Chaos Theory and Organization

Chaos Theory and Organization
Author(s): R. A. Thitart and B. Forgues

Source: Organization Science, Vol. 6, No. 1, Focused Issue: European Perspective on
Organization Theory (Jan. - Feb., 1995), pp. 19-31
Published by: INFORMS
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C h a o s T h e o r y a n d Or ga n iza tio n
R. A. T h ie ta r t * B. Fo r gue s
Un ive r s ity o f Pa r is -Da uph in e , DMSP a n d Es s e c, 75775 Pa r is C e d e x 16 Fr a n ce
Abs tr a ct
Ma n y a uth o r s h a ve s tr e s s e d th e e xis te n ce o f co n tin uo us pr o -
ce s s e s o f co n ve r ge n ce a n d d ive r ge n ce , s ta bility a n d in s ta -
bility , e vo lutio n a n d r e vo lutio n in e ve r y o r ga n iza tio n . T h is
a r ticle a r gue s th a tth e s e pr o ce s s e s a r e e mbe d d e d in o r ga n iza -
tio n a l ch a r a cte r is tics a n d in th e wa y o r ga n iza tio n s a r e ma n -
a ge d . Or ga n iza tio n s a r e pr e s e n te d a s n o n lin e a r d y n a mic s y s -
te ms s ubje ctto fo r ce s o f s ta bility a n d fo r ce s o f in s ta bility
wh ich pus h th e m to wa r d ch a o s . Wh e n in a ch a o tic d o ma in ,
o r ga n iza tio n s a r e like ly to e xh ibitth e qua lita tive pr o pe r tie s
o f ch a o tic s y s te ms . Se ve r a l o f th e s e pr o pe r tie s -s e n s itivity to
in itia l co n d itio n s , d is cr e te n e s s o f ch a n ge , a ttr a ctio n to s pe -
cific co n figur a tio n s , s tr uctur a l in va r ia n ce a t d iffe r e n ts ca le s
a n d ir r e ve r s ibility -a r e us e d to e s ta blis h s ix pr o po s itio n s .
Fir s t, be ca us e o f th e co uplin go f co un te r a ctin gfo r ce s , o r ga n i-
za tio n s a r e po te n tia lly ch a o tic. Se co n d , th e pa th fr o m o r ga n i-
za tio n a l s ta bility to ch a o s fo llo ws a d is cr e te pr o ce s s o f ch a n ge .
T h ir d , wh e n th e o r ga n iza tio n is in th e ch a o tic d o ma in , s ma ll
ch a n ge s ca n h a ve bigco n s e que n ce s th a tca n n o tbe pr e d icte d
in th e lo n gte r m. Fo ur th , fr o m ch a o s , n e w s ta bilitie s e me r ge
-th e s tr a n ge a ttr a cto r s -wh ich a r e a s s imila te d to o r ga n iza -
tio n a l co n figur a tio n s . Fifth , s imila r pa tte r n s s h o uld be fo un d
a t d iffe r e n ts ca le s . Fin a lly , d ur in go n e s in gle o r ga n iza tio n a l
life s pa n o r be twe e n two d iffe r e n to r ga n iza tio n s s imila r a c-
tio n s s h o uld n e ve r le a d to th e s a me r e s ult.
(Or ga n iza tio n T h e o r y ; C h a o s T h e o r y ; No n lin e a r
Dy n a mic Sy s te ms )
In th is a r ticle , ch a o s th e o r y a n d pr o pe r tie s o f ch a o tic
s y s te ms a r e us e d to s ugge s t a n e w a ppr o a ch to un d e r -
s ta n d h o w o r ga n iza tio n s wo r k. T h e o r ga n iza tio n is pr e -
s e n te d a s a n o pe n , d y n a mic, n o n lin e a r s y s te m s ubje ct
to in te r n a l a n d e xte r n a l fo r ce s wh ich migh t be s o ur ce s
o f ch a o s . Ho we ve r , ch a o s -i.e ., a n a ppa r e n tly r a n d o m,
but d e te r min is tica lly d r ive n be h a vio r -h a s o r ga n izin g
a ttr ibute s . T h e s e o r ga n izin ga ttr ibute s r e s ult fr o m th e
multiple in te r a ctio n s be twe e n fo r ce s o f s ta bility a n d
fo r ce s o f in s ta bility th e s y s te m is s ubje ct to . Fo r ce s o f
in s ta bility d e r ive fr o m in itia tive s o r ga n iza tio n a l a cto r s
ta ke . By ta kin gin itia tive s , a cto r s cr e a te in te r n a l d is o r -
d e r . In s ta bility , a ls o , ca n be ge n e r a te d by o r ga n iza -
tio n a l a cto r s wh o d e ve lo p multiple a n d in te r r e la te d
ma n a ge r ia l a r tifa cts . On e pur po s e o f th e s e a r tifa cts is
to cr e a te th e illus io n o f ma n a gin gto r e d uce co gn itive
d is s o n a n ce be twe e n wh a t ma n a ge r s a r e s uppo s e d to d o
a n d wh a t th e y ca n r e a lly a ch ie ve . In th e s a me ve in ,
ma n a ge r ia l a r tifa cts ca n s e r ve th e pur po s e o f cr e a tin g
is la n d s o f r a tio n a lity a n d ce r ta in ty a n d , a s a co n s e -
que n ce , a fo r m o f s ta bility . T h a n ks to th e ir po we r o f
clo s ur e , th e a r tifa cts a s s is t th e ma n a ge r in ma kin g
d e cis io n s a n d imple me n ta tio n o f a ctio n s . But, th e ma n -
a ge r ia l a r tifa cts a r e , a ls o , a s o ur ce o f d is o r d e r . T h e y
te n d to s tiffe n th e o r ga n iza tio n a r o un d a r tificia l wo r k-
in g r ule s wh ich pr e ve n t a n a tur a l a d jus tme n t fr o m
ta kin g pla ce be twe e n th e in te r n a l a n d th e e xte r n a l
d y n a mic fo r ce s th e o r ga n iza tio n is s ubje ct to . Dive r -
ge n ce be twe e n fo r ce s o f s ta bility a n d in s ta bility a n d th e
fr e que n t a pe r io d ic co uplin g o f th e s e s a me fo r ce s la y
th e gr o un d wo r k fo r ch a o s to a ppe a r . Wh e n in th e
ch a o tic d o ma in , i.e ., a d o ma in wh e r e a ch a o tic be h a v-
io r ca n be o bs e r ve d , s e ve r a l co n s e que n ce s , ba s e d o n
ch a o s th e o r y , ca n be d r a wn . T h e pur po s e o f th e d is cus -
s io n be lo w is to pin po in t th e s e co n s e que n ce s fr o m th e
pe r s pe ctive o f o r ga n iza tio n s cie n ce a n d to pr o po s e a
ch a o s th e o r y -ba s e d a ppr o a ch to un d e r s ta n d in g h o w
o r ga n iza tio n s wo r k.
In tr o d uctio n
Fr o m bo o ks pr o po s in g r e cipe s fo r ma n a ge r ia l s ucce s s
to a ca d e mic r e s e a r ch , lite r a tur e in ma n a ge me n t is s till
fr e que n tly ba s e d o n a n implicit a s s umptio n o f s ta bility
a n d a qua s i-me ch a n is tic vie w o f o r ga n iza tio n . Fo r s o me ,
ma n a ge me n t h a s a ch ie ve d th e s ta tus o f s cie n ce . Pr e d ic-
tio n a n d r e plica bility a r e s e e n po s s ible . T h is migh t be
ta ke n a s a n in d ica tio n o f th e ma tur ity th e fie ld h a s
a ch ie ve d . Ho we ve r , fo r th o s e wh o r un o r ga n iza tio n s ,
ma n a ge me n t is n o t a lwa y s a s tr a igh tfo r wa r d e n d e a vo r .
It ca n be much mo r e co mple x th a n wh a t s implis tic
r e co mme n d a tio n s imply . Pr e d ictio n is d ifficult a n d
r e plica bility , h a za r d o us . Re s e a r ch e r s s uch a s Fo mbr un
(1986), Ja uch a n d Kr a ft (1986), Ny s tr o m e t a l. (1976),
Quin n a n d C a me r o n (1988) a n d We ick (1977) h a ve
a lr e a d y ch a lle n ge d th e vie w o f a r a tio n a l a n d me ch a -
n is tic o r ga n iza tio n . In s te a d , po litica l ga me s be twe e n
o r ga n iza tio n a l a cto r s , in tuitio n , a n d r a n d o m e ve n ts
co me in to pla y in s h a pin ga n o r ga n iza tio n 's futur e .
1047-7039/95/0601/0019/$01.25
C o py r igh t ? 1995. In s titute fo r Ope r a tio n s Re s e a r ch
a n d th e Ma n a ge me n t Scie n ce s
ORGANIZAT ION SC IENC E /Vo l. 6, No . 1, Ja n ua r y -Fe br ua r y 1995 19
R. A. T HIET ART AND B. FORGUES C h a o s T h e o r y a n d Or ga n iza tio n
Ma n y ma n a ge r ia l pr a ctice s a n d r e s e a r ch fin d in gs a r e
n e ith e r un ive r s a l n o r time -r e le va n t. On o n e h a n d , th e ir
e xte r n a l va lid ity is fr e que n tly lo w. T h e y ca n n o t be
e a s ily a d a pte d fr o m o n e o r ga n iza tio n to th e o th e r . On
th e o th e r , e ve n in th e o r ga n iza tio n s in wh ich th e y
o r igin a te , th e fin d in gs a r e o fte n n o t d ur a ble . T h is is n o t
s ur pr is in gbe ca us e pr a ctice s a n d r e s e a r ch fin d in gs a r e
ba s e d o n id io s y n cr a tic o r a ve r a ge d s itua tio n s wh ich
ca n 't be e a s ily fo un d e ls e wh e r e . Fur th e r mo r e , th e y a r e
d e r ive d fr o m pa s t e xpe r ie n ce s a n d co n d itio n s wh ich
will be r a r e ly th e s a me in th e futur e . A pa r a d igma tic
s h ift is n e ce s s a r y to r e co n cile a ppa r e n tly d ive r ge n t
a ppr o a ch e s to ma n a ge me n t. T h e s cie n ce o f ch a o s pr o -
vid e s a n e w pa r a d igm wh e r e two a ppa r e n tly ir r e co n cil-
a ble vis io n s o f ma n a ge me n t-r a tio n a l a n d qua s i-me ch -
a n is tic o n o n e h a n d , un e xpe cte d a n d d is o r d e r ly o n th e
o th e r h a n d -ca n be r e co n cile d .
Na tur a l s cie n tis ts we r e th e fir s t to tur n th e ir a tte n -
tio n to th e s tud y o f ch a o s , i.e ., a s y s te m be h a vio r wh ich
is a ppa r e n tly r a n d o m e ve n th o ugh it is d r ive n by d e te r -
min is tic r ule s . T h e ir a tte n tio n wa s tr igge r e d by th e
Rue lle a n d T a ke n s ' a r ticle o n fluid flo w tur bule n ce .
Rue lle a n d T a ke n s (1971) s h o we d th a t a s imple d e te r -
min is tic mo d e l, un d e r ce r ta in co n d itio n s , wa s a ble to
ge n e r a te be h a vio r s a s co mple x a s th o s e o bs e r ve d in
n a tur e . La te r e xpe r ime n ta l wo r k, a s d is cus s e d by
Swin n e y (1983), co n fir me d th e ir a s s e r tio n th a t d e te r -
min is tic ch a o s e xis te d in n a tur e . Simplicity a n d d e te r -
min is m co uld , th e r e fo r e , le a d to co mple xity . Eco n o mis ts
s o o n fo llo we d with wo r ks in ma cr o e co n o mics a n d fi-
n a n ce a s s ur ve y e d by Ba umo l a n d Be n h a bib (1989),
Gr a n d mo n t (1986) a n d illus tr a te d in An d e r s o n e t a l.
(1988). Sin ce e co n o mic d a ta s e e m r a n d o m, a lo gica l
s te p wa s to s e e if d e te r min is tic ch a o s , i.e ., a n a ppa r e n t
r a n d o mn e s s cr e a te d by d e te r min is tic r ule s , wa s pr e -
s e n t.
Or ga n iza tio n s cie n ce h a s n o t y e t give n full a tte n tio n
to n o n lin e a r d y n a mics a n d th e ir pr o pe r tie s . Apa r t fr o m
th e wo r ks o f Ge mmill a n d Smith (1985), Smith (1986)
o n d is s ipa tive s tr uctur e a n d s o cia l s y s te ms tr a n s fo r ma -
tio n , No n a ka (1988) o n fir ms s e lf r e n e wa l, Pr ie s me y e r
a n d Ba ik (1989) o n o r ga n iza tio n a l ch a o tic be h a vio r ,
Ra s mus s e n a n d Mo s e kild e (1988) o n ch a o tic be h a vio r
o f ma n a ge me n t s y s te ms , Sta ce y (1992, 1993) o n ch a o s
a n d ma n a ge me n t, a n d Zimme r ma n (1990) o n ch a o s
th e o r y a n d s tr a te gic pr o ce s s e s , th e lite r a tur e is s till
r a th e r s pa r ce a n d d o e s n o t a lwa y s pr o vid e in s igh ts o n
wh a t we ca n in fe r fr o m ch a o s th e o r y .
An Ove r vie w o f C h a o s T h e o r y
C h a o s th e o r y ta ke s its r o o t in th e s tud y o f n o n lin e a r
d y n a mic s y s te ms . No n lin e a r d y n a mic s y s te ms h a ve s pe -
cific pr o pe r tie s th a t ma th e ma ticia n s h a ve s tud ie d fo r
mo r e th a n a ce n tur y (Po in ca r e , 1892-1899). Ho we ve r ,
d ur in gth e s e la s t 30 y e a r s , in te r e s t in th e s e s y s te ms h a s
gr o wn a mo n g r e s e a r ch e r s o f d iffe r e n t s cie n tific fie ld s
s uch a s ph y s ics , ch e mis tr y a n d e co n o mics . In te r e s t h a s
be e n ma in ly s timula te d by th e s e s y s te ms ca pa bilitie s in
r e pr e s e n tin gwh a t we r e pe r ce ive d , in th e pa s t, a s n o is e
a n d r a n d o mn e s s . Wh a t s e e me d s tr a n ge a n d co uld n o t
be e xpla in e d with tr a d itio n a l mo d e ls wa s la r ge ly le ft
a s id e . Much o f th e wo r k d o n e wa s fo cus in go n r e gula r -
ity , e quilibr ium, s ta bility , pr e d icta bility . We h a ve to
wa it fo r th e s ixtie s a n d e s pe cia lly th e s e ve n tie s to s e e
r e s e a r ch e r s s ta r t fo cus in g o n wh a t wa s le ft a s id e be -
fo r e , i.e ., th e a ppa r e n t un e xpla in a ble , th e co mple x, th e
"s ta ble -un s ta ble ."
Pr o pe r tie s o f No n lin e a r Dy n a mic Sy s te ms
A n o n lin e a r d y n a mic s y s te m is a s y s te m wh e r e r e la tio n -
s h ips be twe e n time -d e pe n d e n t va r ia ble s a r e n o n lin e a r .
T h is s y s te m h a s th r e e ty pe s o f e quilibr ium. On o n e
h a n d , wh e n th e s y s te m is d ir e cte d by n e ga tive fe e d -
ba cks , wh ich d a mpe n th e in flue n ce o f va r ia ble s , a fte r a
ch a n ge , th e s y s te m a lwa y s co me s ba ck to its in itia l
s ta te . T h is is th e fir s tty pe o f e quilibr ium: s ta bility . On
th e o th e r h a n d , wh e n th e s y s te m is d r ive n by po s itive
fe e d ba cks , wh ich r e in fo r ce th e o r igin a l ch a n ge ma d e in
o n e o f its va r ia ble s , s ma ll ch a n ge s a r e a ccumula tin g
e xpo n e n tia lly to le a d to a n e xplo s ive s itua tio n . In a n
e xplo s ive in s ta bility s itua tio n , it is d ifficult to fo r e ca s t
wh e r e th e s y s te m go e s but to a co mple te co lla ps e . T h is
is th e s e co n d ty pe o f "e quilibr ium": e xplo s ive in s ta bil-
ity . Fin a lly , wh e n we a r e in th e s imulta n e o us pr e s e n ce
o f co un te r a ctin g in flue n ce s , po s itive fe e d ba cks wh ich
te n d to r e in fo r ce th e in itia l ch a n ge a n d in cr e a s e in s ta -
bility , n e ga tive fe e d ba cks wh ich d a mpe n th e o r igin a l
ch a n ge a n d te n d to in cr e a s e s ta bility , we fin d n e w
in te r e s tin g s itua tio n s (Rue lle 1988). Fir s t, th e s y s te m
ca n r e a ch a s ta ble e quilibr ium o r po in t a ttr a cto r wh ich
is in d e pe n d e n t o f time . We ca n a ls o o bs e r ve a fo r m o f
pe r io d ic s ta bility (pe r io d ic a ttr a cto r ) wh e r e th e s y s te m
pe r io d ica lly co me s ba ck to its pr e vio us s ta te . Fin a lly ,
we ma y a ls o fin d a mo r e co mple x be h a vio r . On o n e
h a n d , th e be h a vio r ca n be co mple te ly e r r a tic a n d ge n -
e r a te a d e te r min is tic n o is e . On th e o th e r h a n d , it ca n
be co n ta in e d with in a s tr a n ge s h a pe d s ur fa ce , d ubbe d
s tr a n ge a ttr a cto r . In th is s itua tio n , th e r e is a s e n s itive
d e pe n d e n ce to th e in itia l co n d itio n s , i.e ., a s ma ll in itia l
ch a n ge h a s a n un e xpe cte d a n d impo r ta n t impa ct. T h e
be h a vio r is s a id to be ch a o tic.
Wh e n in a s itua tio n o f co un te r a ctin gfo r ce s , ch a o s is
n o t a lwa y s o bs e r ve d . C e te r is pa r ibus , th e s ta te o f th e
20 ORGANIZAT ION SC IENC E /Vo l. 6, No . 1, Ja n ua r y -Fe br ua r y 1995
s y s te m-ch a o tic o r s ta ble -d e pe n d s o n th e d y n a mic
co mbin a tio n a n d o n th e r e la tive s tr e n gth o f th e r e la -
tio n s h ips a mo n g its va r io us e le me n ts . T h e pa s s a ge , o r
bifur ca tio n , fr o m s ta ble e quilibr ium to pe r io d ic be h a v-
io r to ch a o s ta ke s pla ce wh e n a n in cr e a s in gn umbe r o f
va r ia ble s with d iffe r e n t fr e que n cie s a r e co uple d be -
twe e n e a ch o th e r . Fe ige n ba um (1978) s h o ws th a t a
s y s te m pa s s e s fr o m a s ta ble to a pe r io d ic a n d fr o m a
pe r io d ic to a ch a o tic s itua tio n wh e n th e s tr e n gth o f th e
lin k (th e va lue o f a pa r a me te r ) be twe e n va r ia ble s
ch a n ge s . C h a o tic be h a vio r is like ly wh e n th e n umbe r o f
va r ia ble s , is e qua l to o r gr e a te r th a n th r e e . Fur th e r -
mo r e , wh e n th e n umbe r o f va r ia ble s with d iffe r e n t
pe r io d icity in cr e a s e s , a r e s ultin gmo r e co mplica te d be -
h a vio r is o bs e r ve d . As a co n s e que n ce , th e s imulta n e o us
pr e s e n ce o f a min imum n umbe r o f co un te r a ctin gfo r ce s
cr e a te a n a ppa r e n t r a n d o mn e s s , o r ch a o s , s imila r to
ph e n o me n a o bs e r ve d in n a tur e .
C h a o tic s y s te ms a n d th e ir pr o pe r tie s h a ve r e ce ive d a
co n s id e r a ble a mo un t o f a tte n tio n in th e n a tur a l s ci-
e n ce s (Alle n a n d Sa n glie r 1978, Ar tigia n i 1987,
Pr igo gin e a n d Ste n ge r s 1984, Rue lle 1991) a n d to s o me
e xte n t, but mo r e r e ce n tly , in e co n o mics (Br o ck a n d
Ma llia r is 1989). Fr o m to mo r r o w's we a th e r , wa te r tur -
bule n ce , je t e n gin e ga s pr o puls io n to d e mo gr a ph ic e vo -
lutio n , e co n o mic cy cle s a n d s to ck ma r ke t e vo lutio n ,
s y s te ms s e e m to be go ve r n e d by r e la tio n s h ips wh ich
d y n a mica lly in te r a ctwith o n e a n o th e r a n d a r e pr o n e to
ch a o tic be h a vio r . T h e multiple in te r a ctio n s be twe e n
th e s e r e la tio n s h ips tur n th e s imple s t r e la tio n s h ip we
ca n ima gin e in to a h igh ly co mple x n e two r k o f wh ich
be h a vio r is impo s s ible to a n ticipa te . As Eke la n d (1988,
p. 62) s a y s "e ve n if r e a lity is d e te r min is tic, it ma y we ll
h a ppe n th a t wh a t we o bs e r ve in th is wa y is un pr e -
d icta bility a n d r a n d o mn e s s ."
Wh e n in a ch a o tic s ta te , th e impa ct o f a va r ia ble
ch a n ge ca n be pr e d icte d o n ly fo r th e ve r y s h o r t te r m.
T h is pr o pe r ty ma ke s lo n g-te r m fo r e ca s tin g impo s s ible .
In fa ct, a s ma ll in itia l ch a n ge , th e e ffe ct o f wh ich
multiplie s a s time pa s s e s , ca n le a d to a d r a ma tica lly
d iffe r e n t e vo lutio n . It is a n e xpo n e n tia l in s ta bility . A
s ma ll ca us e ca n h a ve a big e ffe ct. T h e s e n s itivity to
in itia l co n d itio n s is n o t n e w. A ma th e ma ticia n ,
Ha d a ma r d (1898), wa s th e fir s t to s ugge s t th a t if a
s ma ll e r r o r in th e in itia l co n d itio n s o f a s y s te m is ma d e ,
th e n th e s y s te m lo n g-te r m e vo lutio n is impo s s ible to
pr e d ict. But, we h a ve to wa it fo r Lo r e n z (1963 a , b)
a n d h is fa mo us me ta ph o r o f th e fla p o f a butte r fly 's
win gwh ich cr e a te s , a fe w mo n th s a fte r , a s to r m, to s e e
a wa r e n e s s o f th is ph e n o me n o n gr o win g a mo n g th e
s cie n tific co mmun ity . T h a t is to s a y th a t s ma ll va r ia -
tio n s in s o me o f th e va r ia ble s migh t h a ve mo n ume n ta l
co n s e que n ce s ; co n s e que n ce s wh ich co uld n o t h a ve be e n
pr e d icte d be fo r e h a n d .
An o th e r ch a r a cte r is tic o f ch a o tic s y s te ms is wo r th
n o ticin g. Es pe cia lly in th e ca s e o f d is s ipa tive
s y s te ms -th o s e wh ich d is s ipa te th e ir e n e r gy -th e
ch a o tic e vo lutio n ma y ge t o r ga n ize d a r o un d s tr uctur e s
th a t we fin d a t d iffe r e n t s ca le s , n a me d th e s tr a n ge
a ttr a cto r s . A n e w fo r m o f o r d e r is fo un d o ut o f ch a o s .
T h e a ppa r e n t r a n d o m be h a vio r ge ts "a ttr a cte d " to a
give n s pa ce a n d r e ma in s with in its limits . T h e s e a ttr a c-
to r s we r e fir s tca lle d s tr a n ge by Rue lle be ca us e o f th e ir
un e xpe cte d a n d s tr a n ge ly r e gula r s h a pe s uch a s th e
r in g-s h a pe d a ttr a cto r o f He n o n , th e butte r fly win g
s h a pe d a ttr a cto r o f Lo r e n z o r th e s uga r br e a d s h a pe d
a ttr a cto r o f Ro s s le r (s e e Br iggs a n d Pe a t, 1989, fo r
illus tr a tio n ).
T h e a ttr a cto r cr e a te s a n implicit o r d e r with in ch a o s .
In s id e th e a ttr a cto r s pa ce , th e s y s te m be h a vio r is h igh ly
co mple x a n d un s ta ble . Ho we ve r , wh e n lo o kin g a t th is
co mple xity we ca n o bs e r ve th a t it is a ls o o r ga n ize d a n d
th a t it r e pr o d uce s a t a s ma lle r s ca le wh a t is o bs e r ve d a t
a mo r e glo ba l le ve l. T h is s ca le in va r ia n t pr o pe r ty h a s
be e n we ll a n a ly ze d by Ma n d e lbr o t (1982a ) in h is wo r k
o n fr a cta ls . Fo r in s ta n ce h e s h o we d th a t s to ck ma r ke t
e vo lutio n o ve r s e ve r a l y e a r s r e fle cte d d a ily a n d mo n th ly
e vo lutio n s . Fo r Ma n d e lbr o t (1982b), a s to ck ma r ke t is
"s e lf s imila r " fr o m th e la r ge s tto th e s ma lle s t s ca le s . As
a co n s e que n ce , it s e e ms th a t ch a o s h a s s e ve r a l la y e r s o f
o r d e r in gpr o pe r tie s wh ich a r e s imila r a td iffe r e n ts ca le s .
Fin a lly , a la s t pr o pe r ty we wo uld like to d is cus s is
time ir r e ve r s ibility o f a ch a o tic s y s te m. In th e o r y , a n y
s y s te m h a s to co me ba ck o n e d a y to its in itia l s ta te .
Ho we ve r , d ue to th e pe r fe ct s y n ch r o n is m in time a n d
s pa ce be twe e n th e d iffe r e n tva r ia ble s th a t th is r e quir e s ,
it is un like ly th a t th e s a me co n d itio n s will be fo un d
a ga in in a r e a s o n a ble futur e . C o n s e que n tly , th e pr o ba -
bility to s e e a s y s te m "r e ve r s e " to its in itia l s ta te is
e xtr e me ly lo w. Sy s te m be h a vio r , fr o m pr a ctica l r e a s o n ,
wh e n in a ch a o tic s ta te is co n s id e r e d , a s time , ir r e -
ve r s ible . On ce in a s ta te o f ch a o s , th e s y s te m will
pr o ba bly n o t fin d its e lf a ga in in th e s a me s itua tio n in
th e fo r e s e e a ble futur e .
T h e Or ga n iza tio n a s a No n lin e a r Dy n a mic Sy s te m
Or ga n iza tio n s a ls o a r e d y n a mic s y s te ms go ve r n e d by
n o n lin e a r r e la tio n s h ips . As T h o mps o n (1967, p. 6)
po in te d o ut, "th e co mple x o r ga n iza tio n is a s e t o f
in te r d e pe n d e n t pa r ts wh ich to ge th e r ma ke up a wh o le
in th a t e a ch co n tr ibute s s o me th in g a n d r e ce ive s s o me -
th in gfr o m th e wh o le , wh ich in tur n is in te r d e pe n d e n t
with s o me la r ge r e n vir o n me n t." Multiple o r ga n iza -
tio n a l a cto r s , with d ive r s e a ge n d a , in s id e a n d o uts id e
ORGANIZAT ION SC IENC E/Vo l. 6, No . 1, Ja n ua r y -Fe br ua r y 1995 21
th e o r ga n iza tio n , tr y to co o r d in a te th e ir a ctio n s to
e xch a n ge in fo r ma tio n a n d to in te r a ct in o th e r wa y s ,
a n d th e y d o a ll th is in a d y n a mic ma n n e r ; i.e ., y e s te r -
d a y 's a ctio n a ctiva te s a r e a ctio n to d a y wh ich ma y le a d
to a n e w a ctio n to mo r r o w. In th e s a me ve in , a ctio n s
un d e r ta ke n by s o me a cto r s in flue n ce th e a ctio n s in iti-
a te d by o th e r s la te r o n . We a r e in th e r e a lm o f n o n lin -
e a r ity a n d time .
Effe cts o f d e cis io n s a r e r a r e ly d ir e ct a n d in s ta n ta -
n e o us . As Min tzbe r g a n d Wa te r s (1990, p. 4) s a id ,
"'pr e o ccupa tio n with th e d e cis io n s r un s th e r is k o f
imputin ga d ir e ct r e la tio n s h ip be twe e n th e a bs tr a ctio n
o f me n ta l in te n tio n a t th e in d ivid ua l le ve l a n d th e
co n cr e te n e s s o f a ctio n a t th e o r ga n iza tio n a l le ve l."
T h e y s tr e s s th e in d ir e ct o r igin s o f th e a ctio n wh ich is
o bs e r ve d . Pe ttigr e w (1990, p. 10), a ls o , r e co gn ize s th a t
"ch a n ge s h a ve multiple ca us e s a n d a r e to be o bs e r ve d
by lo o ps r a th e r th a n by lin e s ." Mo r e o ve r , o r ga n iza tio n s
e n co mpa s s n ume r o us a cto r s . T h e s e a cto r s h a ve d iffe r -
e n t fr a me s o f r e fe r e n ce (Ka h n e ma n a n d T ve r s ky 1984;
T ve r s ky a n d Ka h n e ma n 1981, 1986), va lue s y s te ms a n d
pr e fe r e n ce s wh ich ch a n ge o ve r time a n d with e xpe r i-
e n ce (Lich te n s te in a n d Slo vic 1971, T ve r s ky e t a l. 1990).
T h e y s o me time s h a ve co n tr a d icto r y o bje ctive s a n d
s ta ke s a n d th e y in te r ve n e a t d iffe r e n t ph a s e s o f th e
e va lua tio n -ch o ice -a ctio n pr o ce s s . As a r e s ult, n o d ir e ct
r e la tio n s h ip ca n e xis tbe twe e n th e d iffe r e n t a ctio n s a n d
a ctio n -ta ke r s o f th e o r ga n iza tio n .
With r e ga r d to s tr a te gy fo r ma tio n pr o ce s s e s , we ge n -
e r a lly o bs e r ve th a t s y s te ma tic, co o r d in a te d , pla n n e d
a n d th o ugh t-o ut a ppr o a ch e s a r e co mbin e d with mud -
d lin g th r o ugh , h e s ita tio n , a n d impuls ive r e s po n s e s . In
th is s itua tio n , th e pr o ce s s is n o t a s lin e a r a n d a s
s mo o th a s a r a tio n a l min d migh t wis h . T h e r a tio n a l,
lin e a r , pla n n e d pr o ce s s , wh e r e r is k is me a s ur e d , e va lu-
a te d a n d imple me n te d by a un ique le a d e r is mixe d with
in tuitio n , ch a n ce , a n d o th e r pr o ce s s e s wh e r e s e ve r a l
in te r n a l a n d e xte r n a l o r ga n iza tio n a l a cto r s a ct a n d
in te r a ct, h e s ita te , ta ke a d va n ta ge o f o ppo r tun itie s a n d
mis s o th e r s , a n d a ll o f th e s e in a d y n a mic mo d e .
Min tzbe r ga n d Wa te r s (1985), fo r in s ta n ce , s tr e s s th e
impo r ta n ce o f e me r ge n t s tr a te gie s in th e s tr a te gy fo r -
ma tio n pr o ce s s . T h e y s h o w th a t th e s tr a te gy fo r ma tio n
pr o ce s s is ba s e d n o t o n ly o n d e libe r a te pr o ce s s e s but
ge n e r a lly in vo lve s a lo t o f d y n a mic in te r a ctio n s . In th e
s a me ve in , o th e r a uth o r s s uch a s Kin g a n d C le la n d
(1978), Lo r a n ge a n d Va n cil (1977), Ste in e r (1979),
Wo o ld r id ge a n d Flo y d (1989) s ugge s t th a t s e pa r a tio n
be twe e n fo r ma l a n d in fo r ma l s y s te ms (o r be twe e n s y n -
o ptic a n d in cr e me n ta l pr o ce s s e s ) is d ifficult to ma ke .
We a ls o kn o w th a t s tr uctur e d a n d un s tr uctur e d pr o -
ce s s e s (Min tzbe r g e t a l. 1976), o n o n e h a n d , a n d in -
d uce d a n d a uto n o mo us a ppr o a ch e s (Bur ge lma n 1983),
o n th e o th e r h a n d , co e xis t with in th e fir m. Fin a lly ,
Pin fie ld (1986) s h o ws th a t s tr uctur e d a n d a n a r ch ic pr o -
ce s s e s a r e co mple me n ta r y . In th e fo r me r , d e cis io n s
fo llo w a n o r d e r ly pr o gr e s s io n : pr o ble m id e n tifica tio n ,
s e a r ch fo r s o lutio n a n d s e le ctio n (Glue ck 1980, Spr in ge r
a n d Ho fe r 1978, Sta gn e r 1969). In th e la tte r , d e cis io n s
o r igin a te fr o m o r ga n iza tio n a l "ga r ba ge ca n s " in wh ich
pr o ble ms a r e ge n e r a te d fr o m in s id e a n d o uts id e th e
o r ga n iza tio n a n d th e s o lutio n s a r e th e o utco me o f a n
a ppa r e n t r a n d o m pr o ce s s be twe e n a cto r s (C o h e n e t a l.
1972, Ma r ch a n d Ols e n 1976, Pa d ge tt 1980, Sta r buck
1983).
T h e s e pa r a tio n be twe e n th e ma n a ge r a s a pla n n e r
a n d o r ga n ize r , o n o n e h a n d , a n d a s a h e s ita tin g a n d
s le e pwa lkin g a cto r , o n th e o th e r h a n d , is a r tificia l.
Re a lity is mo r e co mple x, in te r a ctive a n d d y n a mic th a n
th e o n e wh ich is pr e s e n te d by r e d uce d mo d e ls wh ich
a r e in co mple te a t be s t.
iRe a lity
co n ta in s e le me n ts o f
r a tio n a lity , fo r ma lity a n d o r d e r mixe d with in tuitio n ,
in fo r ma lity a n d d is o r d e r .
Ho we ve r , o r ga n iza tio n s ca n n o t be to ta lly a s s imila te d
to n a tur a l s y s te ms , wh e r e la ws a r e immuta ble . It is
like ly th a t th e s tr uctur e o f th e n o n lin e a r d y n a mic o r ga -
n iza tio n a l s y s te m ch a n ge s d ue to th e a ctio n o f a cto r s
in s id e a n d o uts id e th e o r ga n iza tio n . It a ls o ch a n ge s
s ubje ct to le a r n in g a n d e xpe r ie n ce . Re la tio n s h ips be -
twe e n d iffe r e n t o r ga n iza tio n a l s y s te m e le me n ts d o n o t
r e ma in th e s a me fo r e ve r . T h is a d d s a s o ur ce o f in s ta bil-
ity a n d , a t th e s a me time , a n e w la y e r o f co mple xity . T o
co mplica te th in gs fur th e r , th e o r ga n iza tio n e vo lve s in
a n e n vir o n me n t wh ich h a s its o wn d y n a mics a n d with
wh ich a co n tin uo us e xch a n ge o f in fo r ma tio n , r e s o ur ce s
a n d e n e r gy ta ke s pla ce (T h o mps o n 1967). As Ba r n a r d
(1968, p. 6) s a y s , "th e ca us e o f th e in s ta bility a n d
limite d d ur a tio n o f fo r ma l o r ga n iza tio n s lie s in th e
fo r ce s o uts id e ." Or ga n iza tio n s ca n a tte mpt to in s ula te
th e ms e lve s fr o m th e e n vir o n me n t by co n tr o llin g th e
e xte r n a l r e s o ur ce s it pr o vid e s (Pfe ffe r a n d Sa la n cick
1978) o r th e y ca n e n a ct it (We ick 1979). T h e e n vir o n -
me n t migh t a ls o a ct in s e le ctin g th e o r ga n iza tio n s be s t
fitte d fo r s ur viva l (Ald r ich 1979, Ha n n a n a n d Fr e e ma n
1977). As a r e s ult, th e o r ga n iza tio n be h a vio r is s ubje ct
to e xte r n a l fo r ce s . An d th e d y n a mics o f th e s e fo r ce s
a r e impo s s ible to pr e d ict o r e ve n d e s cr ibe with pr e ci-
s io n a n d co mpr e h e n s ive n e s s .
C h a o s th e o r y , wh ich h a s r e ce ive d a gr e a t d e a l o f
a tte n tio n fr o m r e s e a r ch e r s in th e n a tur a l s cie n ce s , is
pr o ba bly d ifficultto a pply to le s s s tr uctur e d a r e a s s uch
a s ma n a ge me n t. Ho we ve r , it s e e ms th a t th e qua lita tive
pr o pe r tie s o f ch a o s th e o r y h a ve a n e xpla n a to r y a n d
in te gr a tive po we r th a t o r ga n iza tio n th e o r ie s co uld us e
22 ORGANIZAT ION SC IENC E/Vo l. 6, No . 1, Ja n ua r y -Fe br ua r y 1995
to th e ir a d va n ta ge . T h e qua lita tive pr o pe r tie s e vo ke d
by ch a o s th e o r y -s e n s itivity to in itia l co n d itio n s ,
s tr a n ge a ttr a cto r s , s ca le in va r ia n ce , time ir r e ve r s ibility ,
a n d bifur ca tio n pr o ce s s e s -a r e po we r ful e n o ugh to
o ffe r a n o th e r pe r s pe ctive fr o m wh ich to vie w th e wa y
o r ga n iza tio n s wo r k.
T h e Or ga n iza tio n a s a C h a o tic Sy s te m
In th e r e vie w pr e s e n te d a bo ve o n n o n lin e a r d y n a mic
s y s te ms a n d ch a o s th e o r y , we h a ve s e e n th a t d e te r min -
is tic ch a o s ca n be fo un d wh e n th e r e is th e s imulta n e -
o us in flue n ce o f co un te r a ctin g fo r ce s . Or ga n iza tio n s
a ls o h a ve co un te r a ctin g fo r ce s a t pla y . So me fo r ce s
pus h th e s y s te m to wa r d s ta bility a n d o r d e r ; th e s e in -
clud e th e fo r ce s o f pla n n in g, s tr uctur in ga n d co n tr o l-
lin g. So me o th e r fo r ce s pus h th e s y s te m to wa r d in s ta -
bility a n d d is o r d e r : th e fo r ce s o f in n o va tio n , in itia tive
a n d e xpe r ime n ta tio n . T h e co uplin go f th e s e fo r ce s ca n
le a d to a h igh ly co mple x s itua tio n : a ch a o tic o r ga n iza -
tio n .
Wo r k o n e n tr e pr e n e ur s h ip (Bur ge lma n 1983, By -
gr a ve 1989) is illus tr a tive o f th e wa y s o me o r ga n iza tio n s
cr e a te th e n e ce s s a r y in s ta bilitie s to e xpe r ime n t with
d iffe r e n t ty pe s o f in n o va tio n s . By givin gth e o r ga n iza -
tio n a l a cto r s e n o ugh fr e e d o m to e xpe r ime n t with n e w
wa y s o f d o in g th in gs o r by givin g th e m e n o ugh r e -
s o ur ce s to e xplo r e , with o ut co n s tr a in t, n e w a r e a s o f
gr o wth , th e o r ga n iza tio n cr e a te s a ca ta lo gue o f r e -
s po n s e s to d iffe r e n t a n d , a s y e t, un kn o wn d e ma n d s
fr o m th e co mpe titive e n vir o n me n t. In th e s a me ve in ,
imple me n ta tio n o f n e w fo r ms o f o pe r a tio n , in pa r a lle l
with tr a d itio n a l wa y s o f d o in g th in gs , is ba s e d o n th e
s a me pr e mis e . T h e o bje ctive is to e xpe r ime n t a n d le a r n
va r io us mo d e s o f wo r k wh ich ma y la te r be co me th e
d o min a n t fe a tur e . T h e s e e xpe r ime n ts , th r o ugh "bo o t-
le ggin g" o r th r o ugh pla n n e d d e cis io n s , e n a ble th e o r -
ga n iza tio n to cr e a te a r e pe r to r y o f r e s po n s e s to e n vi-
r o n me n ta l d e ma n d . T h e r e s po n s e s in th is r e pe r to r y
wh ich will ultima te ly pr o ve to be us e ful ca n n o t be
pr e d icte d in a d va n ce .
T h e cr e a tio n o f s uch a r e pe r to r y is pe r fe ctly co h e r -
e n t with th e r e co mme n d a tio n s o f Ny s tr o m e t a l. (1976).
T h e s e a uth o r s s tr e s s th e n e e d fo r th e o r ga n iza tio n to
d e ve lo p a s e t o f n e w r e s po n s e s . Wh e n co n fr o n te d with
a n un ce r ta in e n vir o n me n t, th e o r ga n iza tio n , if fo r ce d
to ch a n ge its tr a d itio n a l r e s po n s e s , ca n s e le ct fr o m its
r e pe r to r y o f n e w fo r ms o f r e la tio n s h ips a n d a r r a n ge -
me n ts . In th e s a me ve in , We ick (1977) a n d Ma r ch
(1981) s ugge s t th a t a ctivitie s wh ich a r e n o t d ir e ctly
co n n e cte d with th e o r ga n iza tio n 's mis s io n a r e a me a n s
to impr o ve its ca pa city o f r e s po n s e to co mple xity a n d
to ch a n gin g co n d itio n s . We ick (1977), fo r in s ta n ce ,
th in ks th a t s e lf-o r ga n iza tio n o r igin a te s fr o m e xpe r i-
me n ta tio n . Se lf-o r ga n iza tio n is a n o r ga n iza tio n wh ich
is a ble to d is co ve r , th r o ugh e xpe r ime n ta tio n , a n s we r s
to its pr o ble ms . It s e le cts a d a pte d mo d e s o f a ctio n to
its ch a n gin g wo r kin g co n d itio n s . Sin ce pr e d ictio n is
d ifficult in th is s itua tio n , th e o r ga n iza tio n d e ve lo ps a
ca ta lo gue o f r e s po n s e s a n d s timula te s le a r n in go ppo r -
tun itie s th r o ugh multiple e xpe r ime n ts . As a co n s e -
que n ce , it pr e pa r e s its e lf fo r n e w fo r ms o f o pe r a tio n
wh ich ca n be imple me n te d wh e n th e s e n e w fo r ms
be co me th e r e quir e d a n s we r s to th e e me r ge n t wo r kin g
co n d itio n s . As We ick (1977, 1979) h a s s ugge s te d , it is
fr e que n tly pr e fe r a ble to le t o r ga n iza tio n s fin d fo r
th e ms e lve s th e ty pe s o f o pe r a tio n th e y a r e be s t a d a pte d
to . Fur th e r mo r e , a s No n a ka (1988, p. 64) s a y s , "fo r a n
o r ga n iza tio n to e vo lve co n tin uo us ly , it is n e ce s s a r y to
a llo w fr e e d o m a mo n gth e co n s titue n t un its in th e o r ga -
n iza tio n , to ge n e r a te cr e a tive co n flicts be twe e n th e m."
By d o in g s o , th e o r ga n iza tio n is fr e e to que s tio n a n d
ch a lle n ge its wa y s o f o pe r a tin g a n d , a s a co n s e que n ce ,
migh t be in a be tte r po s itio n to fin d a n a d e qua te
co ur s e o f a ctio n . T h us e xpe r ime n ta tio n is d e libe r a te ly
n o t a ime d a t a s pe cific o bje ctive , e ve n th o ugh th e
fa culty fo r e xpe r ime n ta tio n h a s be e n give n d e libe r a te ly
to th e o r ga n iza tio n . Fin a lly , Pa s ca le (1990) d e s cr ibe s
th e s e lf-r e n e win g o r ga n iza tio n a s o n e wh ich d e libe r -
a te ly cr e a te s in te r n a l in s ta bility . C o n tr ibutio n s o n
s e lf-r e n e win g a n d s e lf-o r ga n izin go r ga n iza tio n s a r e co -
h e r e n t with wo r ks o n o r ga n iza tio n a l le a r n in g. Fo r in -
s ta n ce , a cco r d in gto Se n ge (1990), le a r n in gis a willin g-
n e s s to e xpe r ime n t a n d to s e a r ch fo r o th e r wa y s o f
d o in gth in gs th a n th o s e us e d in th e pa s t. It is th r o ugh
e xpe r ime n ta tio n th a t o r ga n iza tio n a l a cto r s , a n d th e n
th e o r ga n iza tio n its e lf, build th e ir kn o wle d ge . Kn o wl-
e d ge , o n ce put in to pr a ctice , be co me s th e r e a l s o ur ce
o f le a r n in g. In th e s a me ve in , Ar gy r is a n d Sch o n (1978)
s e e s e e d s o f ch a n ge be h in d th e n ume r o us in s ta bilitie s
a n d in co h e r e n ce s wh ich ge n e r a lly go with pr o gr a mme d
a ctio n s .
Expe r ime n ta tio n , in n o va tio n , a n d in d ivid ua l in itia -
tive , wh e n th e y e xis t, a r e s o ur ce s o f in s ta bility a n d te n d
to pus h th e o r ga n iza tio n o ut o f its pr o gr a mme d co ur s e ,
o ut o f its s ta ble e quilibr ium. T h e y d o n o t ke e p th e
o r ga n iza tio n o n its pla n n e d tr a ck a n d o bje ctive . On th e
co n tr a r y , by e xplo r in gn e w a r e a s , th e y a r e a s o ur ce o f
d is r uptio n a n d d is o r d e r . Ho we ve r , th e o r ga n iza tio n is
n o t ma d e o n ly o f e xpe r ime n ta tio n , d is o r d e r a n d ch a n ge ;
in d e e d , un d e r s uch cir cums ta n ce s , th e o r ga n iza tio n ,
lite r a lly , co uld n o t be a n o r ga n iza tio n . It wo uld be a
ma e ls tr o m in pe r pe tua l ch a n ge a n d r e vo lutio n . As Da ft
a n d We ick (1984, p. 286) s a y , ma n a ge r s will be fo r ce d
ORGANIZAT ION SC IENC E /Vo l. 6, No . 1, Ja n ua r y -Fe br ua r y 1995 23
to "wa d e in to th e o ce a n o f e ve n ts th a t s ur r o un d th e
o r ga n iza tio n a n d a ctive ly tr y to ma ke s e n s e o f th e m."
T h e o r ga n iza tio n n e e d s o r d e r a n d s ta bility to be a ble
to a ch ie ve its mis s io n a s a n o r ga n iza tio n . As Da ft a n d
Le n ge l (1984, p. 192) put it "in r e s po n s e to th e co n fu-
s io n a r is in g fr o m bo th th e e n vir o n me n t a n d in te r n a l
d iffe r e n ce s , o r ga n iza tio n s mus t cr e a te a n a cce pta ble
le ve l o f o r d e r a n d ce r ta in ty ." T h e y co n cur with Ba r n a r d
(1968, p. 6) fo r wh o m "th e s ur viva l o f a n o r ga n iza tio n
d e pe n d s upo n th e ma in te n a n ce o f a n e quilibr ium o f
co mple x ch a r a cte r in a co n tin uo us ly fluctua tin g e n vi-
r o n me n t." Or d e r is n e ce s s a r y , a ls o , to e n a ble th e o r ga -
n iza tio n a l a cto r s to po s itio n th e ms e lve s with in th e
po we r s tr uctur e a n d th e h ie r a r ch y . Or d e r is a ls o n e ce s -
s a r y to cr e a te th e fa cilita tin g co n d itio n s o f d e cis io n
ma kin g. Fur th e r mo r e , o r d e r co n tr ibute s to th e clo s ur e
o f a to o co mple x s y s te m fo r a co gn itive ly limite d min d .
As We ick (1979, p. 3) s ugge s ts , o r ga n izin g"is d e fin e d
a s a co n s e n s ua lly va lid a te d gr a mma r fo r r e d ucin g
e quivo ca lity by me a n s o f s e n s ible in te r lo cke d be h a vio r ."
Fin a lly , o r d e r h e lps in cr e a tin g th e a ppe a r a n ce o f
ce r ta in ty . Fo r in s ta n ce , r e lia n ce o n s ta n d a r d ize d d e ci-
s io n r ule s is us e d to "a vo id " un ce r ta in ty (C y e r t a n d
Ma r ch 1963). With ce r ta in ty , tr a d itio n a l r a tio n a l ma n -
a ge me n t s ch e me s ca n be a pplie d to th e ir full e xte n t.
Mo r e o ve r , co gn itive d is s o n a n ce , wh ich is cr e a te d wh e n
ma n a ge r s a r e co n fr o n te d with a pr o ble m th a t th e y
in tuitive ly kn o w to be impo s s ible to s o lve , ca n be
r e d uce d .
In te r n a l co n tr o l pr o ce e d s fr o m th e s a me lo gic: to
ma s te r wh a t th e o r ga n iza tio n is d o in g. Fo r in s ta n ce ,
th e co n tr o l o f ma n a ge r s by th e o r ga n iza tio n 's s h a r e -
h o ld e r s (Fa ma a n d Je n s e n 1983, Je n s e n a n d Me cklin g
1976) is s uppo s e d to r e s ult in a be tte r a lign me n t o f th e
ma n a ge r s ' a n d th e o wn e r s ' in te r e s ts . It s h o uld ma ke
th e ir a ctio n s mo r e co h e r e n t a n d pr e d icta ble . Sin ce , to
figh t a ga in s t th e co gn itive limita tio n s o f th e o r ga n iza -
tio n a l a cto r s , th e o r ga n iza tio n 's ta s k is d e co mpo s e d in
a h ie r a r ch ica l ma n n e r , ma n a ge me n t co n tr o l a s a me a n s
o f co o r d in a tio n is h e lpful. Ma n a ge me n t co n tr o l, a t th e
d iffe r e n t o r ga n iza tio n a l le ve ls , a ims a t min imizin gth e
a ge n cy co s ts be twe e n th e va r io us la y e r s o f th e h ie r a r -
ch y . He r e , a ls o , it s e cur e s a be tte r a lign me n t o f th e
d iffe r e n t o r ga n iza tio n a l a cto r s ' a ctio n s . As a co n s e -
que n ce , ma n a ge me n t co n tr o l, a s fo r ma l to o l o f ma n -
a ge me n t, co n tr ibute s to a be tte r co o r d in a tio n a n d mo n -
ito r in g o f th e d ive r s e ta s ks th e o r ga n iza tio n h a s to
un d e r ta ke in o r d e r to fulfill its mis s io n .
Pla n n in g is fr e que n tly pr e s e n te d a s a n e ffe ctive
me a n s th a t fir ms us e to a ch ie ve th e ir mis s io n . T h is
a ffir ma tio n , h o we ve r , h a s be e n s tr o n gly ch a lle n ge d .
C y e r t a n d Ma r ch (1963), fo r in s ta n ce , s ugge s t th a t
pla n n in g migh t o n ly be a n a r tifa ct. If th is is th e ca s e ,
wh y d o s o ma n y o r ga n iza tio n s s till us e pla n n in g? Sin h a
(1990) pr o vid e s a n a n s we r . He s h o ws th a t fo r ma l pla n -
n in g s y s te ms co n tr ibute to d e cis io n s wh ich a r e pe r -
ce ive d a s be in g impo r ta n t a n d r is ky . He r e , pla n n in gis
pr e s e n te d a s a me a n s to ma n a ge un ce r ta in ty . He is in
a gr e e me n t with Ar ms tr o n g (1982), wh o s ugge s ts th a t
pla n n in g is pa r ticula r ly impo r ta n t in s itua tio n s wh e r e
ch a n ge s a r e cr ucia l. By fo r ma lizin gth e d e cis io n -ma k-
in gpr o ce s s , ma n a ge r s cr e a te is la n d s o f ce r ta in ty . An d
o n th e s e is la n d s , th e y ca n pr o ce e d in a r a tio n a l ma n -
n e r . Fur th e r mo r e , pla n n in g, by pr o vid in ga n in fo r ma -
tio n n e two r k a n d e n co ur a gin g co mmun ica tio n (Quin n
1980), is a me a n s to d e a l with impo r ta n t d e cis io n s ;
impo r ta n t d e cis io n s wh ich a r e ge n e r a lly ch a r a cte r ize d
by n ume r o us r a mifica tio n s a n d co mple xity . T h a n ks to
th e d e co mpo s itio n o f a br o a d mis s io n in to e le me n ta r y
ta s ks , pla n n in gimpr o ve s th e r e a d a bility o f th e o r ga n i-
za tio n a n d its n ume r o us lin ks with th e e n vir o n me n t. It
h e lps in clo s in g a co mple x s y s te m th a t is to o co mple x
to be d e a lt with in a glo ba l ma n n e r .
T h e que s tio n r e ma in s a s to wh a t th e r e a l co n tr ibu-
tio n s o f fo r ma lize d a ppr o a ch e s a r e a n d wh a t pus h e s
th e o r ga n iza tio n to co n tr o l a n d pla n ? La n gle y (1988,
1990) s h o ws th a t th e us e o f fo r ma l to o ls h a s o th e r
o bje ctive s th a n co n tr ibutin gs ubs ta n tive ly to th e d e ci-
s io n . Fo r ma l to o ls a r e a ls o us e d a s a me a n s o f pe r s ua -
s io n a n d to s a ve time . Sh e a gr e e s with Quin n (1980)
wh e n h e s a y s th a t pla n n in g is pa r tly us e d to ma ke
ma n a ge r s fe e l mo r e co mfo r ta ble . Sh e a ls o a gr e e s with
Bo we r (1970), Hicks o n e t a l. (1986) wh e n th e y s ugge s t
th a t fo r ma l a n a ly s is is fr e que n tly us e d to jus tify d e ci-
s io n s a fte r th e fa ct. T h e s e r e a s o n s , wh ich s tr e s s th e
a ppa r e n t n o n utilita r ia n pur po s e o f fo r ma l a ppr o a ch e s ,
pr o ba bly h a ve a ps y ch o lo gica lly -ba s e d o r igin th a t th e
co gn itive d is s o n a n ce th e o r y o f Fe s tin ge r (1957) ca n
h e lp to e xpla in .
T o figh t a ga in s t th e fe e lin g th a t th e y a r e in a s itua -
tio n wh e r e th e y a r e po we r le s s , wh ich is in to ta l co n tr a -
d ictio n with th e ir mis s io n a n d "r a is o n d 'e tr e ," ma n -
a ge r s r e ly o n fo r ma l to o ls to cr e a te a n illus io n : th e
illus io n o f ma n a gin g. Fo r in s ta n ce , "th e ga th e r in g o f
in fo r ma tio n pr o vid e s a r itua lis tic a s s ur a n ce th a t a ppr o -
pr ia te a ttitud e s a bo ut d e cis io n ma kin ge xis t. ( ... ) Dis -
pla y in g th e s y mbo l r e a ffir ms th e impo r ta n ce o f th is
s o cia l va lue a n d s ign a ls pe r s o n a l a n d o r ga n iza tio n a l
co mpe te n ce " (Fe ld ma n a n d Ma r ch 1981 pp. 177, 182).
By d o in g s o , ma n a ge r s a vo id a r e a lity wh ich is in
co mple te co n tr a d ictio n with wh a t th e y a r e s uppo s e d to
d o a n d a r e pa id fo r . It is mo r e th e s e n s e o f d o in ga n d
ma s te r in g th a t th e fo r ma l to o ls pr o vid e , th a n th e ir
e ffe ctive us e wh ich ma tte r s . As a co n s e que n ce , ma n -
a ge r s ca n r e d uce a d is s o n a n ce wh ich h a s be e n cr e a te d
by th e ir fe e lin g o f po we r le s s n e s s , wh e n co n fr o n te d by a
to o co mple x a n d un pr e d icta ble r e a lity .
Ho we ve r , th e o r d e r th a t fo r ma l to o ls pr o vid e , is a ls o
un s e ttlin g, a s We ick (1977), in h is fa mo us s tud y o n th e
Apo llo 3 mis s io n h a s s h o wn . In th e s a me ve in , Mille r
a n d Fr ie s e n (1980, p. 611) co n clud e th a t mo me n tum,
i.e ., co n tin uity a n d s ta bility o f ch a n ge in s tr a te gy a n d
s tr uctur e d ue to pa s t e xpe r ie n ce s , o r ga n iza tio n a l cul-
tur e , po litica l co a litio n s a n d th e e xis te n ce o f fo r ma l
pr o gr a ms , ca n be "ve r y co s tly wh e n it pr o tr a cts a n
o r ie n ta tio n th a t h a s pr o ve d to be d y s fun ctio n a l." Fi-
n a lly , s e a r ch fo r o r d e r th r o ugh e xce s s ive r a tio n a lis m
ca n be d is r uptive . Fo r in s ta n ce , "ma n a ge r s in bigco m-
pa n ie s o fte n s e e k o r d e r ly a d va n ce th r o ugh e a r ly ma r -
ke t r e s e a r ch s tud ie s o r Pe r t pla n n in g. Ra th e r th a n
ma n a gin g th e in e vita ble ch a o s (ta ke n h e r e a s a
me ta ph o r ) o f in n o va tio n pr o d uctive ly , th e s e ma n a ge r s
s o o n d r ive o ut th e ve r y th in gs th a t le a d to in n o va tio n in
o r d e r to pr o ve th e ir a n n o un ce d pla n s " (Quin n 1985,
p. 77, o ur pa r e n th e s is ). Eve n th o ugh fo r ma l a p-
pr o a ch e s h e lp in clo s in gth e o r ga n iza tio n a l s y s te m a n d
ma ke it mo r e pr e d icta ble , th e y in cr e a s e th e r e s is ta n ce
to ch a n ge a n d co n tr ibute , th r o ugh a pe r io d ic co uplin g,
in cr e a tin ga h igh ly co mple x s itua tio n . In th is co mple x
s itua tio n , o r d e r ma y le a d to ch a o s .
A Po te n tia lly C h a o tic Or ga n iza tio n
C o un te r a ctin gfo r ce s a r e a t pla y in mo s t o r ga n iza tio n s .
So me o r ga n iza tio n s migh t be d o min a te d by fo r ce s o f
s ta bility , s o me by fo r ce s o f in s ta bility o r , fin a lly , bo th
fo r ce s migh t be a t pla y in a ba la n ce d ma n n e r a n d le a d
to d e te r min is tic ch a o s . We kn o w th a t ma n y n o n lin e a r
d y n a mic s y s te ms a r e fr e que n tly ch a o tic wh e n th e n um-
be r o f s y s te m va r ia ble s is e qua l to o r gr e a te r th a n
th r e e . T h is is o bvio us ly th e ca s e fo r ma n y o r ga n iza -
tio n s . C h a o s is a ls o mo r e like ly wh e n th e s y s te m va r i-
a ble s fo llo w d iffe r e n tpe r io d icity pa tte r n s a n d a r e h igh ly
co uple d with e a ch o th e r , a co n d itio n wh ich is fr e -
que n tly me t in o r ga n iza tio n s . Fo r e xa mple , Pe r r o w
(1984), in h is s tud y o f "n o r ma l a ccid e n ts ," s tr e s s e s th e
fa ct th a t co mple x s y s te ms te n d to d e ve lo p be h a vio r s o f
th e ir o wn . As a co n s e que n ce , h e s h o ws th a t cr is e s a r e
mo r e th e r e s ult o f co mple x, tigh tly co uple d r e la tio n -
s h ips th a n th e o utco me o f in a d e qua te h uma n a ctio n s .
Ba s e d o n th e e mpir ica l a n d th e o r e tica l e vid e n ce
d is cus s e d a bo ve , it s e e ms r e a s o n a ble to a s s ume th a t
o r ga n iza tio n s a r e s ubje ct to co un te r a ctin gfo r ce s wh ich
fo llo w va r io us pe r io d ic pa tte r n s a n d wh ich ma y co n ta in
th e s e e d s o f ch a o s . T h is le a d s to th e fir s ts e t o f pr o po -
s itio n s :
PROPOSIT ION 1. Or ga n iza tio n s a r e po te n tia lly ch a -
o tic.
PROPOSIT ION la . T h e gr e a te r th e n umbe r o f co un te r -
a ctin gfo r ce s in a n o r ga n iza tio n , th e h igh e r th e like lih o o d
o f e n co un te r in gch a o s .
PROPOSIT ION lb. T h e la r ge r th e n umbe r o f fo r ce s
with d iffe r e n tpe r io d ic pa tte r n s , th e h igh e r th e like lih o o d
o f e n co un te r in gch a o s .
Bifur ca tio n Pr o ce s s T o wa r d C h a o s
We h a ve s e e n th a t a s y s te m e vo lve s fr o m o n e s ta te to
th e o th e r th r o ugh a pr o ce s s o f pe r io d d o ublin g o r
bifur ca tio n wh e n th e co uplin g be twe e n va r io us pe r i-
o d ic va r ia ble s ch a n ge s . T h is ch a n ge d o e s n o t fo llo w a
co n tin uum but ta ke s pla ce a br uptly in a d is cr e te ma n -
n e r . We e xpe ct to s e e a s imila r ph e n o me n o n ta kin g
pla ce in o r ga n iza tio n s . T h is is co n s is te n t with th e qua n -
tum ch a n ge th e o r y o f Mille r a n d Fr ie s e n (1984) a n d
th e wo r ks o f Gr e in e r (1972), Mille r a n d Fr ie s e n (1980),
Min tzbe r g a n d Wa te r s (1985) wh e r e th e y s h o w th a t
o r ga n iza tio n s d o n o t e vo lve in a co n tin uo us ma n n e r
but s te p-by -s te p.
Wh a te ve r th e s ta te -s ta ble e quilibr ium, pe r io d ic o r
ch a o tic-th e o r ga n iza tio n is in , it ca n be d is r upte d .
Fo r in s ta n ce , o r ga n iza tio n a l a cto r s h a ve th e po we r to
ch a n ge th e r e la tive impo r ta n ce o f th e d y n a mic fo r ce s
a two r k. T h e ch a n ge ca n a ls o ta ke pla ce th r o ugh le a r n -
in g (La n t a n d Me zia s 1992, Ma r ch 1991) a n d e xpe r i-
e n ce (T us h ma n a n d Ro ma n e lli 1985). In d e e d , le a r n in g
a n d e xpe r ie n ce mo d ify th e s tr e n gth a n d th e n a tur e o f
th e r e la tio n s h ips be twe e n o r ga n iza tio n a l va r ia ble s . T h e
ch a n ge , fo r in s ta n ce , ca n le a d th e o r ga n iza tio n fr o m a
s ta ble to a ch a o tic s ta te o r fr o m a ch a o tic to a s ta ble
s ta te via pe r io d ic be h a vio r s . Me a n wh ile , th e o r ga n iza -
tio n is like ly to r e ma in in o n e o f its d y n a mic e quilibr ia .
T h is le a d s to th e s e co n d pr o po s itio n :
PROPOSIT ION 2. Or ga n iza tio n s mo ve fr o m o n e d y -
n a mic s ta te to th e o th e r th r o ugh a d is cr e te bifur ca tio n
pr o ce s s .
PROPOSIT ION 2a . An o r ga n iza tio n will a lwa y s be in
o n e o f th e fo llo win gs ta te s : s ta ble e quilibr ium, pe r io d ic
e quilibr ium, o r ch a o s .
PROPOSIT ION 2b. A pr o gr e s s ive a n d co n tin uo us
ch a n ge o f th e r e la tio n s h ips be twe e n two o r mo r e o r ga n i-
za tio n a l va r ia ble s le a d s a n o r ga n iza tio n , in a d is cr e te
ma n n e r , fr o m a s ta ble to a ch a o tic s ta te via a n in te r me -
d ia r y pe r io d ic be h a vio r .
Pr e d ictio n Impo s s ibility
Wh e n in a ch a o tic d o ma in , n o n lin e a r d y n a mic s y s te ms
h a ve a s e n s itive d e pe n d e n ce o n th e in itia l co n d itio n s ,
i.e ., a s ma ll ch a n ge in o n e va r ia ble h a s a n un pr e -
d icta bly la r ge impa ct o n th e s y s te m's e vo lutio n . T h is is
th e fa mo us "butte r fly " e ffe ct. T h e r e is a n e quiva le n t in
th e r e a lm o f o r ga n iza tio n s . Fo r in s ta n ce , Eis e n h a r d t
a n d Sch o o n h o ve n (1990), r e jo in in g Kimbe r ly (1975)
a n d Stin ch co mbe (1965), s pe cula te th a t o r ga n iza tio n a l
gr o wth s tr o n gly d e pe n d s o n th e fo un d in g co n d itio n s .
T h e y o bs e r ve th a t in itia l, s ma ll a d va n ta ge s cr e a te d n e w
a d va n ta ge s in th e futur e fo r th e n e wly fo un d e d fir m. In
th is s itua tio n , a ls o , a s ma ll ca us e ca n h a ve a bige ffe ct.
As a po te n tia lly ch a o tic s y s te m, th e o r ga n iza tio n 's
e vo lutio n ca n n o t be pr e d icte d . Eve n in th e ca s e o f a
s ma ll ch a n ge , with o ut r a d ica l s h o cks , it is jus t a que s -
tio n o f time be fo r e a n un e xpe cte d be h a vio r d e ve lo ps .
As a co n s e que n ce , n o o n e ca n pr e d ict th e lo n g te r m
be h a vio r o f a n o r ga n iza tio n wh e n in a ch a o tic s ta te ,
r e ga r d le s s o f th e ty pe a n d d e gr e e o f ch a n ge . Nume r o us
e xa mple s e xis t wh e r e e ve n ts d o n o t ta ke pla ce a s
e xpe cte d a n d wh e r e ma n a ge r s a d mit th e ir po we r le s s -
n e s s to pr e d ict wh a t will h a ppe n to mo r r o w (s e e , fo r
e xa mple , Is e n be r g 1988). In ma n y s itua tio n s , ma n a ge r s
ma ke be ts o n th e futur e s in ce th e y ca n n o t r e ly o n
fo r e ca s ts . Wh a te ve r th e qua lity o f th e ma n a ge r s a n d
th e qua lity o f th e a ctio n s , it is th e e n vir o n me n t a n d th e
in te r n a l o r ga n iza tio n a l d y n a mics th a t ma tte r mo s t.
Ho we ve r , be tte r pr e d icta bility ca n be a ch ie ve d if th e
s y s te m is lin e a r ize d . Lin e a r iza tio n o f th e s y s te m ma ke s
th e lin k be twe e n ca us e a n d e ffe ct mo r e d ir e ct. In
ma th e ma tics , lin e a r iza tio n is br o ugh ta bo utwith a s ma ll
va r ia tio n s a n a ly s is . By pr o ce e d in g by s ma ll s te ps , n o n -
lin e a r s y s te ms a r e tr a n s fo r me d in to lin e a r r e la tio n s .
Sma ll va r ia tio n s a n a ly s is is th e ma th e ma tica l e quiva -
le n t o f wh a t Br a y br o o ke a n d Lin d blo m (1970), with
th e ir d is jo in te d in cr e me n ta lis m, a n d Quin n (1980), with
h is lo gica l in cr e me n ta lis m, pr o po s e fo r th e o r ga n iza -
tio n . T h e s e a r e s te p-by -s te p a ppr o a ch e s wh ich a llo w
ma n a ge r s to pr o ce e d ma r gin a lly . By d o in gs o , th e ma n -
a ge r s a r e in a po s itio n to o bs e r ve th e d ir e ct e ffe cts o f
th e ir a ctio n s . As a co n s e que n ce , th e y ca n mo d ify th e
th r us t o f th e ir e ffo r t in a n a lmo s t co n tin uo us ma n n e r
a n d ma ke th e n e ce s s a r y r e o r ie n ta tio n s . Pr o ce e d in g in -
cr e me n ta lly impr o ve s th e pr e d icta bility o f wh a t ma n -
a ge r s d o . Ho we ve r , wh e n th e o r ga n iza tio n is in its
ch a o tic d o ma in , pr e d ictio n ca n o n ly be in th e ve r y
s h o r t te r m, be ca us e in th e lo n gte r m, e ve n th e s ligh te s t
va r ia tio n ca n h a ve a gr e a t impa ct o n th e o r ga n iza tio n .
In th e s a me ve in , th e r e a r e ma n y in s ta n ce s wh e r e
in cr e me n ta lis m is impo s s ible a n d wh e r e la r ge ch a n ge s
will h a ve to be ma d e . In s uch ca s e s , in itia l co n d itio n s
will h a ve a d e fin ite impa ct o n th e o r ga n iza tio n , wh a t-
e ve r th e h o r izo n . Ba s e d o n th e d is cus s io n a bo ve , a
th ir d pr o po s itio n ca n be ma d e :
PROPOSIT ION 3. Fo r e ca s tin gis impo s s ible , e s pe cia lly
a t a glo ba l s ca le a n d in th e lo n gte r m.
PROPOSIT ION 3a . Wh e n in a ch a o tic s ta te , ce te r is
pa r ibus , th e impa ct o f a ch a n ge h a s a n un pr e d icta ble
lo n gte r m e ffe ct.
PROPOSIT ION 3b. Wh e n in a ch a o tic s ta te , ce te r is
pa r ibus , th e impa ct o f a n in cr e me n ta l ch a n ge ca n be
pr e d icte d in th e ve r y s h o r t te r m.
Or ga n iza tio n a l C o n figur a tio n s a s Str a n ge Attr a cto r s
With in th e ch a o tic d o ma in , two s itua tio n s ma y o ccur :
fir s t, a s itua tio n wh e r e th e e n tir e d o ma in ca n be e x-
plo r e d by th e o r ga n iza tio n (th is is th e ca s e o f "d e -
te r min is tic n o is e ") a n d , s e co n d , a s itua tio n wh e r e a t-
tr a cto r s limitbe h a vio r to a s ubs e t o f th e d o ma in . In th e
fo r me r ca s e , un pr e d icta bility is th e h igh e s t. In th e
la tte r , pa tte r n s a ppe a r : th e s tr a n ge a ttr a cto r . With in a n
a ttr a cto r , th e r e is s till a h igh d e gr e e o f fr e e d o m, but
be h a vio r a n d , a s a co n s e que n ce , un pr e d icta bility a r e
limite d . Pa r ticula r ly in th e ca s e o f d is s ipa tive s y s te ms
wh ich e xch a n ge e n e r gy with th e ir e n vir o n me n t (a s it is
th e ca s e o f o r ga n iza tio n s ), is la n d s o f s ta bility a r e like ly
to e me r ge in a s e a o f ch a o s . T h e s e is la n d s a r e th e
s tr a n ge a ttr a cto r s . It is a d mitte d th a t th e gr e a te r th e
d is s ipa tio n is , i.e ., th e gr e a te r th e e xch a n ge o f e n e r gy
a n d r e s o ur ce s with th e e n vir o n me n t, th e fa s te r th e
s y s te m te n d s to wa r d s its a ttr a cto r . T h e s e a ttr a cto r s
h a ve a n o r ga n iza tio n a l e quiva le n t: th e o r ga n iza tio n a l
co n figur a tio n s wh ich d e mo n s tr a te r e gula r itie s in th e ir
ma cr o ch a r a cte r is tics e ve n th o ugh th e y ma y r e ve a l la r ge
d iffe r e n ce s in th e ir in te r n a l pr o ce s s e s . Or ga n iza tio n
co n figur a tio n s h a ve be e n wid e ly d is cus s e d in th e lite r a -
tur e (Mile s a n d Sn o w 1978, Mille r 1986, Mille r a n d
Fr ie s e n 1984). T h e y a r e r e co gn iza ble pa tte r n s o f s tr uc-
tur e s a n d pr o ce s s e s . With in th e co n figur a tio n , h o w-
e ve r , a h igh co mple xity e xis ts a n d pr e d icta bility is lo w.
Ne ve r th e le s s , th e y co n s titute a n "e n ve lo pe " to fe a s ible
be h a vio r . As a co n s e que n ce , th e y co n tr ibute to clo s in g
a co mple x s y s te m. T h is le a d s to th e fo ur th pr o po s itio n :
PROPOSIT ION 4. Vh "e n in a ch a o tic s ta te , o r ga n iza -
tio n s a r e "a ttr a cte d " to a n id e n tifia ble co n figur a tio n .
PROPOSIT ION 4a . Wh e n in a ch a o tic s ta te , o r ga n iza -
tio n s a r e mo r e like ly to a d o pt a s pe cific co n figur a tio n
th a n a d e te r min is tica lly "r a n d o m" pa tte r n .
PROPOSIT ION 4b. T h e gr e a te r th e o pe n n e s s o f a n
o r ga n iza tio n to its e n vir o n me n t, th e mo r e like ly is th e
"a ttr a ctio n " by th e o r ga n iza tio n to a give n co n figur a -
tio n .
Or ga n iza tio n a l Sca le In va r ia n ce
In s id e th e a ttr a cto r s pa ce , th e s y s te m's be h a vio r is
h igh ly co mple x a n d un s ta ble . Ho we ve r , we ca n o bs e r ve
th a t th is co mple xity is a ls o o r ga n ize d a n d th a t, ge n e r -
a lly , it r e pr o d uce s a t a s ma lle r s ca le wh a t is o bs e r ve d a t
a mo r e glo ba l le ve l. As a co n s e que n ce , s imila r be h a v-
io r s a n d co n figur a tio n s s h o uld , ge n e r a lly , be o bs e r ve d
a t d iffe r e n t s ca le s . T h is is th e s ca le in va r ia n ce pr o pe r ty .
If th e a s s umptio n ma d e o n th e ch a o tic n a tur e o f o r ga -
n iza tio n s is co r r e ct, we s h o uld , ge n e r a lly , o bs e r ve s ca le
in va r ia n ce in th e o r ga n iza tio n a l wo r ld . T h a t is to s a y
th a t, in th e ir ch a o tic d o ma in , o r ga n iza tio n s s h o uld
h a ve a fr a cta l fo r m. Fo r in s ta n ce , we s h o uld o bs e r ve
s e ve r a l la y e r s o f s imila r pa tte r n s a n d co n figur a tio n s a t
th e o r ga n iza tio n a l, a t th e s ubo r ga n iza tio n a l, a t th e
gr o up a n d a t th e in d ivid ua l le ve ls .
Re s e a r ch in o r ga n iza tio n a l le a r n in g a n d co gn itive
pr o ce s s e s ma ke s a s s umptio n s th a t r e s e mble o ur s ca le -
in va r ia n ce pr e mis e . T h is lite r a tur e ge n e r a lly a s s ume s
th a t th e r e is a s imila r ity be twe e n pr o ce s s e s ta kin g
pla ce a t th e o r ga n iza tio n a l a n d th e in d ivid ua l le ve ls .
Fo r e xa mple , in h is r e vie w e s s a y , C o h e n (1991) s h o ws
e me r gin g co n ve r ge n ce s be twe e n r e s ults o f r e s e a r ch
ma d e o n in d ivid ua l a n d o r ga n iza tio n a l le a r n in g. T h e
po in t h e r e is n o t to co n fir m th e a s s umptio n s ma d e by
th e s e wo r ks but to r e ly o n th e o r ie s wh ich h a ve implic-
itly a s s ume d s ca le in va r ia n ce o f s o me s o r t in o r ga n iza -
tio n s . Oth e r th e o r ie s , h o we ve r , te n d to go a ga in s t th is
s ca le in va r ia n ce pr o pe r ty . Fo r e xa mple , th e wo r k o f
La wr e n ce a n d Lo r s ch (1967) o n th e s tr uctur a l d iffe r -
e n tia tio n o f o r ga n iza tio n a l s ubun its n e e d e d to a d a pt to
d iffe r e n t e n vir o n me n ts is in co n s is te n t with th e pr e ce d -
in ga r gume n t. If th e s ca le in va r ia n ce pr o pe r ty o f ch a o tic
s y s te ms , ge n e r a lly , h o ld s fo r n a tur a l ch a o tic s y s te ms , it
s e e ms un like ly to be th e ca s e fo r o r ga n iza tio n s . Eve n
th o ugh th e r e a r e o ppo s ite a r gume n ts fo r th e e xis te n ce
o f s ca le in va r ia n ce in o r ga n iza tio n s , we n e ve r th e le s s
s ugge s t a fifth pr o po s itio n , co n s is te n t with ch a o s th e -
o r y , wh ich a s s e r ts th a t s uch a pr o pe r ty d o e s e xis t.
PROPOSIT ION 5. Wh e n in a ch a o tic s ta te , o r ga n iza -
tio n s , ge n e r a lly , h a ve a fr a cta l fo r m.
PROPOSIT ION 5a . Wh e n in a ch a o tic s ta te , s imila r
s tr uctur e pa tte r n s a r e fo un d a t th e o r ga n iza tio n a l, un it,
gr o up a n d in d ivid ua l le ve ls .
PROPOSIT ION 5b. Hh e n in a ch a o tic s ta te , s imila r
pr o ce s s pa tte r n s a r e fo un d a t th e o r ga n iza tio n a l, un it,
gr o up a n d in d ivid ua l le ve ls .
Actio n s ' Ir r e ve r s ibility
T h e la s t pr o po s itio n d e a ls with th e ir r e ve r s ibility o f
ch a o tic s y s te ms . In th e o r y , a s y s te m ca n e n co un te r th e
s a me s itua tio n s e ve r a l time s . Ho we ve r , th e pr o ba bility
o f s e e in g s uch a r e cur r e n ce is s o lo w th a t we ca n
co n s id e r th a t a ch a o tic s y s te m will n e ve r fin d its e lf
twice in th e s a me s itua tio n . C o n s e que n tly , in a n o r ga -
n iza tio n , it is un like ly th a t th e s a me a ctio n , ta ke n
twice , will le a d to th e s a me r e s ult. As a n e xa mple a n d
ba s e d o n h is th o r o ugh s tud y o n h o w s ucce s s ful o r ga n i-
za tio n s fa il, Mille r (1990) s h o ws th a t th e ve r y a ctio n s
wh ich o n ce pr o d uce d e xce lle n t r e s ults migh t le a d o n e
d a y to fa ilur e . No t o n ly a r e th e r e s ults un pr e d icta ble
but, e ve n in th e ca s e wh e r e a ctio n s a r e ba s e d o n
s imila r pa s t e xpe r ie n ce s , r e s ults a r e d iffe r e n t. T h is
a r gume n t give s s uppo r t to Ny s tr o m a n d Sta r buck
(1984), wh o a d vis e o r ga n iza tio n s to "un le a r n " in o r d e r
to a vo id fa llin g in to th e tr a p o f r o utin e wh e n n e w
r e s po n s e s a r e r e quir e d to co n fr o n t o r ga n iza tio n a l
cr is e s .
In th e s a me ve in , s in ce th e n umbe r o f o r ga n iza tio n s
is limite d a n d much s ma lle r th a n th e n umbe r o f po s s i-
ble s itua tio n s a n d o utco me s , it is ve r y un like ly th a t two
s imila r s itua tio n s a cr o s s o r ga n iza tio n s will e ve r be o b-
s e r ve d . As a co n s e que n ce , n o ca us e in o n e o r ga n iza tio n
ca n h a ve a s a me e ffe ct in a n o th e r o r ga n iza tio n . T h is
ch a lle n ge s ma n y a ppr o a ch e s ba s e d o n wh a t th e be s t
o r ga n iza tio n s a r e d o in g. T o r e ly o n s ucce s s ful pr a ctice s
a s a ba s is to ma n a ge in a d iffe r e n t co n te xt ca n o n ly
le a d to d e ce ptio n . A s ixth pr o po s itio n fo llo ws :
PROPOSIT ION 6. Simila r a ctio n s ta ke n by o r ga n iza -
tio n s in a ch a o tic s ta te will n e ve r le a d to th e s a me r e s ult.
PROPOSIT ION 6a . Wh e n in a ch a o tic s ta te , two id e n ti-
ca l a ctio n s ta ke n by a s a me o r ga n iza tio n a lwa y s le a d to
two d iffe r e n tr e s ults .
PROPOSIT ION 6b. Wh e n in a ch a o tic s ta te , th e s a me
a ctio n ta ke n by two o r ga n iza tio n s n e ve r le a d s to th e
s a me r e s ult.
T h e s ix s e ts o f pr o po s itio n s a bo ve a r e d e r ive d d i-
r e ctly fr o m th e qua lita tive pr o pe r tie s o f ch a o s th e o r y .
Wh e n po s s ible , th e pr o po s itio n s we r e r e la te d to r e -
s e a r ch in th e fie ld o f o r ga n iza tio n . We a r e a wa r e th a t
ORGANIZAT ION SC IENC E / Vo l. 6, No . 1, Ja n ua r y -Fe br ua r y 1995 27
s o me o f th e wo r k, put fo r wa r d a s a s uppo r t to th e
pr o po s itio n s , is mo r e s ugge s tive a n d d o e s n o t co n s ti-
tute un d e n ia ble pr o o f. Empir ica l r e s e a r ch n o w n e e d s
to be d o n e in o r d e r to e xplo r e in d e ta il th e implica -
tio n s o f wh a t h a s be e n pr o po s e d .
C o n clud in gC o mme n ts
C h a o tic o r ga n iza tio n s a r e d r ive n by co un te r a ctin g
fo r ce s o f ch a n ge a n d s ta bility . T h e s e fo r ce s co n ta in th e
s e e d s o f o r d e r a n d ch a o s . On o n e h a n d , fo r ce s o f
ch a n ge a r e d e s ta bilizin g be ca us e o f th e ir te n d e n cy to
pus h th e s y s te m o ut o f its "o r bit." Expe r ime n ta tio n ,
in co h e r e n ce , d ive r s e a n d d ive r gin ga ctivitie s fr o m th e
o r ga n iza tio n th r us t a r e a ll s o ur ce s o f in s ta bility . T h e y
cr e a te d e ma n d s wh ich a r e n o t n e ce s s a r ily co n s is te n t
with th e pla n n e d o bje ctive s . T h e y a r e s o ur ce s o f in te r -
n a l d is o r d e r wh ich migh t le a d to ma jo r ch a n ge s in th e
futur e . Ho we ve r , th e fo r ce s o f ch a n ge fa vo r , pa r a d o xi-
ca lly , th e e me r ge n ce o f a n e w fo r m o f o r d e r a n d
s ta bility . T h e y ca n be co me a n o r ga n izin g d e vice a n d
cr e a te th e co n d itio n s fo r a n e w o r d e r to co me . Dis o r -
d e r give s a n o ppo r tun ity to e xplo r e n e w wa y s o f d o in g
a n d a ctin g. As a co n s e que n ce , it migh t fa cilita te a d a p-
ta tio n to th e un kn o wn d e ma n d s o f th e e n vir o n me n t.
Sin ce th e e vo lutio n o f th e e n vir o n me n t is un pr e -
d icta ble , in te r n a l d is o r d e r , by ge n e r a tin g multiple r e -
s po n s e s , pr o vid e s a me a n s to e xplo r e d ive r s e mo d e s o f
o pe r a tio n . An d o n e o r s e ve r a l mo d e s ca n be co me th e
n e w o r ga n iza tio n a l e quilibr ium wh o s e ch a r a cte r is tics
a r e impo s s ible to a n ticipa te . Smith (1986), fo r in s ta n ce ,
r e fe r r in g to th e wo r ks o f vo n Be r ta la n ffy (1975) a n d
th o s e o f Ja n ts ch (1980), in s is ts upo n th e n e ce s s a r y
e xpe r ime n ta tio n th a t o r ga n iza tio n s mus t un d e r ta ke if
th e y wa n t to s ur vive . Expe r ime n ta tio n with n e w o r ga n i-
za tio n a l pa r a d igms pe r mits th e d e ve lo pme n t o f ca ta -
lo gue s o f co n figur a tio n s fr o m wh ich th e o r ga n iza tio n
will be a ble to ch o o s e wh e n th e fo r ce s o f ch a n ge a r e
mo r e po we r ful th a n o r ga n iza tio n a l vis co s ity a n d r e s is -
ta n ce .
On th e o th e r h a n d , fo r ce s o f o r d e r a n d s ta bility a r e
us e d to clo s e a s y s te m wh ich is to o co mple x to be
ma s te r e d by co gn itive ly limite d o r ga n iza tio n a l a cto r s .
Se a r ch fo r o r d e r is a n a tte mpt to build is la n d s o f
ce r ta in ty a n d r a tio n a lity wh e r e pur po s e ful a ctio n ca n
be un d e r ta ke n . Fur th e r mo r e , o r d e r is a me a n s to cr e -
a te th e illus io n o f ma n a ge me n t. T h is illus io n is fo r ge d
by o r ga n iza tio n a l a cto r s wh o a r e co n fr o n te d with th e
impo s s ible ch a lle n ge o f a ch ie vin g a mis s io n with o ut
h a vin gth e ca pa city to s ucce e d . Ho we ve r , o r d e r is a ls o
a n un s e ttlin gfo r ce . Or d e r ca n le a d th e o r ga n iza tio n to
a ct in co h e r e n tly with r e s pe ct to th e co n s tr a in ts it is
s ubje ct to . It cr e a te s r e s is ta n ce to ch a n ge a n d le a ve s
th e o r ga n iza tio n in a n a r tificia l limbo . Als o , th r o ugh
multiple co uplin g, th e fo r ce s o f o r d e r ma y cr e a te a
h igh le ve l o f co mple xity a n d ma y be a s o ur ce o f ch a o s .
T h e co mbin a tio n o f th e fo r ce s o f s ta bility a n d ch a n ge
ca n pus h th e o r ga n iza tio n s to wa r d s ch a o tic d o ma in s
wh e r e d e te r min is tica lly in d uce d r a n d o m be h a vio r is
th e r ule . Fur th e r mo r e , be ca us e o f th e d is s ipa tive n a -
tur e o f o pe n s y s te ms s uch a s o r ga n iza tio n s , ch a o s h a s
a n un d e r ly in go r d e r : th e s tr a n ge a ttr a cto r o r th e o r ga -
n iza tio n a l co n figur a tio n . As a co n s e que n ce ch a o s co n -
ta in s th e s e e d s o f n e w s ta bilitie s . It is a n o r ga n izin g
fo r ce . T h us , o r ga n iza tio n s fa ce two co n tr a d ictio n s : fir s t,
le t ch a o s d e ve lo p be ca us e it is th e o n ly wa y to fin d n e w
fo r ms o f o r d e r . Se co n d , lo o k fo r o r d e r , but n o t to o
much , be ca us e it ma y be a s o ur ce o f ch a o s .
Re s e a r ch e r s a n d ma n a ge r s a r e co n fr o n te d with a
ma jo r ch a lle n ge th a t th e in co mple te n e s s o f tr a d itio n a l
mo d e ls ca n n o t h e lp to me e t. T h e in co mple te n e s s is n o t
to o bo th e r s o me if mo d e ls a r e limite d to d e s cr iptio n
a n d in te r pr e ta tio n with o ut a tte mptin gto pr e s cr ibe a n d
pr e d ict. Pr e s cr iptio n a n d pr e d ictio n imply pe r fe ct
kn o wle d ge o f th e in te r r e la tio n s h ips be twe e n va r ia ble s
a n d th e ir d y n a mics o ve r time th a t we d o n o t h a ve .
Glo ba l r e a lity , fr o m th e in d ivid ua l to s o cie ty a s a
wh o le , is impo s s ible to gr a s p. T h e co n s e que n ce o f
r e ly in go n s ubmo d e ls is th a t wh a t we o bs e r ve ma y be
a ppa r e n t r a n d o mn e s s .
C h a o s th e o r y , wh ich is ge n e r a lly we ll e xplo r e d in th e
n a tur a l s cie n ce s , n e e d s to be fur th e r r e s e a r ch e d in th e
r e a lm o f s o cia l s cie n ce s . Alr e a d y , th e qua lita tive pr o p-
e r tie s o f ch a o s th e o r y h a ve pr o vid e d s e ve r a l in te r e s tin g
in s igh ts o n h o w o r ga n iza tio n s migh two r k. Amo n gth e s e
fe a tur e s , s e ve r a l s e e m wo r th e xplo r in g. Fo r in s ta n ce ,
s uch fe a tur e s a s pr e d ictio n impo s s ibility (s e n s itivity to
in itia l co n d itio n s ), n o n r e plica bility o f pa s t s itua tio n s
(time ir r e ve r s ibility ), a ttr a ctio n to wa r d co n figur a tio n s
(s tr a n ge a ttr a cto r s ), in va r ia n ce a t d iffe r e n t o r ga n iza -
tio n a l s ca le s (fr a cta l fo r ms ), a n d s te pwis e ch a n ge pr o -
ce s s e s (bifur ca tio n ) give a co mple me n ta r y th e o r e tica l
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Chaos Theory and Organization

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Chaos Theory and Organization

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Chaos Theory and Organization

Author(s): R. A. Thitart and B. Forgues

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