An analysis of the impact of chaotic dynamics on management information flow models

Defined very broadly, Chaos Theory is the study of the behavior of dynamic, nonlinear, feedback equations which, with certain parameters, produce random-appearing output, although all parts of the equation system are deterministic. In this research we use the insights provided by the study of Chaos Theory to investigate how chaos can impact management dynamics and thus influence managerial decision-making. It is common to use dynamic mathematical models as aids to management. If model formulation is such that the model produces chaotic output under certain circumstances, decisions based on the use of that model are seriously compromised. Further, when several models are used concurrently, the interactions between them may cause output to be chaotic even if no individual model exhibits such behavior. We provide an explanation of the reasons why this may happen, and illustrate the consequences through an example.