Strategic Management of Navy R&D Laboratories: An Application of Complexity Theory; Director of Navy Laboratories Case Study

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Virginia Tech

As part of an on-going process of centralizing control of government science and technology (S&T) after World War II, in 1966 the Navy went through a major reorganization that was intended to centralize the strategic management of the Navy laboratory system. This centralization was to be accomplished by placing the major Navy research and development activities in a single systems command - the Naval Material Command - and establishing the position of Director of Navy Laboratories. Organizational studies and reorganizations continued for the next 25 years until the Naval Material Command and the Director of Navy Laboratories were disestablished in 1985 and 1991, respectively. This dissertation is, in part, an historical study of the Navy from 1946 to 1966 that focuses on the bureaus and laboratories. It summarizes the organizational changes related to strategic management and planning of science and technology. The 1966 reorganization was a critical event because it created the first formal Navy laboratory system. It is proposed that the 1966 reorganization was not successful in centralizing the strategic management of the Navy laboratory system.

Classical organization theory offers an explanation of this failure. What can complexity theory add? The overarching contribution is in recognizing that a "Navy Laboratory System" existed before one was formally established in 1966. This argument is developed by considering two specific aspects of complexity theory.

First, there is the notion that strategic management of the laboratory system resulted from the complex interactions of the smaller units that comprise the system (rather than the result of organization and process choices by senior leadership). Second, there is the theory that an organization will exhibit different behaviors at different times or in different parts of the organization at the same time. This translates into the idea that at particular times and places, the formal structure was dominant in strategic management, but at other times the "emergent" organization was dominant. In fact, if power law theory is applicable, then the periods of stability (where the formal structure was dominant) ought to be more prevalent than the turbulent periods where the emergent organization was dominant in strategic management.

This case is made by describing agent-based models of the Navy laboratory system at two points in time and using them to identify the expected performance characteristics of the system. Historical and organizational artifacts are then used to make the case that the postulated system existed.

Navy Laboratories, Strategic Management, Complexity Theory