Chaos Theory and Organisational Structure

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Belay Gezahegn
Director, Ethiopia

Chaos Theory and Organisational Structure

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.

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