By doing so, organizations are aiming to embrace chaos and diversity, which they believe will lead to multiple "butterflies" bringing about positive change (Goldoff, 2000; Stilwell, 1996).
Thus, as Petzinger (1999), Stuart (1995), and Richardson observe, chaos theory has led to organizations being viewed as organic or living systems that will find orderly solutions if they are allowed to do so. However, this does not imply that management should let go of all control. On the contrary, all chaos theory implies is that organizational management needs to be more sensitized to environmental changes, leading to flexibility, responsiveness, dynamism, and a reduced reliance on precise planning (Stilwell, 1996). For, as events unfold, there is always an allowance for freedom of choice in making decisions to change or stay with the nature of processes at work. The use of chaos theory, however, helps in tracing the "butterfly effect" of management decisions, and is, therefore, able to set direction in making new, effective decisions (Priesmeyer, p. 14).
For instance, chaos theory is useful in strategic management and decision-making because the chaos model emphasizes the need to look at non-average or nonlinear behavior as a source of change. Similarly, chaos theory stresses on the need for a future orientation in organizational strategies rather than a reliance on repeating the successful patterns of the past (Goldoff, 2000). In effect, the use of chaos theory in strategic decisions can, by itself, lead to organizations becoming more innovative and dynamic.
In fact, as Petzinger (1999) points out, organizations such as Koch Industries of Wichita, Kansas have grown bigger than Microsoft and Coke in terms of sales precisely because such organizations have learnt the value of working with chaos. Koch achieves this through a culture that has no central planning, no budgets, and no fixed...
In a similar vein, Priesmeyer (p. 12-13) points out, the only way market share can be changed in the long run is by changing the nature of the relationship between the firm and its environment: "Chaos theory allows us to enter a new domain of analysis that examines the structural relationships that bind our businesses to specific patterns of performance. It gives us a new perspective from which we can see the fundamental constraints that restrict us."
Innovation has always been the fuel that drives the engine of business. However, in an intensely competitive and fast changing world, a company must necessarily be innovative even in the way it interacts with the environment. To achieve this, organizations need to create an environment that empowers its employees to contribute to solving any problem or tapping into opportunities that may present themselves. One surefire way of doing this is for organizations to operate on the basis of chaos theory. In other words, organizations must view themselves as organic systems that can change and adapt all the time and still achieve order!
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Priesmeyer, H.R. "Organizations and Chaos: Defining the Methods of Nonlinear
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Richardson, J. "Life in the Workplace: At the Edge of Chaos and Spirit." Business Spirit
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