The Interrelationship between Chaos and Management
Many studies related to organizational management have stressed the existence of continuous process of convergence and divergence, stability and instability, evolution and revolution in every organization. All these processes are embedded in organizational characteristics and in the manner organizations are managed (Thietart & Forgues, 1995).
The Organization as Chaotic System
Chaotic system and its properties have earned significant attention in the natural science and more recently in economics (Ruelle, 1991; Brock & Malliaris, 1989). In a chaotic state, the effect of change can be forecasted but only for short term and system properties makes it difficult to predict for long term. Even a small change which multiplies with the time can lead to different evolution. Organization is a dynamic and complex system governed by nonlinear relationship. It is such a set of interdependent parts which altogether form a whole in which each part contributes something and receives something in return from whole. Different organizations with internal and external diverse agenda work together coordinating their actions to exchange information and to interact in other ways (Fox, 2007).
Complexity Theory in Management Practice
Within the theory of Complexity, chaos is defined as particular mode of behavior and this particular mode of behavior also reflected in management practice within organization. This particular mode of behavior is concerned with certain kinds of complex systems. Within organizations complexity theory is the effective because it is common job of managers to decide the directions of organization and keep the organization from dangerous scenario. Management may trouble by making the organization system complex and can react by becoming quite intolerant of uncertainty. Complexity theory in management system stresses on factors, targets, and organizational structures to be fix. The management task is to deliver the mission of organization and do not ignore uncertainty. Within the management practice, this is done through determination of strategy, and the elimination of deviation. Stability within organization is achieved through management as the ultimate fortification against anxiety, which later on becomes necessary. All above mentioned managerial reflexes are counter-productive from complexity theory perspective. Within complexity theory, there is general and specific learning for management which emphasizes on the two ways. The reasons for focusing on the two ways are managerial structure and managerial strategy. These actionable proposals are taken from complexity theory (Parker & Stacey, 1994).
Ordinary and Extraordinary Management
In the time of chaos, management requires a new pattern of thinking to survive in the world. Managing the world in the intense demands for greater quality and efficiency is considered as alteration of alternatives to business as usual. In such case, the unusual becomes usual and the ordinary becomes extraordinary. Both ordinary and extraordinary have place in managing and leading organization. According to Stacey (1993), there is a key distinction between ordinary and extraordinary management.
Ordinary Management: For him, ordinary management is required when day-to-day problems have to be solved to achieve organization objectives. Ordinary management uses a logical analytic process entails data analysis, objective settings, rationale choices and evaluation of these choices against the objectives of organization, implementation by monitoring and through hierarchy (Malloch & O'Grady, 2009). Ordinary Management is also described as planning and management based on ideological consensus, with control at its centre. An efficient ordinary management is important for organization to deliver cost effective performance. Jackson (2000) describes the control parameter for managers which can help to ensure that organization functions at the edge of chaos. Thus good state is achieved and maintained and the legitimate system enables the ordinary management to plan and control short term performance because it cannot plan for long term future (Jackson, 2000).
Extraordinary Management: In contrast of ordinary management, extraordinary management is required in the organization to be efficient enough to transform itself when it is situation of open-ended change. In extraordinary management rationalistic decision making is not operative because they are required as the beginning point of ‘givens’ which must be disputed. Extraordinary management requires the use of the implicit knowledge and creativity present within the organization. This also requires the encouragement of informal management structures such as workshops about particular issues and processes, with membership from different business process and functions. Formation of such groups must be considerably natural, induced by paradoxes, anomalies and conflicts thrown up in the process of normal management. They have to organized, efficient of extending their remit. Under these circumstances, group learning will take place and its outcome will address to broader management process. According to Stacey (1993), ordinary management should not reject extraordinary management. According to him, both are needed in the organizations and they should be enabled to coexist.
However, there is an inherent tension between the two modes of management. If the scopes of informal networks of extraordinary management are drawn too tight, it will shrink; and will be too loose, and the organization will move down into disorder, failing to deliver on its essential short-term tasks. The analysis of extraordinary management is limited because entire purpose of this analysis is to ensure long-term survival. The strategic role of senior management is largely depend on the facilitation processes of dialogue leading to creativity, rather than to control as final authority over an complex analytic process. Stacey (1993) has in particular relegated rather cursorily even those tools which may possibly be considered to be consistent with extraordinary management such as simulation and scenario analysis to a marginal role.
The minimized significance of analysis is declared rather than argued. However, it clearly branches from the organization differentiation. Stacey (1993) has drawn this organization differentiation between rationality and creativity. According to him, rationality is good, and important within organization management especially for dealing with the routine business. He further explains that rationality is not considered as optional job of sense-making in poorly structured situations. However, there are evidences of supporting the common sense that are not kept on practice rationality and creativity in such tidy compartments. According to Shallice (1996), handling the novel situations entails complex cognitive processes which have many rational components. According to Poincaré (1946), important role of an extensive, even exhaustive, analytic endeavor is involved in rationality. Ordinary as well as extraordinary management tools aim to have a change within organization. Different studies have made different claims identifying the managerial imperatives for the survival of organizations. There is inherent claim to have a more appropriate classification or description of the threats and opportunities dealing with organizations and their managements than has previously been expressed. Therefore it is suitable to assess the achievement of the management complexity.
There are no evidences about the complexity theory-based prescriptions for management pattern; structure and process generate the outcomes. The outcomes of the ordinary and extraordinary management based on complexity theory are commonly for long-term survival, the occurrence not vulnerable to study employing short-term experimental techniques. These evidences are verifiable and can be observed in successful corporate improvisation. Verifiable evidences are most persuasive to those who faced the events in question and to those who are already convinced. For many it is difficult to evaluate the representatives of demonstration samples. This is particularly so if, even accidentally, different standards of proof or disproof are employed for diverse sides of an argument. These distortions happen had happened in the case of Stacey (1992). The benefits of opportunistic policies are endorsed by showing examples of success, whereas the immediate dangers of formal planning methods are used by examples of failure. Yet there are failures of opportunism and analytic techniques.
The rational model refer to planning as a process of realizing a problem, establishing and evaluating planning criteria, creating alternatives, implementing alternatives, and monitoring progress of the alternatives. At management level rational model is decision making process which is undertaken to control the in the specific way of discovering, choosing and acting. In addition, rational model is in organizational behavior is the process of logical sound decision (Stephen & Judge, 2007). The multi-step relational model followed by management to make decision is as follows:
This multi-step rational model aims to demonstrate a logical flow from orderly path from problem identifying the solution.
Method of Rational Model
Rational decision-making follows a number of steps as below:
Verify and Define the Problem: In the first step of rational decision making model, there is need of verifying, defining the problem. In this step problem needs to be identified including definition of initial solution and basic analysis such as using creative devising, inspirations and brainstorms. Usually management has to define the problem which is overlooked by higher management. For this model identification of problem is very significant if it is not recognized then management may face problems related to use of resources. Management manages to come up with a possible alternate solution (Morçöl, 2007).
Development of all Possible Solutions: At this step, two or three final solution to the problem needs to be found. Basic implementation of the problem is also included in the step of the model. This is best performed in group because different people can come up with different ideas or solution to the problem. In group process there is always possibility of alternative ideas and necessary information (Brown & Paschoud, 2005).
The Development of Objective Assessment Criteria: At this stage, secondary and final solution of the problem is evaluated through criteria measurements that determine success and failure of alternative ideas or solution. This can include analysis of site suitability and site sensitivity. Having preformed first and second step or after defining the problem and exploring all possible solutions and options, this process is essential because evaluation of solution and information can be expected to be alternative of possible solution. At this point, there is need of optional criteria for measuring the success and failure of decision making.
The Selection of the Best Solution Developed: This step refers to the final solution as well as secondary implementation to the site. At this point, the solution strategy is divided into different strategies showing the ways to implement the solution to the site. The selection of the best developed solution occurs on the base of the assessment criteria and the analysis performed in previous steps. Including this step, above three steps are considered as essential steps for Rational Decision Making Model.
Implementation of the Most Preferred Alternative Solution: At this step, final actions are made including final implementation to the site
This step includes final implementation to the site and basic monitoring of the result and results of the site. This step also includes the building and renovations of the process.
Monitoring and Evaluation of Outcomes and Consequences: At this point secondary and final monitoring of the outcomes or results of the decision making. This step is performed over a long period of time.
Feedback: At this step, implementation of solution is either modified or changed after the process of monitoring. Feedback step may include the modification of decision and action taken on the base of evaluation. The steps taken for this step may include the following:
Description or definition of the problem; it is worth mentioning here that it does not include goal or objective of the decision making process. This is done by the planner of the decision making process.
Numbers of alternatives are re-considered in regard to solution of the problem. This process also includes analysis of each possible solution.
Fundamental options of all alternatives for best suitable considering feedback and effect of the client group.
The designing and implementation of the most fit and suitable solution as an experiment.
The evaluation process of impacts of course of action is undertaken to assess if the problem is alleviated or feedback from course of action.
The decision or course is continued or changed on the base of feedback and it evaluates if institutionalization process of the course of action is effective (Brooks, 2002).
Requirements and Limitations of the Rational Model
To make the rational decision making process as a successful it is important to consider that it fulfills certain assumptions and requirements (Lucas & Sargent, 1981). The utmost requirement of performing the rational decision making model is gather appropriate infuriation both in terms of accuracy, quantity and quality. This also refers to alternative solutions of the problem. For this model it is also assumed that substantive knowledge of the cause and effect relationships relevant to the evaluation of the alternatives is also acquired. It is further assumed that thorough information is available related to all alternatives selected for the problem. All alternatives are ranked and chosen as best of all alternative solution. Limitations related to rational decision making model are as follows:
For performing whole process, a great deal of time is required.
For making the model successful it requires great deal of information.
It is based on assumed rational and measurable criteria
The assumptions are accurate, stable and with complete information of all the alternatives, , goals and outcomes
Assumptions are rational, reasonable, and non political (Daft, 2009).
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