Chaos Theory and Organization Author(s): R. A. Thiétart 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 Stable URL: . Accessed: 02/10/2013 00:36
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evolution and revolutionin every organization. 1. an apparently random.small changescan have big consequencesthat cannotbe predicted in the long term. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . Nonlinear Dynamic Systems) dissonance between what managers are supposed to do and what they can really achieve.25 Copyright ? 1995. Fourth. It can be much more complex than what simplistic recommendations imply. Fifth. dynamic. several consequences. Thanks to their power of closure. However. and random events come into play in shaping an organization's future. DMSP and Essec. Thietart * B. First. a domain where a chaotic behavior can be observed. a source of disorder.189 on Wed. duringone single organizational life span or between two differentorganizationssimilaractions should never lead to the same result.. also. the managerial artifacts are. the artifacts assist the manager in making decisions and implementation of actions. structuralinvarianceat different scales and irreversibility-are used to establish six propositions. attractionto specific configurations.. The organization is presented as an open. organizationsare likely to exhibit the qualitativeproperties of chaoticsystems. Divergence between forces of stability and instability and the frequent aperiodic coupling of these same forces lay the groundwork for chaos to appear. But. a form of stability.organizationsare potentiallychaotic. (1976). A. In this article. chaos theory and properties of chaotic systems are used to suggest a new approach to understand how organizations work. but deterministically driven behavior-has organizing attributes. Institute for Operations Research and the Management Sciences ORGANIZATION SCIENCE /Vol. Finally. When in a chaotic domain.from chaos. For some. Nystrom et al. Chaos Theory. Third. Forgues Universityof Paris-Dauphine. Researchers such as Fombrun (1986). (Organization Theory.Severalof these properties-sensitivity to initial conditions. Prediction and replicability are seen possible. Instead.discretenessof change. nonlinear system subject to internal and external forces which might be sources of chaos. for those who run organizations.This articlearguesthat these processesare embeddedin organizational characteristics and in the way organizations are managed. These organizing attributes result from the multiple interactions between forces of stability and forces of instability the system is subject to. January-February 1995 19 This content downloaded from 111. also. They tend to stiffen the organization around artificial working rules which prevent a natural adjustment from taking place between the internal and the external dynamic forces the organization is subject to.97.Second. Introduction From books proposing recipes for managerial success to academic research. political games between organizational actors.68. No. When in the chaotic domain. intuition. can be generated by organizational actors who develop multiple and interrelated managerial artifacts. actors create internal disorder.the path fromorganizationalstability to chaosfollowsa discreteprocessof change. This might be taken as an indication of the maturity the field has achieved. 75775 Paris Cedex 16 France Abstract Manyauthorshave stressedthe existenceof continuousprocesses of convergence and divergence. can be drawn. Jauch and Kraft (1986). Quinn and Cameron (1988) and Weick (1977) have already challenged the view of a rational and mechanistic organization. stability and instability. chaos-i. new stabilitiesemerge -the strangeattractors-which are assimilatedto organizational configurations. Instability. management is not always a straightforward endeavor. In the same vein. Forces of instability derive from initiatives organizational actors take.e. However. The purpose of the discussion below is to pinpoint these consequences from the perspective of organization science and to propose a chaos theory-based approach to understanding how organizations work.Chaos Theory and Organization R.becauseof the couplingof counteracting forces. i.when the organization is in the chaotic domain.e. Organizations are presentedas nonlineardynamicsystems subject to forces of stability and forces of instability which push them towardchaos. One purpose of these artifacts is to create the illusion of managing to reduce cognitive 1047-7039/95/0601/0019/$01. Prediction is difficult and replicability. hazardous. similarpatternsshould be found at differentscales. By taking initiatives. based on chaos theory. managerial artifacts can serve the purpose of creating islands of rationality and certainty and. 6. literature in management is still frequently based on an implicit assumption of stability and a quasi-mechanistic view of organization. management has achieved the status of science. as a consequence.

On one hand. Nonlinear dynamic systems have spe- Properties of Nonlinear Dynamic Systems A nonlinear dynamic system is a system where relationships between time-dependent variables are nonlinear. 1. FORGUES Chaos Theoryand Organization Many managerial practices and research findings are neither universal nor time-relevant. The science of chaos provides a new paradigm where two apparently irreconcilable visions of management-rational and quasi-mechanistic on one hand. Interest has been mainly stimulated by these systems capabilities in representing what were perceived. as noise and randomness. A paradigmatic shift is necessary to reconcile apparently divergent approaches to management. a logical step was to see if deterministic chaos. Simplicity and determinism could. the complex. stability. We have to wait for the sixties and especially the seventies to see researchers start focusing on what was left aside before. therefore. the apparent unexplainable. interest in these systems has grown among researchers of different scientific fields such as physics. January-February 1995 This content downloaded from 111. lead to complexity. In this situation.189 on Wed. under certain conditions.. Finally. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . THIETART AND B. Priesmeyer and Baik (1989) on organizational chaotic behavior.97. the "stable-unstable. We can also observe a form of periodic stability (periodic attractor) where the system periodically comes back to its previous state. was present. which dampen the influence of variables. Finally. dubbed strange attractor. A. a small initial change has an unexpected and important impact. chaos is not always observed. we find new interesting situations (Ruelle 1988). This system has three types of equilibrium.R. On the other. Stacey (1992. Natural scientists were the first to turn their attention to the study of chaos. On the other hand. confirmed their assertion that deterministic chaos existed in nature. cific properties that mathematicians have studied for more than a century (Poincare. as discussed by Swinney (1983)." An Overview of Chaos Theory Chaos theory takes its root in the study of nonlinear dynamic systems. there is a sensitive dependence to the initial conditions.68. Apart from the works of Gemmill and Smith (1985). the literature is still rather sparce and does not always provide insights on what we can infer from chaos theory. The behavior is said to be chaotic. the findings are often not durable. On the other hand. Ceteris paribus. when we are in the simultaneous presence of counteracting influences. their external validity is frequently low. Later experimental work. i. which reinforce the original change made in one of its variables. after a change. the system can reach a stable equilibrium or point attractor which is independent of time. an apparent randomness created by deterministic rules. This is the second type of "equilibrium": explosive instability. in the past. when the system is driven by positive feedbacks. They cannot be easily adapted from one organization to the other. Rasmussen and Mosekilde (1988) on chaotic behavior of management systems. Since economic data seem random. i. negative feedbacks which dampen the original change and tend to increase stability. chemistry and economics. No.e. equilibrium. it is difficult to forecast where the system goes but to a complete collapse. Their attention was triggered by the Ruelle and Takens' article on fluid flow turbulence.e. Grandmont (1986) and illustrated in Anderson et al. However. Nonaka (1988) on firms self renewal.. when the system is directed by negative feedbacks. the state of the 20 ORGANIZATION SCIENCE /Vol. positive feedbacks which tend to reinforce the initial change and increase instability. Much of the work done was focusing on regularity. it can be contained within a strange shaped surface. In an explosive instability situation. 1993) on chaos and management. and Zimmerman (1990) on chaos theory and strategic processes.e. Organization science has not yet given full attention to nonlinear dynamics and their properties.. This is the first type of equilibrium: stability. during these last 30 years. Smith (1986) on dissipative structure and social systems transformation. On one hand. First. i.e. i. On one hand. (1988). small changes are accumulating exponentially to lead to an explosive situation. was able to generate behaviors as complex as those observed in nature. Economists soon followed with works in macroeconomics and finance as surveyed by Baumol and Benhabib (1989). What seemed strange and could not be explained with traditional models was largely left aside. the system always comes back to its initial state. predictability. This is not surprising because practices and research findings are based on idiosyncratic or averaged situations which can't be easily found elsewhere. a system behavior which is apparently random even though it is driven by deterministic rules. they are derived from past experiences and conditions which will be rarely the same in the future. Ruelle and Takens (1971) showed that a simple deterministic model. When in a situation of counteracting forces. even in the organizations in which they originate. 1892-1899). Furthermore. we may also find a more complex behavior. unexpected and disorderly on the other hand-can be reconciled.. the behavior can be completely erratic and generate a deterministic noise. 6.

a stock market is "self similar" from the largest to the smallest scales. a last property we would like to discuss is time irreversibility of a chaotic system.R. 62) says "even if reality is deterministic. Especially in the case of dissipative systems-those which dissipate their energy-the chaotic evolution may get organized around structures that we find at different scales. due to the perfect synchronism in time and space between the different variables that this requires. "the complex organization is a set of interdependent parts which together make up a whole in that each contributes something and receives something from the whole. as time. systems seem to be governed by relationships which dynamically interact with one another and are prone to chaotic behavior. a storm. Chaotic behavior is likely when the number of variables. A mathematician. Finally. p. the butterfly wing shaped attractor of Lorenz or the sugar bread shaped attractor of Rossler (see Briggs and Peat.97. economic cycles and stock market evolution. The Organization as a Nonlinear Dynamic System Organizations also are dynamic systems governed by nonlinear relationships. when looking at this complexity we can observe that it is also organized and that it reproduces at a smaller scale what is observed at a more global level. January-February 1995 21 This content downloaded from 111. Ruelle 1991) and to some extent. The apparent random behavior gets "attracted" to a given space and remains within its limits. in economics (Brock and Malliaris 1989). named the strange attractors. to see awareness of this phenomenon growing among the scientific community. then the system long-term evolution is impossible to predict. The sensitivity to initial conditions is not new. Prigogine and Stengers 1984. from stable equilibrium to periodic behavior to chaos takes place when an increasing number of variables with different frequencies are coupled between each other. Once in a state of chaos. for illustration). The multiple interactions between these relationships turn the simplest relationship we can imagine into a highly complex network of which behavior is impossible to anticipate.68. a few months after. it seems that chaos has several layers of ordering properties which are similar at different scales. with diverse agenda. when in a chaotic state is considered. System behavior." Multiple organizational actors. 6) pointed out. As a consequence. This scale invariant property has been well analyzed by Mandelbrot (1982a) in his work on fractals. But. Chaotic systems and their properties have received a considerable amount of attention in the natural sciences (Allen and Sanglier 1978. irreversible. it may well happen that what we observe in this way is unpredictability and randomness. As Thompson (1967. the probability to see a system "reverse" to its initial state is extremely low. any system has to come back one day to its initial state. A. a resulting more complicated behavior is observed. A small cause can have a big effect. However. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . the effect of which multiplies as time passes. the system will probably not find itself again in the same situation in the foreseeable future. but more recently. the simultaneous presence of a minimum number of counteracting forces create an apparent randomness. Artigiani 1987. or bifurcation. As Ekeland (1988. a small initial change. 6. Hadamard (1898). For instance he showed that stock market evolution over several years reflected daily and monthly evolutions. inside and outside ORGANIZATION SCIENCE/Vol. jet engine gas propulsion to demographic evolution. consequences which could not have been predicted beforehand.189 on Wed. In fact. was the first to suggest that if a small error in the initial conditions of a system is made. From tomorrow's weather. It is an exponential instability. A new form of order is found out of chaos. water turbulence. the impact of a variable change can be predicted only for the very short term. This property makes long-term forecasting impossible. can lead to a dramatically different evolution. The attractor creates an implicit order within chaos. it is unlikely that the same conditions will be found again in a reasonable future. p. we have to wait for Lorenz (1963 a." When in a chaotic state. No. For Mandelbrot (1982b). Furthermore. similar to phenomena observed in nature. Consequently. As a consequence. from practical reason. 1. That is to say that small variations in some of the variables might have monumental consequences. FORGUES Chaos Theoryand Organization system-chaotic or stable-depends on the dynamic combination and on the relative strength of the relationships among its various elements. However. Inside the attractor space. THIETART AND B. b) and his famous metaphor of the flap of a butterfly's wing which creates. which in turn is interdependent with some larger environment. In theory. The passage. is equal to or greater than three. 1989. the system behavior is highly complex and unstable. These attractors were first called strange by Ruelle because of their unexpected and strangely regular shape such as the ring-shaped attractor of Henon. Another characteristic of chaotic systems is worth noticing. Feigenbaum (1978) shows that a system passes from a stable to a periodic and from a periodic to a chaotic situation when the strength of the link (the value of a parameter) between variables changes. when the number of variables with different periodicity increases. or chaos.

We also know that structured and unstructured processes (Mintzberg et al. As a result.R. 6. on one hand. evaluated and implemented by a unique leader is mixed with intuition. and in- duced and autonomous approaches (Burgelman 1983). "the cause of the instability and limited duration of formal organizations lies in the forces outside. Tversky et al. p. As a result. formality and order mixed with intuition. the process is not as linear and as smooth as a rational mind might wish. Padgett 1980. Lorange and Vancil (1977). Chaos theory..189 on Wed. With regard to strategy formation processes. In the latter. and impulsive responses. These actors have different frames of reference (Kahneman and Tversky 1984. Relationships between different organizational system elements do not remain the same forever. take advantage of opportunities and miss others. it seems that the qualitative properties of chaos theory have an explanatory and integrative power that organization theories could use 22 ORGANIZATION SCIENCE/Vol. organizations cannot be totally assimilated to natural systems." They stress the indirect origins of the action which is observed. the organization behavior is subject to external forces. We are in the realm of nonlinearity and time. the organization evolves in an environment which has its own dynamics and with which a continuous exchange of information. 1. Stagner 1969). coexist within the firm. In this situation. where risk is measured. March and Olsen 1976. "'preoccupation with the decisions runs the risk of imputing a direct relationship between the abstraction of mental intention at the individual level and the concreteness of action at the organizational level. organizations encompass numerous actors.97. on one hand. Hannan and Freeman 1977). no direct relationship can exist between the different actions and action-takers of the organization. for instance. To complicate things further. And the dynamics of these forces are impossible to predict or even describe with precision and comprehensiveness. 1972. and all of these in a dynamic mode. value systems and preferences which change over time and with experience (Lichtenstein and Slovic 1971. on the other hand. Springer and Hofer 1978. other authors such as King and Cleland (1978). A. Pettigrew (1990. decisions follow an orderly progression: problem identification. and they do all this in a dynamic manner. Pinfield (1986) shows that structured and anarchic processes are complementary. which has received a great deal of attention from researchers in the natural sciences. Wooldridge and Floyd (1989) suggest that separation between formal and informal systems (or between synoptic and incremental processes) is difficult to make. recognizes that "changes have multiple causes and are to be observed by loops rather than by lines." Moreover. January-February 1995 This content downloaded from 111. where laws are immutable. 10). They sometimes have contradictory objectives and stakes and they intervene at different phases of the evaluation-choice-action process. p.e. also. chance. stress the importance of emergent strategies in the strategy formation process. Steiner (1979).68. decisions originate from organizational "garbage cans" in which problems are generated from inside and outside the organization and the solutions are the outcome of an apparent random process between actors (Cohen et al. try to coordinate their actions to exchange information and to interact in other ways. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . coordinated. In the former. is probably difficult to apply to less structured areas such as management. interactive and dynamic than the one which is presented by reduced models which are incomplete at best. and as a hesitating and sleepwalking actor. planned process. This adds a source of instability and. Reality is more complex. informality and disorder. The separation between the manager as a planner and organizer. a new layer of complexity. planned and thought-out approaches are combined with muddling through. 1976). FORGUES Chaos Theoryand Organization the organization. It also changes subject to learning and experience. is artificial. hesitate. However. 1990). search for solution and selection (Glueck 1980. we generally observe that systematic." Organizations can attempt to insulate themselves from the environment by controlling the external resources it provides (Pfeffer and Salancick 1978) or they can enact it (Weick 1979). actions undertaken by some actors influence the actions initiated by others later on. Tversky and Kahneman 1981. p. The environment might also act in selecting the organizations best fitted for survival (Aldrich 1979. Starbuck 1983). Mintzberg and Waters (1985). 1986). However. As Mintzberg and Waters (1990. The rational. at the same time. iReality contains elements of rationality. 4) said. No. hesitation. Finally. Effects of decisions are rarely direct and instantaneous. It is likely that the structure of the nonlinear dynamic organizational system changes due to the action of actors inside and outside the organization. THIETARTAND B. They show that the strategy formation process is based not only on deliberate processes but generally involves a lot of dynamic interactions. In the same vein. resources and energy takes place (Thompson 1967). linear. i. on the other hand. In the same vein. yesterday's action activates a reaction today which may lead to a new action tomorrow. As Barnard (1968. and other processes where several internal and external organizational actors act and interact. 6) says.

As Daft and Weick (1984. Weick (1977) and March (1981) suggest that activities which are not directly connected with the organization's mission are a means to improve its capacity of response to complexity and to changing conditions. disorder and change. Thus experimentation is deliberately not aimed at a specific objective.97. These authors stress the need for the organization to develop a set of new responses. even though the faculty for experimentation has been given deliberately to the organization. managers will be forced ORGANIZATION SCIENCE /Vol. Experimentation. When confronted with an uncertain environment. Knowledge. and bifurcation processes-are powerful enough to offer another perspective from which to view the way organizations work. it is necessary to allow freedom among the constituent units in the organization. Pascale (1990) describes the self-renewing organization as one which deliberately creates internal instability. build their knowledge.68. literally. initiative and experimentation. By giving the organizational actors enough freedom to experiment with new ways of doing things or by giving them enough resources to explore. innovation. might be in a better position to find an adequate course of action. 64) says. p. "for an organization to evolve continuously. thinks that self-organization originates from experimentation. indeed. A. Furthermore. new areas of growth. strange attractors. these include the forces of planning. by exploring new areas. The objective is to experiment and learn various modes of work which may later become the dominant feature. the organization develops a catalogue of responses and stimulates learning opportunities through multiple experiments. As Weick (1977. could not be an organization. However. through "bootlegging" or through planned decisions. scale invariance. the organization. In the same vein. are sources of instability and tend to push the organization out of its programmed course. On the contrary. The Organization as a Chaotic System In the review presented above on nonlinear dynamic systems and chaos theory. the organization. The coupling of these forces can lead to a highly complex situation: a chaotic organization. Some other forces push the system toward instability and disorder: the forces of innovation. and individual initiative. to generate creative conflicts between them. enable the organization to create a repertory of responses to environmental demand. 1979) has suggested. For instance. It selects adapted modes of action to its changing working conditions. becomes the real source of learning. without constraint. Argyris and Schon (1978) see seeds of change behind the numerous instabilities and incoherences which generally go with programmed actions. These experiments. p. they are a source of disruption and disorder. It is through experimentation that organizational actors. as a consequence. Work on entrepreneurship (Burgelman 1983. the organization is free to question and challenge its ways of operating and. (1976). They do not keep the organization on its planned track and objective. time irreversibility. 1. structuring and controlling. In the same vein. in parallel with traditional ways of doing things. Self-organization is an organization which is able to discover. as Nonaka (1988. as yet. once put into practice. under such circumstances. In the same vein. Some forces push the system toward stability and order. 286) say. when they exist. The responses in this repertory which will ultimately prove to be useful cannot be predicted in advance. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . unknown demands from the competitive environment. The creation of such a repertory is perfectly coherent with the recommendations of Nystrom et al. the organization is not made only of experimentation. 6. January-February 1995 23 This content downloaded from 111.189 on Wed. It would be a maelstrom in perpetual change and revolution. Organizations also have counteracting forces at play. No. Since prediction is difficult in this situation. The qualitative properties evoked by chaos theory-sensitivity to initial conditions. through experimentation. can select from its repertory of new forms of relationships and arrangements. learning is a willingness to experiment and to search for other ways of doing things than those used in the past. THIETARTAND B. FORGUES Chaos Theoryand Organization to their advantage. according to Senge (1990). it is frequently preferable to let organizations find for themselves the types of operation they are best adapted to. out of its stable equilibrium. for instance.R. Bygrave 1989) is illustrative of the way some organizations create the necessary instabilities to experiment with different types of innovations. and then the organization itself. As a consequence. answers to its problems. Contributions on self-renewing and self-organizing organizations are coherent with works on organizational learning. the organization creates a catalogue of responses to different and. Finally. we have seen that deterministic chaos can be found when there is the simultaneous influence of counteracting forces. implementation of new forms of operation." By doing so. if forced to change its traditional responses. Weick (1977). is based on the same premise. it prepares itself for new forms of operation which can be implemented when these new forms become the required answers to the emergent working conditions.

189 on Wed. Hickson et al. p. why do so many organizations still use planning? Sinha (1990) provides an answer.. traditional rational management schemes can be applied to their full extent. probably have a psychologically-based origin that the cognitive dissonance theory of Festinger (1957) can help to explain. 1. by providing an information network and encouraging communication (Quinn 1980). As a consequence. is a means to deal with important decisions. aims at minimizing the agency costs between the various layers of the hierarchy. THIETART AND B. 182). He is in agreement with Armstrong (1982)." Order is necessary. has been strongly challenged. Since. however. Cyert and March (1963). they can proceed in a rational manner. To fight against the feeling that they are in a situation where they are powerless. cognitive dissonance. which stress the apparent nonutilitarian purpose of formal approaches. order helps in creating the appearance of certainty. (1986) when they suggest that formal analysis is frequently used to justify decisions after the fact. It should make their actions more coherent and predictable. management control as a means of coordination is helpful. For instance. the control of managers by the organization's shareholders (Fama and Jensen 1983. for instance. As Daft and Lengel (1984. to enable the organizational actors to position themselves within the power structure and the hierarchy. order contributes to the closure of a too complex system for a cognitively limited mind. can be reduced. For instance. Furthermore. January-February 1995 This content downloaded from 111. reliance on standardized decision rules is used to "avoid" uncertainty (Cyert and March 1963). 1990) shows that the use of formal tools has other objectives than contributing substantively to the decision." They concur with Barnard (1968.97. Jensen and Meckling 1976) is supposed to result in a better alignment of the managers' and the owners' interests. management control. No. Formal tools are also used as a means of persuasion and to save time. This affirmation. 3) suggests. And on these islands. managers create islands of certainty. planning improves the readability of the organization and its numerous links with the environment. as formal tool of management. the organization's task is decomposed in a hierarchical manner. which is in total contradiction with their mission and "raison d'etre. also. She also agrees with Bower (1970). If this is the case. p. FORGUES Chaos Theoryand Organization to "wade into the ocean of events that surround the organization and actively try to make sense of them. p. Moreover. "the gathering of information provides a ritualistic assurance that appropriate attitudes about decision making exist." The organization needs order and stability to be able to achieve its mission as an organization. She agrees with Quinn (1980) when he says that planning is partly used to make managers feel more comfortable. 192) put it "in response to the confusion arising from both the environment and internal differences. These reasons. planning. Internal control proceeds from the same logic: to master what the organization is doing. The question remains as to what the real contributions of formalized approaches are and what pushes the organization to control and plan? Langley (1988. who suggests that planning is particularly important in situations where changes are crucial. ( . 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . Management control. A. which is created when managers are confronted with a problem that they intuitively know to be impossible to solve. Order is also necessary to create the facilitating conditions of decision making. Planning is frequently presented as an effective means that firms use to achieve their mission. also. Here.R. to fight against the cognitive limitations of the organizational actors. important decisions which are generally characterized by numerous ramifications and complexity. Furthermore. 6) for whom "the survival of an organization depends upon the maintenance of an equilibrium of complex character in a continuously fluctuating environment. By doing so. It helps in closing a complex system that is too complex to be dealt with in a global manner. Thanks to the decomposition of a broad mission into elementary tasks. As Weick (1979. it secures a better alignment of the different organizational actors' actions. It is more the sense of doing and 24 ORGANIZATION SCIENCE/Vol. contributes to a better coordination and monitoring of the diverse tasks the organization has to undertake in order to fulfill its mission. 6. He shows that formal planning systems contribute to decisions which are perceived as being important and risky. With certainty." Finally." managers rely on formal tools to create an illusion: the illusion of managing. planning is presented as a means to manage uncertainty. Here. organizations must create an acceptable level of order and certainty. ) Displaying the symbol reaffirms the importance of this social value and signals personal and organizational competence" (Feldman and March 1981 pp. For instance. suggest that planning might only be an artifact.. at the different organizational levels. organizing "is defined as a consensually validated grammar for reducing equivocality by means of sensible interlocked behavior. 177. managers avoid a reality which is in complete contradiction with what they are supposed to do and are paid for.68. By formalizing the decision-making process.

can be "very costly when it protracts an orientation that has proved to be dysfunctional. A progressive and continuous change of the relationships between two or more organizational variables leads an organization. We expect to see a similar phenomenon taking place in organizations. This change does not follow a continuum but takes place abruptly in a discrete manner. 611) conclude that momentum. This leads to the first set of propositions: PROPOSITION 1. it seems reasonable to assume that organizations are subject to counteracting forces which follow various periodic patterns and which may contain the seeds of chaos. in creating a highly complex situation. or chaos. 1. continuity and stability of change in strategy and structure due to past experiences. they increase the resistance to change and contribute. A Potentially Chaotic Organization Counteracting forces are at play in most organizations. Meanwhile. 77. Organizations move from one dynamic state to the other through a discrete bifurcation process.e. in a discrete ORGANIZATION SCIENCE/Vol. Indeed. The change can also take place through learning (Lant and Mezias 1992.R. PROPOSITION 2a. Rather than managing the inevitable chaos (taken here as a metaphor) of innovation productively. political coalitions and the existence of formal programs. "managers in big companies often seek orderly advance through early market research studies or Pert planning.68. For instance. Even though formal approaches help in closing the organizational system and make it more predictable. This is consistent with the quantum change theory of Miller and Friesen (1984) and the works of Greiner (1972). organizational actors have the power to change the relative importance of the dynamic forces at work." stresses the fact that complex systems tend to develop behaviors of their own. these managers soon drive out the very things that lead to innovation in order to prove their announced plans" (Quinn 1985. when confronted by a too complex and unpredictable reality. finally. Bifurcation Process Toward Chaos We have seen that a system evolves from one state to the other through a process of period doubling or bifurcation when the coupling between various periodic variables changes. PROPOSITION 2b. p." Finally. In this complex situation. As a consequence. tightly coupled relationships than the outcome of inadequate human actions. THIETART AND B. PROPOSITION la. 6. the higher the likelihood of encountering chaos. This leads to the second proposition: PROPOSITION 2. Miller and Friesen (1980). Chaos is also more likely when the system variables follow different periodicity patterns and are highly coupled with each other.189 on Wed. he shows that crises are more the result of complex. through aperiodic coupling. than their effective use which matters. p. as Weick (1977). Perrow (1984). In the same vein. For example. managers can reduce a dissonance which has been created by their feeling of powerlessness. can lead the organization from a stable to a chaotic state or from a chaotic to a stable state via periodic behaviors. i. January-February 1995 25 This content downloaded from 111. We know that many nonlinear dynamic systems are frequently chaotic when the number of system variables is equal to or greater than three. March 1991) and experience (Tushman and Romanelli 1985). The larger the number of forces with differentperiodic patterns. learning and experience modify the strength and the nature of the relationships between organizational variables. in his study of "normal accidents. Some organizations might be dominated by forces of stability. No. However. periodic equilibrium. in his famous study on the Apollo 3 mission has shown. A. An organization will always be in one of the following states: stable equilibrium. search for order through excessive rationalism can be disruptive. FORGUES Chaos Theoryand Organization mastering that the formal tools provide. The greater the number of counteracting forces in an organization. For instance. it can be disrupted. organizational culture. Organizations are potentially cha- otic. Miller and Friesen (1980. periodic or chaotic-the organization is in. is also unsettling. the organization is likely to remain in one of its dynamic equilibria. the order that formal tools provide. some by forces of instability or. for instance. The change. As a consequence. PROPOSITION lb. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . Based on the empirical and theoretical evidence discussed above. This is obviously the case for many organizations. Whatever the state-stable equilibrium. order may lead to chaos. Mintzberg and Waters (1985) where they show that organizations do not evolve in a continuous manner but step-by-step. both forces might be at play in a balanced manner and lead to deterministic chaos. the higher the likelihood of encountering chaos.97. a condition which is frequently met in organizations.. our parenthesis).

with his logical incrementalism. In this situation. the organization's evolution cannot be predicted. the greater the exchange of energy and resources with the environment. even the slightest variation can have a great impact on the organization. Based on the discussion above. with their disjointed incrementalism. initial conditions will have a definite impact on the organization. In the same vein. islands of stability are likely to emerge in a sea of chaos. Miller 1986. By proceeding by small steps. This leads to the fourth proposition: PROPOSITION 4. However. a small change in one variable has an unpredictably large impact on the system's evolution. no one can predict the long term behavior of an organization when in a chaotic state.R. it is the environment and the internal organizational dynamics that matter most. ceteris paribus. They are recognizable patterns of structures and processes. Isenberg 1988).. In the former case. there are many instances where incrementalism is impossible and where large changes will have to be made. Forecasting is impossible. but behavior and. There is an equivalent in the realm of organizations. PROPOSITION 3b. Particularly in the case of dissipative systems which exchange energy with their environment (as it is the case of organizations). the faster the system tends towards its attractor. As a consequence. These islands are the strange attractors. propose for the organization. Even in the case of a small change. they contribute to closing a complex system. These are step-by-step approaches which allow managers to proceed marginally. FORGUES Chaos Theoryand Organization manner. for example.97. However. also. prediction can only be in the very short term. managers make bets on the future since they cannot rely on forecasts. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . Small variations analysis is the mathematical equivalent of what Braybrooke and Lindblom (1970). because in the long term. As a consequence. These attractors have an organizational equivalent: the organizational configurations which demonstrate regularities in their macro characteristics even though they may reveal large differences in their internal processes. two situations may occur: first.e. a small cause can have a big effect. This is the famous "butterfly" effect. Miller and Friesen 1984). speculate that organizational growth strongly depends on the founding conditions. and Quinn (1980). the managers are in a position to observe the direct effects of their actions. i. unpredictability is the highest.e. Organizational Configurationsas Strange Attractors Within the chaotic domain. In mathematics. organizations are "attracted" to an identifiable configuration.. Within an attractor. 26 ORGANIZATION SCIENCE/Vol. nonlinear dynamic systems have a sensitive dependence on the initial conditions. small advantages created new advantages in the future for the newly founded firm. By doing so. when the organization is in its chaotic domain. PROPOSITION 3a. 1. Linearization of the system makes the link between cause and effect more direct. however.68. a third proposition can be made: PROPOSITION 3. Proceeding incrementally improves the predictability of what managers do. better predictability can be achieved if the system is linearized. second. When in a chaotic state. unpredictability are limited. rejoining Kimberly (1975) and Stinchcombe (1965). Within the configuration. January-February 1995 This content downloaded from 111.189 on Wed. without radical shocks. In such cases. a high complexity exists and predictability is low. a situation where attractors limit behavior to a subset of the domain. there is still a high degree of freedom. No. i. Eisenhardt and Schoonhoven (1990). patterns appear: the strange attractor. regardless of the type and degree of change. they constitute an "envelope" to feasible behavior. ceteris paribus. they can modify the thrust of their effort in an almost continuous manner and make the necessary reorientations. the impact of an incremental change can be predicted in the very short term. nonlinear systems are transformed into linear relations. Whatever the quality of the managers and the quality of the actions. it is just a question of time before an unexpected behavior develops. whatever the horizon. Vh"en in a chaotic state. It is admitted that the greater the dissipation is. In the latter. especially at a global scale and in the long term. linearization is brought about with a small variations analysis. As a potentially chaotic system. In many situations. the impact of a change has an unpredictable long term effect. Organization configurations have been widely discussed in the literature (Miles and Snow 1978. Prediction Impossibility When in a chaotic domain. THIETART AND B. When in a chaotic state. from a stable to a chaotic state via an intermediary periodic behavior. a situation where the entire domain can be explored by the organization (this is the case of "deterministic noise") and. Nevertheless. 6. As a consequence. as a consequence. They observe that initial. A. Numerous examples exist where events do not take place as expected and where managers admit their powerlessness to predict what will happen tomorrow (see. For instance.

who advise organizations to "unlearn" in order to avoid falling into the trap of routine when new responses are required to confront organizational crises. Consequently. generally. similar behaviors and configurations should. In the same vein. unit. generally. have a fractal form. We are aware that ORGANIZATION SCIENCE / Vol. generally. As an example and based on his thorough study on how successful organizations fail. If the scale invariance property of chaotic systems. no cause in one organization can have a same effect in another organization. unit. it is unlikely that the same action. the system's behavior is highly complex and unstable. the same action taken by two organizations never leads to the same result. Research in organizational learning and cognitive processes makes assumptions that resemble our scaleinvariance premise. group and individual levels. 5a. the propositions were related to research in the field of organization. generally. however. consistent with chaos theory. This literature generally assumes that there is a similarity between processes taking place at the organizational and the individual levels. THIETART AND B. will lead to the same result. If the assumption made on the chaotic nature of organizations is correct.189 on Wed. we can observe that this complexity is also organized and that. 6. Similar actions taken by organizaPROPOSITION tions in a chaotic state will never lead to the same result. When in a chaotic state. group and individual levels. Not only are the results unpredictable but. PROPOSITION 6a. FORGUES Chaos Theoryand Organization PROPOSITION 4a. PROPOSITION Organizational Scale Invariance Inside the attractor space. generally. it seems unlikely to be the case for organizations. organizations. That is to say that. we should. PROPOSITION 6b. When in a chaotic state. Other theories. 1. A sixth proposition follows: 6. When in a chaotic state. This is the scale invariance property. Miller (1990) shows that the very actions which once produced excellent results might lead one day to failure. at the group and at the individual levels. which asserts that such a property does exist.97. A. observe scale invariance in the organizational world. This challenges many approaches based on what the best organizations are doing. similar PROPOSITION structurepatterns are found at the organizational. For example. The point here is not to confirm the assumptions made by these works but to rely on theories which have implicitly assumed scale invariance of some sort in organizations. When in a chaotic state. a system can encounter the same situation several times. at the suborganizational. When in a chaotic state. 4b. Actions' Irreversibility The last proposition deals with the irreversibility of chaotic systems. The six sets of propositions above are derived directly from the qualitative properties of chaos theory. Even though there are opposite arguments for the existence of scale invariance in organizations.68. January-February 1995 27 This content downloaded from 111. two identical actions taken by a same organization always lead to two different results. organizations are more likely to adopt a specific configuration than a deterministically "random" pattern. in an organization. As a consequence. we should observe several layers of similar patterns and configurations at the organizational. This argument gives support to Nystrom and Starbuck (1984). similar PROPOSITION process patterns are found at the organizational. even in the case where actions are based on similar past experiences. Cohen (1991) shows emerging convergences between results of research made on individual and organizational learning. in their chaotic domain. In theory. the work of Lawrence and Lorsch (1967) on the structural differentiation of organizational subunits needed to adapt to different environments is inconsistent with the preceding argument. it is very unlikely that two similar situations across organizations will ever be observed. 5b. For instance. However. The greater the openness of an organization to its environment. it reproduces at a smaller scale what is observed at a more global level. organizations should have a fractal form. the more likely is the "attraction" by the organization to a given configuration. the probability of seeing such a recurrence is so low that we can consider that a chaotic system will never find itself twice in the same situation. taken twice. since the number of organizations is limited and much smaller than the number of possible situations and outcomes. in his review essay. PROPOSITION 5. When possible.R. Hhen in a chaotic state. we nevertheless suggest a fifth proposition. To rely on successful practices as a basis to manage in a different context can only lead to deception. results are different. tend to go against this scale invariance property. No. holds for natural chaotic systems. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . For example. As a consequence. be observed at different scales. However.

from the individual to society as a whole. invariance at different organizational scales (fractal forms). The incompleteness is not too bothersome if models are limited to description and interpretation without attempting to prescribe and predict. NJ: Prentice-Hall. Furthermore. 2 Oct 2013 00:36:34 AM All use subject to JSTOR Terms and Conditions . Second. They can become an organizing device and create the conditions for a new order to come. (1979). let chaos develop because it is the only way to find new forms of order. H. is impossible to grasp. incoherence. And one or several modes can become the new organizational equilibrium whose characteristics are impossible to anticipate. Acknowledgements We wish to thank Ivar Ekeland for introducing us to chaos theory. Sanglier (1978). Global reality. but not too much. organizations face two contradictions: first. Disorder gives an opportunity to explore new ways of doing and acting. the forces of order may create a high level of complexity and may be a source of chaos. insists upon the necessary experimentation that organizations must undertake if they want to survive. They are sources of internal disorder which might lead to major changes in the future. the emergence of a new form of order and stability. because of the dissipative nature of open systems such as organizations. THIETART AND B. However. provides a means to explore diverse modes of operation. look for order. 265-280. Prescription and prediction imply perfect knowledge of the interrelationships between variables and their dynamics over time that we do not have. and stepwise change processes (bifurcation) give a complementary theoretical support to several existing theories and. As a consequence chaos contains the seeds of new stabilities. For instance. January-February 1995 This content downloaded from 111. attraction toward configurations (strange attractors). Search for order is an attempt to build islands of certainty and rationality where purposeful action can be undertaken. We also wish to thank Jean-Claude Thoenig and anonymous reviewers for their very helpful comments on an earlier draft of this article.R. forces of order and stability are used to close a system which is too complex to be mastered by cognitively limited organizational actors. "Dynamic Models of Urban Growth.68. Researchers and managers are confronted with a major challenge that the incompleteness of traditional models cannot help to meet. Experimentation with new organizational paradigms permits the development of catalogues of configurations from which the organization will be able to choose when the forces of change are more powerful than organizational viscosity and resistance. The combination of the forces of stability and change can push the organizations towards chaotic domains where deterministically induced random behavior is the rule. order is a means to create the illusion of management. Among these features. This illusion is forged by organizational actors who are confronted with the impossible challenge of achieving a mission without having the capacity to succeed. 1." Journal of Social and Biological Structures. referring to the works of von Bertalanffy (1975) and those of Jantsch (1980). 1. E." Experimentation. the qualitative properties of chaos theory have provided several interesting insights on how organizations might work. P. and M. These forces contain the seeds of order and chaos. Already. such features as prediction impossibility (sensitivity to initial conditions). FORGUES Chaos Theoryand Organization some of the work. 6. Since the evolution of the environment is unpredictable. It is an organizing force. forces of change are destabilizing because of their tendency to push the system out of its "orbit. Thus. by generating multiple responses. which is generally well explored in the natural sciences. Allen. Also. open new avenues for research. Order can lead the organization to act incoherently with respect to the constraints it is subject to. They create demands which are not necessarily consistent with the planned objectives. Smith (1986). Englewood Cliffs. paradoxically. On the other hand.189 on Wed. 28 ORGANIZATION SCIENCE/Vol. A. needs to be further researched in the realm of social sciences. at the same time. Organizations and Environments. because it may be a source of chaos. Empirical research now needs to be done in order to explore in detail the implications of what has been proposed. internal disorder. for instance. On one hand. put forward as a support to the propositions. References Aldrich. It creates resistance to change and leaves the organization in an artificial limbo. chaos has an underlying order: the strange attractor or the organizational configuration. nonreplicability of past situations (time irreversibility).97. it might facilitate adaptation to the unknown demands of the environment. As a consequence. No. M. the forces of change favor. through multiple coupling. Chaos theory. several seem worth exploring. is more suggestive and does not constitute undeniable proof. diverse and diverging activities from the organization thrust are all sources of instability. The consequence of relying on submodels is that what we observe may be apparent randomness. However. order is also an unsettling force. Concluding Comments Chaotic organizations are driven by counteracting forces of change and stability. Furthermore.

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