Modern
Management Theory:
Chaos Theory
Edward Lorenz[1]
introduced the concept of Chaos Theory[2].
While the military were focused on predicting the weather day to day, using
vast computers to do it, Lorenz used an early desk computer to build a simplified
model to look at the underlined mathematics to see if the weather had hidden
patterns. His model came when he ran the model first with one set of numbers
and then again with what he thought were the same numbers but which the
computer had rounded off making them minutely different. What he found was that
this tiny difference in starting numbers instead of having no effect
dramatically changed his results.
One of the main
scientific assumptions that were made was that a small area in a large system
simply disappears, it has no consequence. Like a small imperfection in a single
part in a long assembly line that would make no significant difference to the
final outcome. This is the assumption that Lorenz challenged. His accidental
discovery had tremendous applications to the real world. He could see that when
a system changed, it needn’t be because at that moment something had caused it
to changed, it could be that the seeds of it’s destruction had been there and
were only growing, hidden in the mathematics all along. The moment the system
diverged was the end result of a tiny, unnoticeable change a long time ago.
Lorenz called it “the Butterfly effect”. The Linear system assumed that the
world is a quiet place were nothing really surprising happens. We will be fine,
we just need to know how it works and we can work everything out. Computers
allow us to explore things inputting data that previously would have been
thrown away, but as it turned out they changed the system all together.
The concept of
Butterfly effect[3]
is a term used to described how small changes can affect large, complex
systems. The term comes from the suggestion that if a Butterfly in Brasil flaps
it’s wings, a few weeks later Texas has tornados instead of clear blue skies.
It is a reminder of the impact that we have daily. Do we really realize that
our behaviors, moves, and actions touch all of the people we come in contact
with? Minor actions can create major results. We are all small fractions in the
world, but even the smallest actions can create ripples that change the
world.
A good
explanation is shown in the movie Jurassic Park:
The Nuclear Age
brought with it a tremendous potential of possibilities. There was a peak of
optimism towards the potential technology could do in the 1950s, associated
with technological development but also cultural that came after the World War
II. In the 1950s the future was going to be a planned utopia, of wide
boulevards and shining skyscrapers were we would all be happy and prosperous.
The computer allowed us to see and control another dimension: the future. With
the power of the computer, policy makers thought that they could now predict
and control the economy. Governments and corporate films confidently portrayed
a future of equilibrium, stability, progress and prosperity. This flawless
future was disrupted by the Chaos Theory, which includes unpredictability to
modern systems.
Consider the
application of the Chaos Theory everywhere. It has been of course proven that
the economy cannot be predicted even with the most advanced computational
system. Climate and weather changes cannot be predicted either. Human behavior
is unpredictable as well, regardless of probabilities and estimations, people
are just people and will behave differently. In the information Age, and as we
approach go deeper into the 21st century, Chaos Theory is there to
remind us that, whatever our accomplishments, we are after all just people.
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