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The external environment's effect on management and strategy: A complexity theory approach

Roger B. Mason (Durban University of Technology, Kwa Zulu‐Natal, South Africa, and Honorary Research Fellow, University of Wolverhampton, Wolverhampton, UK)

Management Decision

ISSN: 0025-1747

Article publication date: 13 February 2007

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Abstract

Purpose

This paper seeks to investigate the influence of the external environment on the choice of strategic management activities, from a chaos and complexity perspective, since a business environment is a complex adaptive system.

Design/methodology/approach

The study in this paper was of an exploratory nature, using the qualitative techniques of case study, depth interviews and document analysis to collect data from two companies each in the IT and packaging industries, namely, more successful/less successful companies.

Findings

The paper finds that first, it was proposed that more successful companies in turbulent environments would use radical, fast and disruptive strategies. Furthermore, strategy making should be a democratic, bottom‐up process and should be organic, self‐organising, adaptive and emergent. The results confirmed these propositions. Second, it was proposed that more successful companies in stable environments would use more traditional management and strategies and more formal strategy planning activities. The findings did not confirm this proposition, probably due to the fact that in reality a truly stable environment does not exist in South Africa.

Originality/value

This paper is of benefit to managers and strategists by emphasising a new way to consider the future management and strategies of their companies. Since businesses and markets are complex adaptive systems, using complexity theory to increase understanding of how to cope in complex and turbulent environments is necessary, but has not been widely researched.

Keywords

Citation

Mason, R.B. (2007), "The external environment's effect on management and strategy: A complexity theory approach", Management Decision, Vol. 45 No. 1, pp. 10-28. https://doi.org/10.1108/00251740710718935

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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