Chaos Theory of Management - Explained
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What is the 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.
Back to: Business Management
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 customers needs and wants through organizational change.