Chaotic Approaches to Strategy
This school considers that management has to address complexity and unpredictability. The application of this school of thought in a management context can suggest that the consumer is unpredictable and fickle therefore rational strategy is of little value. Whereas another paradigm emphasises the inter-connectedness of phenomena so that a small change in one area can produce amplified chaos elsewhere. To overcome chaos organizations can focus internally on the internal responses to unpredictability such as creative individualism, reactive speed and organizational ideology, rather than traditional ideology.
This paradigm of the chaos school seems to emphasise the chaotic elements of business rather than directly applying Chaos Theory. Therefore, there is a focus in the post-modernist marketing literature on fragmentation of societies and global individualism. Consumers are considered to be unpredictable, often subscribing to multiple highly contradictory value systems and lifestyles (Firat, Dholakia & Venkatesh, 1993). Strategy in these circumstances could involve merging the customer and the producer. Therefore, postmodernist writers, such as Firat and Shultz (1997), promote the trend towards customization to individual's self images, and the relationships and partnerships required to offer a customizing process, rather than a particular product.
From the postmodernist perspective the features of products are less important than the images conveyed by them. Thus customers purchase a pair of Nike training shoes, for example, not so much for their utilitarian value, but for their symbolic value (Crowther & Combe, 1999). Therefore from a postmodernist perspective, strategists need to re-consider the nature of knowledge. In an era of global hyper-competition knowledge of symbolic issues seems to be more important than utilitarian product knowledge.
According to writers such as Stacey (1991) business systems model chaotic systems. Therefore there is a need to focus on non-linear amplifying feedback mechanisms that are extremely sensitive to initial conditions. At a critical point, equilibrium is punctuated by chaos. Thus mangers need to recognise the inter-connectedness of organizational processes, so that there is an understanding that a decision taken to alter one process can cause amplified chaos elsewhere. However, as patterns of order are intertwined with disorder it is possible to predict some aspects of the future over the short term. The implications for strategic management are twofold. The first is to recognize this inherent long-term unpredictability and to consider the systemic nature of organizational reality. This systemic nature suggests that managers should not expect control and should not separate management issues because they are all inter-connected. The second is to focus on relatively stable aspects of the environment and the prediction and planning of strategy over the short-term only.
The main advantages of this school are that it recognizes the issues of unpredictable change that are especially pertinent as organizations contend with a move from national industrial economies to global information economies. The main difficulties associated with this orientation lie in developing solutions to deal with chaos. As Chaos Theory predicts, change at the societal or organizational level is not continually chaotic, but can enter into more predictable periods where other orientations may be more helpful.