Chaos Theory of Management

Cite this article as:"Chaos Theory of Management," in The Business Professor, updated April 2, 2020, last accessed October 26, 2020, https://thebusinessprofessor.com/lesson/chaos-theory-of-management/.

Back to: Business Management

Chaos Theory of Management

Chaos theory is a scientific theory has been applied to management practice. It was first introduced in this context by Tom Peters in the 1980s. He stated that managers must be prepared for environmental and technological changes.

Chaos theory focuses on the unpredictability in occurrences and behaviors. Naturally, systems gravitate toward complexity. As such, they become increasingly volatile and susceptible to the effects of chaos. Also, organizations require increased energy and effort to maintain their systems and stability. The effect is that these systems will ultimately fail if not split or combined with other systems.

While the occurrence of the unpredictable cannot be controlled, randomness can be accounted for within mathematical formulas.

Peters asserts that rigid hierarchical structures ultimately harm the company’s ability to react to this ever-present randomness. He mainly espoused the need for responsiveness to customer’s needs and wants through organizational change.

Was this article helpful?