Chaos Theory and recessional business environments: case studies of operational health of service and manufacturing organisations

Alan D. Smith

International Journal of Services and Operations Management, 2011, vol. 8, issue 2, 191-221

Abstract: Chaos Theory is a useful metaphor for understanding the complexity associated with both service and manufacturing businesses in the current economic recession. The study of recursive patterns that exist in chaotic business systems may yield important insights into ways that managers interact with significant stakeholders in an iterative fashion to produce profitable results from chaos. An examination of chaos through case studies of large firms headquartered in the Pittsburgh, PA metropolitan area has suggested the first step is to understand and accept chaos as a normal business operational factor. The key steps to integrating complexity into operational health, such as quality assurance, are communication and statistical thinking. Poor quality was usually the result of an unwillingness or inability of everyone on a business team to communicate changes, which is difficult to master, especially in an environment that experiences constant change. It was found that management typically becomes so involved in internal events and processes, frequently important external factors and people issues become neglected.

Keywords: chaos theory; business operations; project management; quality assurance; service operations; strategic positioning; supply chain management; SCM; economic recession. (search for similar items in EconPapers)
Date: 2011
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