The Butterfly Effect (Chaos Theory) in HRM
The Butterfly Effect concept was invented by the American meteorologist Edward N. Lorenz (1917-2008) to highlight the possibility that small causes may have momentous effects. The butterfly effect is the most commonly demonstrated concept stemming from Chaos Theory. It is based on the notion that everything is part of a larger system—small changes in one part of a system can result in larger changes to other parts of the system.
“It used to be thought that the events that changed the world were things like big bombs, maniac politicians, huge earthquakes, or vast population movements, but it has now been realized that this is a very old-fashioned view held by people totally out of touch with modern thought. The things that change the world, according to Chaos theory, are the tiny things. A butterfly flaps its wings in the Amazonian jungle, and subsequently a storm ravages half of Europe.”
— From Good Omens, by Terry Pratchett and Neil Gaiman
This theory does not cause the chaos, it only tries to say that the effect of the butterfly flapping its wings can change aspects of systems with which it is directly and indirectly involved.
This theory tries to explain that how the impact of new inputs into the system, such as the butterfly flapping its wings can yield positive or negative results depending on the type of intervention and culture. As an example of the butterfly effect, if an organization is implementing a new telephone system within their organization, this will affect the manner in which customer service representatives do their jobs. If the implementation is not successful this can affect both their customers and the community outside their organizations. The sequences of non-linear events could start with the company losing customers due to problems with decreased customer service from the new phone system. Next, the company’s customers could lose business due to changes in suppliers. As the effects network out through the system, businesses in other communities with no direct ties to the organization with the new phone system could lose customers or ultimately fail. This sequence of non-linear events can have a greater impact on their community than would be evident from traditional economic models. Applying Chaos Theory to organizations, we can see that short term solutions or small changes within an organization can have a catastrophic impact on the system as a whole.
Chaos Theory does have practical applications for organizations. As a method of understanding ongoing or past change, limited research has been conducted. However, this does not mean that it is not a viable tool for understanding change and a valuable tool for HRD practitioners. In context to HRM to understand how the Butterfly Effect can influence a workforce, consider the Hawthorne Effect, named in a study conducted to measure the effects of physical conditions on productivity. The Hawthorne Works factory of Western Electric commissioned the study to see if changes in light levels would cause their workforce to become more or less productive. The researchers ultimately found that neither higher nor lower levels of light affected worker productivity. Instead, productivity improved simply as a result of the company showing interest in employees’ wellbeing. Organizations are very complex systems, and each employee is an essential part of that system. That’s why it’s important for HR teams to understand that even small changes can make a big difference to workforce engagement. It is necessary for organizational leaders to be aware of the multiple systems which are intrinsically involved within the organization; both internal and external. Even a small change in the system can impact the whole. The theory says that small changes, including a competitor’s new business strategy or new technology implementation within the business, can account for large impacts on the organizational system.
Recognizing the salience of Chaos Theory the-
- Organizations need to find ways of embracing continuous changes as they emerge.
- Organizations need to stress the importance of teamwork among their members as a means of operation.
- Organizations need to focus energy on widespread involvement in decision making by those affected by the decisions.
- Lastly, organizations must remain flexible and emphasize a holistic process in the workplace, as opposed to emphasizing isolated tasks among individual members.
Dr. Deepmala Singh