Running Head: Management process, linear and nonlinear management, ordinary and extraordinary management, rational management, chaos theory
Management - from rational management to chaos theory Submitted to Dr. D. Coleman By JJ de Klerk
In partial fulfillment of the requirement for the
Doctorate in Business Administration
Swiss Management University
March 3, 2012
1. Introduction Developments over the last few decades have led to a new way of thinking in economic and management approaches. The scientific approach to management, which emphasizes the basic management functions of planning, organizing, leadership and control, now seems unable to explain the era of change that characterizes economies and organizations
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This applies equally to organizations and economies. Rational management depends on negative feedback in order to identify deviation from set objectives and the vision (Stacey, 1995). Porter (2008) identified five major forces in the environment which can define the competitive nature of organizations, namely the bargaining power of buyers and sellers, the threat of new entries and substitutes in the market, and the level of rivalry in the industry. A set of economic and technical characteristics determines the strengths of each of these forces. This model is focused on a cause and effect approach, and fits within the rational management approach. The problem with this approach is that decision-making simply focuses on a fit with the environment and leaves little room for choice (Parker et al, 1994). Choice will be determined by environmental constraints, because adaptation to the environment will determine what a successful decision will be.
Major companies such as Nike, Reebok and Apple try to achieve their competitive advantage through outsourcing production to areas where they have lower labor and material costs. Stiglitz (2009) warns against the social cost of this approach to try and achieve the lowest possible labor cost.
3. Chaos theory compared to the rational model of management We are living in an era of uncertainty and therefor continuous change.