs a mixed methods research design (using surveys of senior executives, independent CSP firm assessments using ESG factors (environment, social (or human rights), and governance), and analysis of corporate annual reports of 82 mostly highly-global Swedish firms). The study overcomes the mismatch between case-level theory proposals and variable-based data analyses that is widespread in the relevant literature. The study’s findings support the core tenets of complexity theory.