Abstract

Strategic Management JournalVolume 15, Issue S2 p. 167-178 Article Chaos theory and strategy: Theory, application, and managerial implications David Levy, David Levy Department of Management, University of Massachusetts - Boston Boston, Massachusetts, U.S.ASearch for more papers by this author David Levy, David Levy Department of Management, University of Massachusetts - Boston Boston, Massachusetts, U.S.ASearch for more papers by this author First published: Summer 1994 https://doi.org/10.1002/smj.4250151011Citations: 239AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Abstract This paper argues that chaos theory provides a useful theorectical framework for understanding the dynamic evolution of industries and the complex interactions among industry actors. It is argued that industries can be conceptualized and modeled as complex, dynamic systems, which exhibit both unpredictability and underlying order. The relevance of chaos theory for strategy is discussed, and a number of managerial implications are suggested. To illustrate the application of chaos theory, a simulation model is presented that depicts the interactions between a manufacturer of computers, its suppliers, and its market. The results of the simulation demonstrate how managers might underestimate the costs of international production. The paper concludes that, by understanding industries as complex systems, managers can improve decision making and search for innovative solutions. Citing Literature Volume15, IssueS2Supplement: Strategy as a field of study: Why search for a new paradigm?Summer 1994Pages 167-178 RelatedInformation