Business organisations can represent what in physics and mathematics are designated "chaotic" systems. This paper proposes that viewing organisations in terms of complexity theory may assist leaders in fine-tuning managerial philosophies that provide orderly management within a culture of organised chaos, for it is on the "boundary of chaos" that the greatest creativity occurs. In the 21st century, companies will no longer be effectively managed by rigid objectives or instructions. Their capacity for self-- organisation will be derived from how their members accept a shared set of values. Complexity theory deals with systems that show complex structures in time or space, often hiding simple deterministic rules. This theory holds that once these rules are found, it is possible to make effective predictions. The state of chaos that self-organises, thanks to the appearance of the "strange attractor", leads to creativity and innovation. In this self-organised state of chaos, members are not confined to narrow roles, and develop their capacity for differentiation, growing toward their maximum potential contribution to the organisation. In this way, values act as organisers or "attractors" of disorder In a culture that cultivates or shares values of autonomy, responsibility, independence, innovation, creativity, and proaction, the risk of short-term chaos is mitigated by an overall long-term sense of direction. A more suitable approach to manage the complexities that organisations are currently confronting is to alter their dominant culture under the principles of Management by Values (hereafter) MBV.
What's the first axiom of factory efficiency? Every manufacturing manager has long understood the benefits of JIT, the just-in-time delivery of raw materials to the plant. Following the North American Free Trade Agreement, such materials contributed to the world's largest trans-border shipping operation; every day, goods valued at over $1 billion were crossing between Canada and the United States. But following the American calamity of September 11, 2001, this border was sealed, then every shipment was meticulously monitored. By the next week, hundreds of assembly plants in both countries shut down because of delivery delays. JIT suddenly changed from solution to problem.
After decades of intense efforts to ensure the effectiveness of our organisations, we have reached the point where we must admit that it is not easy. But before conceding that previous efforts have been futile, we should examine the paradigms and tools that have been used in order to understand organisations. One conclusion emerging from this examination is that if we maintain current management theories, we must accept that no significant advances have been made toward a comprehensive understanding of which organisations will succeed and why. But if we change our mind-set and view organisational reality through a new prism, we may find the answers (Wheatley, 1999).
Traditional visions of organisations (and of the world in general) have always searched. for the easiest way to explain and predict natural phenomena. In this search, we have attempted to understand the universe by examining and explaining its separate parts. But partial analyses, as opposed to global ones, yield partial solutions. The importance of holistic perception is embodied in the folk-tale of four sightless people encountering an elephant for the first time. Each described the animal in terms of the part they happened to touch, yielding four disconnected theories about the nature of the beast. The same partial and distorted view of global reality applies to organisational theories of the past. Unfortunately, reality is not as simple as we would like. It has complex rules that can't always be understood through their individual parts.
The term "complexity" does not explain only one kind of system behaviour; it means a set of characteristics that one can identify in most natural systems, including organisations and their processes. …