Chaos Theory and Organisational Structure

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Chaos Theory and Organisational Structure
Belay Gezahegn, Director, Ethiopia

The number of structures (rules and regulations) determines the performance of organizations inversely; organizational structure is determined by by external factors.
For instance, in a complex environment a small and flexible structure is preferable, while in a stable environment a big structure is appealing.
In this regard some researchers believe that organizational structure and organizational performance have an inverse 'U' relationship.
It is important to note here that in an unpredictable environment it is always difficult to identify the optimum level of structure to enhance performance.
It is to be understood that structure influences decision making and the chain of command in organizations. Chaos takes place when an organization cannot determine the optimum level of structure that will increase its performance in an unpredictable environment. In such a situation the leadership and decision making abilities of the executives are extra important.

Chaos Theory and Organizational and Lean Management
Margaret Ann Lee-Harvison, Analyst, United States
I would like to understand more about what is meant by "an inverse 'U' relationship".
Also, any opinions/ideas on how Lean management relates to Chaos Theory?

What is Meant by an Inverted U?
Belay Gezahegn, Director, Ethiopia
@Margaret Ann Lee-Harvison: If we draw a two dimensional graph with performance on Y axis and structure on X axis, we will end up with a graph that is positively sloped at first and then negatively sloped at the end having a shape of downward 'U'.
The slope shows an initial positive relationship between performance and structure i.e. with increase in structure, the performance increases at first. Then it declines with a further increase in structure. Locating the optimum point where a further increase in structure does no result in an increase in performance is usually a problem in unpredictable environments.
Editor: an inverted U looks like this: П (although with rounded edges).

Chaos Theory in Its Place
Gerald V. Todd, Entrepreneur, United States
Chaos is the stuff of nature and natural occurrences. It is also the stuff of creativity and unexpected discoveries and meetings. In human discourse, we organize chaos by first recognizing subsidiarity - personal responsibility and the freedom to develop one's gifts and talents - even in a corporate environment.
Second, there is solidarity - e pluribus unum (Editor: ~One out of many; ~out of many peoples, races, religions and ancestries has emerged a single people and nation. This used to be the de facto motto of the United States until 1956) - where individuals find a healthy, creative, working environment.
In that sense, chaos is the field of dreams where ideas can be generated, technologies combined or cross disciplined and success can also be a happy experience for all involved.
The danger - just as in politics - is the centralization of everything until it fails of its own weight. I don't know how this fit's a three-dimensional management model, but I hope it gives us something to talk about
Subsidiarity, solidarity and chaos - nice combination. If your business model is the reverse - us versus them - every man for himself, trouble lies ahead.

Chaos Theory as a Company Grows
Gerald V. Todd, Entrepreneur, United States
In the 1960's the idea of brainstorming sessions had some play - I guess you could call it creating "forced chaos" in a corporate setting. I haven't heard the term in a long time - though surely practiced in companies seeking to stay on the cutting edge of competitiveness.
I mainly see chaos as an initiating process. To ultimately succeed, chaos must lead to harmony. Central to that is the ultimate worth of each human being. That is what subsidiarity is all about - giving one the dignity of personal responsibility. Solidarity will follow.
A question: Do you know the first and last name of the custodian - and do you know anything about him/her other than as a pion cog in the corporate wheel.

Custodian in Relation to Chaos Theory?
Jaap de Jonge, Editor, Netherlands
@Gerald V. Todd: Thanks for sharing your valuable ideas. What do you mean with the 'custodian'? The custodian of what?

Chaos Theory as a Company Grows
Gerald V. Todd, Entrepreneur, United States
@Jaap de Jonge: I meant by 'custodian': the housekeeper, janitor, maid you might see everyday. Do you know their names? Do you speak to them or listen as a fellow human being? Part of solidarity in a company is equal treatment of the employees as people. They recognize and respect their positions, but work harder and better if they feel appreciated. If you have an arrogant pissant in the organization who demands, rather than ask for and gives respect, their real value to the company must be evaluated.
When traveling, do you tip the hardest working employees that tend to your needs in the hotel - the maids?
The smell of an elitist corporate structure filters down to the lowest levels Efficiency will reflect how each individual feels about the value of his/her contribution as seen by the executives.

Respecting and Trusting Employees in Chaotic Circumstances Leads to Creativity and Innovation
Jaap de Jonge, Editor, Netherlands
I see. And if I understand you correcly, you mean to say that for chaos to thrive in a positive way in large organizations, top managers should respect the custodians, right?


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