Management and Chaos Theory Complexity T

Asia Pacific Journal of Research in Business Management
Vol. 9, Issue 3, March 2018 Impact Factor: 5.16, ISSN: (2229-4104)

www.skirec.org Email Id: skirec.org@gmail.com
MANAGEMENT AND CHAOS THEORY, COMPLEXITY THEORY, AND SELF-ORGANIZING SYSTEMS

THEORY
Papa MBENGUE, James ONDRACEK, M. SAEED, & Andy BERTSCH

Minot State University, North Dakota, USA
ABSTRACT
The paper addresses chaos theory, complexity theory, and self-organizing systems theory and their
application to management. All three theories are extensions of general systems theory and should
provide useful guidance for management research efforts. However, this is not the case as chaos
theory, complexity theory, and self-organizing systems theory are clearly at Kuhn's (1962) pre-
science stage of paradigmatic development. Examples of managerial applications of chaos theory,
complexity theory, and self-organizing systems theory suggest they are better suited to guide the
efforts of practitioners rather than to inform a research agenda.
KEY WORDS: chaos theory, complexity theory, self-organizing systems theory, Kuhn cycle,
management
1. INTRODUCTION: CHAOS THEORY, COMPLEXITY THEORY, AND SELF-ORGANIZING SYSTEMS

THEORY AND MANAGEMENT
The discipline of management experienced a very productive period following the application of
general systems theory to managerial issues in the 1960s and 1970s and even into current times
(Senge, 2006). However, general systems theory in relation to management has run its course (Kuhn,
1962). Chaos theory, complexity theory, and self-organizing systems theory promise new means to
model, explain, and predict management phenomena. Are these theories mature enough to provide
guidance for management researchers? The following paper suggests they are not.
2. KUHN CYCLE
The Structure of Scientific Revolutions (Kuhn, 1962) provides insights to understand how
explanations of phenomena change through time as Kuhn concluded that scientific developments
occur in phases. Kuhn's phases today are referred to as the Kuhn Cycle. The first phase is the pre-
science stage. In the pre-science stage, there is not a mature enough understanding of the
phenomena to guide solutions for the field's problems. The pre-science model may be close and it
may have adherents but is not yet a real science that works. The second phase is one in which the
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community converges about and shares a common understanding of how the phenomena operate
and how its problems can be addressed. This common understanding is called a paradigm. During
this shared understanding phase, what Kuhn (1962) called normal science occurs. The paradigm
provides direction for research efforts. During this time, researchers work to fill in the gaps in
understanding using the paradigm as a guide. However, as the weight of research builds, anomalies
and problems that cannot be explained by the paradigm accumulate. At this point, the discipline
enters a period of crisis and some begin to question the validity of the paradigm. The crisis is
resolved in a revolutionary phase in which the old paradigm is replaced by a new paradigm that
better explains reality. With the improved power of the new paradigm's ability to reflect reality, a
new period of normal science begins. However, as anomalies accumulate, the field enters into a
period that is ripe for a new and better paradigm.
Chaos theory, complexity theory, and self-organizing systems theory represent new ways to
understand management. However, these theories are not fully articulated theories in terms of
management as they are applied to describe what happens in complex organizations rather than to
answer the how and why question essential for theoretical knowledge building (Bacharach, 1989). In
the terms of the Kuhn cycle (1962) chaos theory, complexity theory, and self-organizing systems
theory in relation to management reside at the pre-science stage rather than the paradigm stage.
Nonetheless, chaos theory, complexity theory, and self-organizing systems theory provide insights
into nonlinear behaviors evident in complex systems such as those of management situations.
3. CHAOS THEORY
Chaos theory describes systems' behaviors that are highly dependent on initial conditions of the
systems, and are difficult to predict in time (Raisio & Lundström 2015). Chaos theory was previously
characterized as describing unpredictability, instability, and unruly randomness, but scientific studies
have demonstrated that chaos has technically speaking its own ‘built-in’ constraints that determine
dynamically and naturally what can happen to any organizational system (Goldstein 2015). Raisio
and Lundström (2015) stated that chaos theory has been applied in many scientific and engineering
fields such as astrophysics, computer science, aerodynamics, chemistry, biology, and economics.
In 1970, the French mathematician Henri Poincaré made the first contributions to chaos theory, but
Edward Lorenz, an American meteorologist has been recognized as the pioneer of the theory with
his famous assertion of the ‘butterfly effect.’ According to Raisio and Lundström (2015), the butterfly
effect describes in metaphoric terms how the flapping of a butterfly's wings on one side of the globe
provokes a hurricane on the other, translating to how small events in non-linear dynamic systems
can have considerable trajectory changing consequences (Raisio & Lundström 2015).
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Thus, chaos theory is most known for ‘sensitivity to initial conditions,’ where attractors and
bifurcation (the point or area at which something divides into two branches or parts) diagrams
demonstrate the sensitive dependence of the evolution of a chaotic system on initial conditions
(Raisio & Lundström 2015). Goldstein (2015) further demonstrated chaos theory with the
interpretation of constants as universal constraints on what is possible not only mathematically but
also in relation to the phenomena that mathematics represent or model. To demonstrate how
constants define the law of nature, Professor Goldstein gave the example of a circle, which no
matter its size, always obeys the law of Pi (π) equals to 3.14159… and is the ratio of its circumference
to its diameter; if this is not the case then the object is not a circle. In this sense, Pi is a constant that
constrains to define a circle as a circle, which is a round planar figure whose boundary (the
circumference) is composed of points equidistant from a fixed point (the center) (Goldstein 2015).
Professor Goldstein used the law of constants as constraints on natural elements to illustrate the
discovery of Mitchell Feigenbaum, a scientist at the Los Alamos National Laboratory in New Mexico.
Professor Goldstein stated that Feigenbaum discovered new constants that have provided
interesting perspective on dynamical systems, particularly dynamical systems that demonstrate
some sequence of bifurcation period doubling and the beginning of chaos. According to Professor
Goldstein (2015), chaos was defined previously as description of unpredictability, instability, and
unruly randomness, but Feigenbaum's discovery showed that these properties are actually partial
and incomplete. Chaos has technically speaking its own "built-in" constraints that determine what
can happen dynamically and naturally. Professor Goldstein argued that nature does not arrange
things to be first unruly and then suppresses them as natural spontaneous activity with boundaries
and containment fields. Right from the beginning, natural processes are showing chaos or are on
their way to chaos, and are simultaneously bifurcating and being constrained to show order and
organization. Therefore, constants serve to recognize constraints that operate on and through the
inner substance of things, which are what the ancient Greeks called forms or "hyle," which refers to
matter (Goldstein 2015).
Professor Goldstein (2015) demonstrated that Feigenbaum's delta constants' horizontal axis is
composed of points S0, S1, S2... that indicate the parameter values where successive period-
doubling bifurcations take place.
"S0 is the parameter value where the first fixed point attractor becomes unstable and a new, stable
two attractor emerges;
S1 is the parameter value where the period two (2) attractor becomes unstable and a new, stable
period four (4) attractor emerges;
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- S2 is the parameter value where the period four (4) attractor becomes unstable and a new, stable
period eight (8) attractor emerges."
Feigenbaum concluded that the ratio of the successive values of the bifurcation parameter come
near a limit notated as the delta constant where:
δ = limn→∞ an-1 - an-2 an - an-1 = 4.669201609…
Here are discrete values of the bifurcation parameter at each nth period doubling. Again, the
constant shows up as the ratio of the intervals between the bifurcation points as n approaches
infinity. Professor Goldstein argued that Feigenbaum's discovery even though unexpected, was
astounding because mainly these constants had a universality property. For example, it was proven
that the same delta constant value of 4.669…appeared in any dynamical system that moves toward
chaotic behavior by the period doubling route to chaos. It was also discovered that the delta
constant shows-up in more unrelated places such as the trigonometric sine map, fluid-flow
turbulence, electronic oscillators, lasers, chemical reactions, and among others (Goldstein 2015).
Goldstein (2015) concluded that as long as a function is unimodal (i.e., it has one hump) when
graphically represented, and has a period doubling route to chaos, the delta constant will be
present. This implies that the universality that is the micro-level constituent level, which differs
according to which specific function is being examined, is not of primary importance that determines
the significant dynamical behavior since the constant implies an insensitivity to initial conditions
which are just about the opposite of the sensitivity to initial conditions found in chaotic systems,
which demonstrates again the butterfly effect (Goldstein 2015).
4. CHAOS THEORY AND MANAGEMENT APPLICATIONS
Trying to link chaos theory to the sciences of management, Armour (2016) stated that chaos is not
catastrophe. An interesting case about chaos theory linked to management that illustrates this idea
was related about the Bishop of Manchester or the Church of England, Sir David Walker. According
to Raisio and Lundström (2015), in 1970 David Walker was a student at Cambridge University, where
he studied mathematics. As a mathematician, Walker witnessed the development of chaos theory
into an actual academic disciple. Walker was later ordained to the priesthood and became Bishop of
Manchester in 2013. As he moved up into positions of seniority, Bishop Walker began to revisit the
meaning and value of chaos theory. His focus became less oriented on the present practice of his
organization, but much rather on its future. Bishop Walker stated that his understanding of chaos
and complexity has allowed him to approach different processes in his organization with less control
and more freedom. He stated that his role as senior bishop in the Diocese of Manchester is not to
run the system smoothly, but to disturb it and then to help it find a new and different equilibrium,
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before repeating the exercise. Instead of controlling from above Bishop Walker is enabling different
group to find their own ways of working, letting them self-organize and then potentially disturb the
whole organization culture. Bishop Walker admitted then to operate at the edge of chaos, or
between order and chaos where nonlinearity and sensitivity to initial conditions are explicit and
provide the right amount of both structure and looseness to the system. When finally a new order
has been decided upon, Bishop Walker makes sure that it is truly implemented. He understands that
stability is not a normal state of the system while emphasizing that the implementation execution is
very important step as it helps to avoid a situation where one never reaches a conclusion.
Raisio and Lundström (2015) concluded that Bishop Walker clearly has the characteristics of a chaos
pilot, a person who navigates within self-organizing dynamics, believing that there is a time for
contemplating and facilitating different choices and a time for spontaneous self-organization and
emergence. Being a chaos pilot is then to know when to allow the flapping of the butterfly's wings to
determine events and when to influence matters by one's own actions. Bishop Walker embraces
complexity and assumes that he does not know what the end result will be, but affirms that the
important thing is that the process is very likely to lead to a good state. Raisio and Lundström (2015)
concluded that embracing uncertainty and encouraging novelty can truly catalyze and enhance the
creation of new order.
5. COMPLEXITY THEORY
Koopmans (2016) defined complexity theory as a multidisciplinary theoretical framework that tends
to describe the behavior of systems that, depending on the discipline of inquiry, could be biological,
social, economic, or anything else that is systemic, which means relating to, or common to a system.
Koopmans (2016) argued that someone must understand complexity theory in terms of the
interaction between components (cells, individuals, departments, work units, etc.) of a system, as
well as in terms of the system as a whole (tissue, the human body, institutional or social
organizations), and that the interaction between the components does not necessarily follow a
predictable course.
Raisio and Lundström (2015) explained that the Newtonian worldview emphasized that the presence
of a universe clockwork mechanism had long been the determining paradigm in the science and
practice of leadership, and management. This presented a mechanistic worldview that considered
the world as a ‘really big machine’ that could be taken apart, and by studying the parts, the whole
thing could be understood. However, complexity has challenged the Newtonian view and asserted
that the world is a dynamic and open system that exhibits self-organizing emergent behavior, just
like a living entity (Raisio & Lundström 2015).
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According to Koopmans (2016), complexity theory provides a mixed methods approach to

demonstrate how systems work relative to diverse phenomena by bringing different perspectives on
existing scholarly problems, included the wicked ones (Koopmans 2016). Wicked problems are
difficult to define or analyze because they are presented differently by different stakeholders, and at
best are resolved rather than solved (Beckmann, 2017). Camillus (2008) stated that a wicked
problem, such as environmental degradation, poverty, and terrorism involves many stakeholders
with different values and priorities; the issue's roots are complex and tangled; the problem is
difficult to come to grips with and changes with every attempt to address it, and its challenges have
no precedent (Camillus, 2008). To address the equation of wicked problems, Kennedy (2017) argued
that wicked problems' system structure revolves around identifying the individuals, the groups, or
the entities that compose the system involved in the wicked problem, and then determining which
social mechanisms most clearly drive each entity and which outcomes motivate these social
mechanisms, before determining what role the entities plays as either incumbent, challenger or
governance and which social narratives drive each role's participation in the wicked problem
(Kennedy 2017).
Again, complexity theory is inherently adapted to address systemic complex problems or
phenomena such as wicked problems and to demonstrate the interplay of factors that operate at
the individual (single element), relationship, community, and societal levels (Koopmans 2016).
Koopmans further stated that complexity theory provides a framework that studies this interplay by
distinguishing the behavior of individuals from that of the larger systems of which they belong.
Koopmans asserted that W. Ross Ashby, a pioneer in Cybernetics (the science of communications
and automatic control systems such as the nervous system and brain and mechanical-electrical
communication systems) demonstrated that whenever individuals interact, they form a system
within a larger system, and create a dynamical interplay between their behavior and the behavior of
the system of which they are constituent parts. The interactive behavior of individuals shapes the
system, while the system, in turn, describes disproportionally the behavior of the individuals within
it. In other words, the whole system is greater than the sum of its parts. Complexity theory analyzes
the multiple layers of the system with separate scrutiny, but also with a methodological framework
that allows describing the interplay between these different layers, that is, feedback loops.
Koopmans (2016) concluded that the need to define such systems has created complexity theory,
which collects and analyzes data at different levels of granularity (individuals, groups, societies) and
becomes, therefore, a resourceful discipline for mixed methods research.
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6. COMPLEXITY THEORY AND MANAGEMENT APPLICATIONS

Raisio and Lundström (2015) argued that it is not an easy task to embrace complexity because the
rigidity of the organization's systemic structure does not often allow its members to think
differently. In many modern organizations, the dominant theory is still the ideas of the scientific
revolution and Newtonian physics. Raisio and Lundström (2015) explained that when people do not
know something, it is thought to be so just because they do not have enough information yet, and
they are reluctant to accept that the presence of complexity makes a precise understanding
impossible. Raisio and Lundström (2015) further explained that organizations also are facing a
problem of predominant hierarchies, which create a strong culture of thinking hierarchically,
whereas the problems are mostly horizontal in nature. There is not one way to manage because
different problems and different environments call for different approaches with the understanding
that there is naturally a high degree of connectivity and interdependence between the different
actors and dimensions of a system and also between the system and its environment, which gives
rise to complex behaviors. It is important that people accept that they are actually part of the
problem, because of the way they act. For example, even though solving wicked problems
throughout adequate collaborative processes is a slow process, it might actually be quicker than
approaching the issue through traditional authoritative procedures. Raisio and Lundström (2015)
concluded that often people have to fail in pursuing authoritative or competitive strategies before
finally turning to collaboration (Raisio & Lundström 2015).
According to Albert, Kreutzer, and Lechner (2015), strategic management research has long been
studying variables that help explain organizational failure and success in a changing environment.
The conception of an organization's strategy as a set of interdependent choices in regarding the
different activities to engage in and how to configure them is a promising attempt to explain the
phenomenon. This concept explicitly links, for example, the production of services and products or
training employees to the design and execution of interdependent activities that can be configured
in a variety of ways. The authors stated that scholars have argued that interdependencies foster the
exchange of resources and information among activities, which can lead to self-amplifying feedback
that enables exploration. Defined as a set of interdependent activities that interact in non-trivial
ways, difficult to predict, the firm becomes a complex system that could benefit from the
perspective of complexity theory (Albert et al. 2015).
Measuring project management complexity and uncertainty, De Souza Pinto, Novaski, Anholon, and
Carpim Besteiro, (2014) stated that a predictable, fixed, relatively simple and conventional model
project management is no longer associated with the actual business environment, because of the
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aspects of complexity and uncertainty. The authors argued that business environment has become
much more complex and unstable than in the past, which in turn makes the professionals in the
project management field strive to better understand processes and effective management of
activities that are related to a given project, which comprises its planning up to the control of its
results. Projects should be managed considering various factors, influences, resources, and external
and internal variables related to their context, which somehow influence their degree of complexity
and uncertainty over their life cycles. Project management increasingly displays qualitative attributes
that are difficult to measure, even though their presence significantly influences the performance
and degree of success of a given project. The authors determined 44 variables from team size,
critical mission, team efficiency, the number of systems, required skills,… to integration and
implementation quality of the product development process (PDP) that must be taken into
consideration in the decision-making process of project management (De Souza Pinto et al. 2014).
7. SELF-ORGANIZING SYSTEMS THEORY
Self-organizing systems (SOS) refers to the ability of certain systems to change their internal
structure and/or function in response to external circumstances (Banzhaf, 2009). Wolfgang argued
that the elements of self-organizing systems are able to manipulate or organize other elements of
the same system in a way that stabilizes either the structure or the function of the entire system
against external fluctuations. This process of self-organization, initiated by the system itself, is often
achieved by growing its internal space-time complexity, which results in layered or hierarchical
structures or behaviors, and is therefore called self-organized. Self-organization is a core concept in
Systems Sciences (Banzhaf, 2009). Systems Sciences are defined as an interdisciplinary field of
science that studies the nature of complex systems in nature, society, and science, for the goal of
developing interdisciplinary foundations that are applicable in a variety of areas including
engineering, biology, medicine, and social sciences (yourdictionary.com, n.d.).
Wollmann and Steiner (2017) talked about Complex Adaptive Systems (CAS) in their contextual self-
organizing capabilities because of their intrinsic dynamic nature of complex systems, which requires
them to have capacity to adapt and to survive external influences. They argued that CAS are systems
made of components (elements or agents) that interact with one another according to a set of rules.
The evolution of the system is the result of interactions between the elements, where each element
acts in response to the behavior of another element in the system, which translates to the system’s
own dynamic. The behavior of each element influences and is influenced by the behavior of the
system as a whole. The authors further argued that CAS learn and evolve, using and adaptive
approach that is fundamental to their survival, processing information, and constructing schema,
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based on what they have experienced. Wollman and Steiner (2017) demonstrated, using a model of
the New England Complex Systems Institute (NECSI), that when self-organizing system internal
elements (called Environmental Surveillance System) detect external variables from the external
environment of the system, they act as sensors open to external influences or stimuli that allow
them to develop internal processes of reorganization based on the system rules with a feedback
circuit that provides continuous learning and adaptation to external change and internal
reorganization.
Banzhaf (2009) stated that self-organization theory started with the foundation of Cybernetics in the
1940s when W. Ross Ashby, H. Von Foerster, and N. Wiener described an early understanding of the
theory. Self-organizing systems theory was later used in physics and now it is mostly adapted to
natural sciences. Banzhaf (2009) argued even though that many systems have been identified as
possessing characteristics of self-organization, a clear definition is still lacking. While the concept has
found applications in the social sciences and in engineering, self-organizing systems theory is still in
its beginning stage. In the 1950s, a self-organized system was defined to be a system that changes its
basic structure as a function of its experience and environment. In 1954, the term self-organizing
system was used to describe learning and adaptation mechanisms, and 1960, Von Foerster described
it as dynamical systems that possessed some stable structures that he called eigenvalues, or
eigenbehaviors, or attractors states. Nowadays, Self-organizing systems theory has become a center
stage in natural sciences and social sciences, and engineering is beginning to see the utility of the
concept in relation to nanoscale applications and the developing complexity of human artifacts
(Banzhaf 2009).
According to Banzhaf (2009), examples of natural self-organizing systems from the non-living world
are the formation of Benard convection cells in non-equilibrium thermodynamics, the generation of
laser light in non-linear optics, and the Belousov-Zhabotinsky reaction in chemistry. These are self-
organizing systems with restricted macroscopic space-time patterns complexity. Unrestricted
complexity throughout self-organization is achieved in the living world. Banzhaf gave us the example
of the self-organization of the Earth's biosphere known as the "Gaia" hypothesis, which states that
Earth's living and non-living components self-organize into a single entity called "Gaia", the whole of
the biosphere that is able to self-stabilize and self-regulate itself in order to make conditions on the
planet habitable for life. There is a sort of homeostasis that is being created by the self-organizing
geophysical and physiological system of Earth. Banzhaf further argued that the Gaia hypothesis has
found its place in Earth Systems Science as the realization that there is just one global ecosystem
that contains the entirety of resources and where all living organisms interact with each other in
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multiple regulatory cycles. This idea of a global ecosystem is connected to the Darwinian theory of
evolution via natural selection, which provides a mechanism by which such a stable state can be
assumed to have emerged (Banzhaf 2009).
Banzhaf (2009) gave us also other examples of self-organizing systems that are man-made systems,
which exhibit self-organization phenomena, such as traffic patterns, self-organizing neural networks,
cellular phone networks, and the development of web communities. For example, it has been
observed that traffic flow patterns on highways appear to be closely related to traffic density and
the drivers' behaviors. Traffic flow is an open system that develops waves of traffic jams that are
influenced by the density of traffic. The transitions between different traffic flow patterns have been
considered as phase transitions, typical products of self-organization in the non-living world (Banzhaf
2009).
According to Banzhaf (2009), important concepts of self-organizing systems theory are:
- Non-equilibrium thermodynamics focus on the notion of order and disorder and explain how order
can arise through self-organization.
- Synergetics describe transitions phases and patterns formation in systems where unstable modes
dominate the stable modes and determine the development of the systems' dynamics.
- Chaos systems relate to non-linear low-dimensional systems that are unpredictable, despite being
deterministic. Chaos theory explains the possibility of certain systems to be sensitive to initial
conditions, with difficulty to predict their behavior because of the fact that initially infinitesimal
differences in trajectories can be amplified by non-linear interactions in the system.
- Complex systems describe high-dimensional systems that have many degrees of freedom and
interact in complicated ways.
- Self-organized criticality (SOC) occurs when large dissipative systems drive themselves to a critical
state with a wide range of length and timescales. SOC explains the power-low distributions that are
being observed in natural, social, and technical systems, like earthquakes, forest, fires, evolutionary
extinction events, and wars.
- The hypercycle concept explains certain aspects of the origin of life and in particular chemical
reaction systems responsible for the origin, self-organization and evolution of life.
- The origin of order concept explains the tendency of nature to constrain developments along
certain paths due to restrictions in the type of interaction and the constraints of limited resources
available to evolution.
- The emergence and top-down causation: emergence is a pattern formation process that is strongly
related to self-organization, and explains the appearance of new qualitative features on the level of
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an entire system that could not be observed at the level of its components, while top-down
causation explains how the structures forming on the higher level of the system are able to affect
the lower system components and influence them in a way that stabilizes the newly emergent
behavior.
Banzhaf (2009) further stated that self-organizing systems are dynamic, often non-deterministic, and
open. They exist far from equilibrium and sometimes employ autocatalytic amplification of
fluctuations. Often, they are characterized by multiple time-scales of their internal and/or external
interactions, they possess a hierarchy of structural and/or functional levels and they are able to
react to external input in a variety of ways. Many self-organizing systems are non-teleological, which
means that they do not have a specific purpose except their own existence. As a consequence, self-
maintenance is an important function of many self-organizing systems. Most of these systems are
complex and use redundancy to achieve resilience against external perturbation tendencies.
8. SELF-ORGANIZING SYSTEMS THEORY AND MANAGEMENT APPLICATIONS
For many years now, there has not been one coherent and common theory for self-organizing
systems. Different approaches have been used to explain the natural composition of self-organizing
systems. In the management field, researchers have examined self-organizing systems. The
questions of why do they form, how do they structure themselves, how would one build self-
organizing systems such that they do something useful, and how could they be controlled have been
asked. According to Williams (2017), scholars from a wide range of disciplines and perspectives have
tried to unravel the high complexity of sustainability. Williams (2017) argued that a mature
understanding of sustainability management requires studies to adopt a multidisciplinary systemic
lens that is capable of appreciating the interconnectivity of economic, political, social and ecological
issues across temporal and spatial dimensions. Williams (2017) described the core theoretical
concepts of systems thinking as interconnections, feedbacks, adaptive capacity, emergence and self-
organization that include behavioral change, leadership, innovation, industrial ecology, social-
ecological systems, transitions management, paradigm shifts and sustainability education.
Uhl-Bien and Arena (2017) described complexity leadership as enabling people and organizations for
adaptability. Uhl-Bien and Arena (2017) reported in 2010 IBM's CEO, Sam Palmisano describing the
rising rate of complexity associated with increasing volatility, uncertainty, and interconnectedness as
the biggest challenge that organizational leaders are facing. Palmisano mentioned that incremental
changes are no longer sufficient because events, threats, and opportunities are not just coming to
organizations faster or with less predictability, but they are also converging and influencing each
other to create entirely unique situations. These contexts require adaptability and new ways of
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leading. Uhl-Bien and Arena (2017) further argued that organizations and entire industries are being
affected by with increasing connectivity allowing everyday people to network and drive large-scale
political, social and market disruption. Some leaders are finding these situations exciting times and
the opportunities to lead change have never been greater. For others, the lack of clarity and speed
at which complexity is increasing feels overwhelming and chaotic with a growing sense of dismay
about what the future holds and the inability to control it.
Uhl-Bien and Arena (2017) stated that the key to overcoming this dismay is to provide a new way of
understanding what it takes to lead in a complex world. Leaders must leverage what is known about
managing organizations for efficiency and results while incorporating new knowledge about how to
lead for adaptability. They must look to the theory of complex adaptive systems in complexity, which
will allow considering how the principles of organizing emanating from the physical and biological
sciences can inform the understanding of adaptability in organizational environments (Uhl-Bien and
Arena 2017).
Wollmann and Steiner (2017) wrote that any company operating in a competitive environment that
desires to become a benchmark in the business world needs a managerial model that enables the
development of systemic thinking on the part of its executives. The authors stated that current
information and knowledge age coexists with emerging models, such as systems thinking and
nonlinearity. They defined systems thinking as a philosophy or a way of producing, interpreting, and
using knowledge. It is a method for solving problems and organizing complex sets of concepts and
fragmented views that enable the integration of concepts and specific theories with a view to
interpreting and seeking solutions to complex problems. This has led to changing paradigms in
decision-making processes; especially important in companies when it comes to determining
strategies to achieve long-term goals. Wollmann and Steiner (2017) argued that in environments of
uncertainty, it is increasingly difficult to make strategic decisions because: There are no precedents
to follow; most of the time decisions are not structured; they involve significant resources; they
require a high level of commitment; they affect operational aspects.
Wollmann and Steiner (2017) argued that the decision-making agents are exposed to a set of
internal and external pressures. In the daily life of companies, decision-making agents need to
manage conflicting perceptions and interests, eliminate antagonistic positions and disputes for
resources and information, transforming organizational goals into collective goals, and seek to
satisfy the stakeholders. An effective decision-making process requires an adequate environment to
harmonize the subjectivities, uncertainty, and inaccuracy that are always present in decision-making
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agents. Power relations, when well-managed, can result in the prevention and resolution of conflicts
and ensure that organizational balance and growth are maintained (Wollmann and Steiner 2017).
Wollmann and Steiner (2017) described the Conceptual Scientific Model as companies have a
behavior dynamic because interactions between their parts (functional areas such as marketing,
production, human resources, and finance) promote continuous changes. At the same time, the
parts exchange energy (which materializes in the form of information and resources) with the
environment (political, social, economic, technological, and competitive) in which the company is
embedded. This promotes deliberate internal adaptations of all its parts. In this exchange of energy,
modifications can also occur in parts of this environment, thus showing that companies are dynamic
and dissipative systems.
9. CONCLUSION
In terms of management, chaos theory, complexity theory, and self-organizing systems theory
operate at a pre-paradigm stage. To use the ideas of Kuhn (1962) these theories provide descriptions
of phenomena but are not mature enough to be applied to guide scientific inquiry into management
issues. Nonetheless, chaos theory, complexity theory, and self-organizing systems theory provide
useful descriptions of management phenomena that can effectively guide the efforts of practitioners
to experiment with these theories to find new understandings of management.
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Asia Pacific Journal of Research in Business Management

Vol. 9, Issue 3, March 2018 Impact Factor: 5.16, ISSN: (2229-4104)

MANAGEMENT AND CHAOS THEORY, COMPLEXITY THEORY, AND SELF-ORGANIZING SYSTEMS

Papa MBENGUE, James ONDRACEK, M. SAEED, & Andy BERTSCH

1. INTRODUCTION: CHAOS THEORY, COMPLEXITY THEORY, AND SELF-ORGANIZING SYSTEMS

According to Koopmans (2016), complexity theory provides a mixed methods approach to

6. COMPLEXITY THEORY AND MANAGEMENT APPLICATIONS

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