Brian Futterman & Scott Renick SYSTEMS  &  CHAOS  THEORY
Gee whiz, look at that system!
Chaos and Complexity (anything but) <ul><li>Complex adaptive systems </li></ul><ul><ul><li>Evolving rules, dynamic environ...
…meaning… <ul><li>Complex adaptive systems behave in  CHAOTIC  ways. </li></ul>
Beinhocker says: All are open systems comprising a number of agents whose dynamic interactions self-organize to create a l...
Beinhocker says: EMERGENCE!
Closed vs. Open Systems Beinhocker,E.D. (1997) &quot;Strategy at the edge of chaos.&quot;  The McKinsey Quarterly, 1, p. 27
Punctuated Equilibrium (Complexity with Chaos) Beinhocker,E.D. (1997) &quot;Strategy at the edge of chaos.&quot;  The McKi...
Perspective
What Chaos does <ul><li>Bifurcations (divergence) occur when a new equilibrium is established, or punctuated, and an organ...
In other words…
Bifurcations
Aperiodic nature
History repeats itself? Well, it’s complicated. <ul><li>McBride, 1999: </li></ul><ul><ul><li>“… chaos refers to what might...
… behaviour in chaotic systems may be perceived as unpredictable. Periods of inactivity may be  punctuated  by sudden chan...
Systems Theory
Systems Theory <ul><li>Entropy = disorder </li></ul><ul><ul><li>…double negative… </li></ul></ul><ul><li>Negative entropy ...
Chaos describes a system that is predictable in principle but unpredictable in practice. Although the system follows deter...
Sources <ul><li>Beinhocker, E. (2000). Strategy at the Edge of Chaos.  McKinsey Quarterly , 1-17. </li></ul><ul><li>McBrid...
Brian Futterman & Scott Renick SYSTEMS  &  CHAOS  THEORY
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Chaos And Systems Theory

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  • Systems Theory = theory about the nature of complex systems (science, nature, society, etc.) Looks at the behavior of groups of objects that work together to produce a result.
  • Closed-system equilibrium (ball-in-the-bowl) are stable, impervious to change, static. Traditional view of economics and organizations. Quote: Companies would have no reason to innovate if it were not for market pressures. If it were a closed system in constant equilibrium, there would be no incentive for change!
  • Chaos is used to describe the behavior of complex systems.
  • Emergent complexity is a bottom-up phenomenon. Flocks of birds, fish, even human crowds, etc. Large scale order from a small scale interaction. NOT top-down There is no leader like a conductor in an orchestra or a general in the army.
  • Closed-systems are like the first picture (no disturbances). Shocks represent unanticipated, irregular change that occurs because of sensitive dependences – NOT because they are random. Complexity then settles with a new equilibrium.
  • Chaos And Systems Theory

    1. 1. Brian Futterman & Scott Renick SYSTEMS & CHAOS THEORY
    2. 2. Gee whiz, look at that system!
    3. 3. Chaos and Complexity (anything but) <ul><li>Complex adaptive systems </li></ul><ul><ul><li>Evolving rules, dynamic environment, interacting agents </li></ul></ul><ul><ul><li>Ants scale to organizations </li></ul></ul><ul><ul><li>“Anti-equilibrium” </li></ul></ul><ul><li>Chaos vs. stasis – two possible states of a CAS with shifting patterns and group interactions; constantly in flux </li></ul><ul><li>“Companies don’t innovate; markets do.” –Dick Foster </li></ul>
    4. 4. …meaning… <ul><li>Complex adaptive systems behave in CHAOTIC ways. </li></ul>
    5. 5. Beinhocker says: All are open systems comprising a number of agents whose dynamic interactions self-organize to create a larger structure. Eric Beinhocker, Strategy at the edge of Chaos , 1997 Writing about cities, forest ecosystems, the immune system, and the Internet.
    6. 6. Beinhocker says: EMERGENCE!
    7. 7. Closed vs. Open Systems Beinhocker,E.D. (1997) &quot;Strategy at the edge of chaos.&quot; The McKinsey Quarterly, 1, p. 27
    8. 8. Punctuated Equilibrium (Complexity with Chaos) Beinhocker,E.D. (1997) &quot;Strategy at the edge of chaos.&quot; The McKinsey Quarterly, 1, p. 32 Shocks to the equilibrium (punctuations) relative to the organizational ‘status-quo’ (stasis) … this behavior is Chaos Adoption of ESSPs Change in productivity
    9. 9. Perspective
    10. 10. What Chaos does <ul><li>Bifurcations (divergence) occur when a new equilibrium is established, or punctuated, and an organization is found at the edge of chaos, prompting action. </li></ul><ul><li>Strange attractors are possible scenarios/results that lie at the end of a bifurcated sequence of events. </li></ul>Beinhocker,E.D. (1997) &quot;Strategy at the edge of chaos.&quot; The McKinsey Quarterly, 1, p. 35
    11. 11. In other words…
    12. 12. Bifurcations
    13. 13. Aperiodic nature
    14. 14. History repeats itself? Well, it’s complicated. <ul><li>McBride, 1999: </li></ul><ul><ul><li>“… chaos refers to what might be called ordered disorder” </li></ul></ul><ul><li>Patterns will emerge and may resemble a trend, but cannot be used for anything beyond mass generalizations. </li></ul>
    15. 15. … behaviour in chaotic systems may be perceived as unpredictable. Periods of inactivity may be punctuated by sudden change, apparent patterns of behaviour may disappear and new patterns unexpectedly emerge. Such behaviour emerges in complex systems. This chaotic behaviour does not indicate a lack of order . Rather, the order is difficult or impossible to describe in simple terms and requires complex narrative description. McBride, 2008 EMPHASIS ADDED
    16. 16. Systems Theory
    17. 17. Systems Theory <ul><li>Entropy = disorder </li></ul><ul><ul><li>…double negative… </li></ul></ul><ul><li>Negative entropy = increased order </li></ul><ul><li>Openness & feedback </li></ul><ul><ul><li>Feedback can be positive or negative </li></ul></ul>
    18. 18. Chaos describes a system that is predictable in principle but unpredictable in practice. Although the system follows deterministic rules, its time evolution appears random.
    19. 19. Sources <ul><li>Beinhocker, E. (2000). Strategy at the Edge of Chaos. McKinsey Quarterly , 1-17. </li></ul><ul><li>McBride, N. (n.d.). Chaos Theory and Information Systems (pp. 1-13, Tech.). Leicester, UK. </li></ul><ul><li>McBride, N. (2005). Chaos theory as a model for interpreting information systems in organizations (pp. 1-22, Tech.). Leicester, UK. </li></ul><ul><li>Wikipedia contributors. &quot;Systems theory.&quot; Wikipedia, The Free Encyclopedia . Wikipedia, The Free Encyclopedia, 18 Jan. 2010. Web. 22 Jan. 2010. </li></ul><ul><li>Wikipedia contributors. &quot;Chaos theory.&quot; Wikipedia, The Free Encyclopedia . Wikipedia, The Free Encyclopedia, 21 Jan. 2010. Web. 22 Jan. 2010. </li></ul><ul><li>Wikipedia contributors. ”Chaos.&quot; Scholarpedia . Scholarpedia, 26 Jan. 2010. Web. 26 Jan. 2010. </li></ul>
    20. 20. Brian Futterman & Scott Renick SYSTEMS & CHAOS THEORY
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