This paper builds a model to manage SMEs in turbulent environments using Chaos Theory. The empirical evidence was based on in-depth interviews with 25 business leaders of SMEs in the transition economy of Vietnam. The results revealed that to survive in turbulent environments, SMEs are required to quickly shift their businesses and strategic focuses, become involved in new businesses, be flexible and make innovative moves.
Get full access to this article
View all access options for this article.
References
1.
AakerD. and DayG. (1986), Marketing Research, New York: Wiley.
2.
AhlstromA. and BrutonG. D. (2010), ‘Rapid institutional shifts and the co-evolution of entrepreneurial firms in transition economies’, Entrepreneurship Theory and Practice, Vol. 34, No. 3, pp. 531–554.
3.
BrownS. L. and EisenhardtK. M. (1998), Competing on the edge: strategy as structured chaos, Boston: Harvard Business School Press.
4.
BruceE. P. (2008), ‘Managing strategy in turbulent environments’, Journal of General Management, Vol. 33, No. 3, pp. 21–30.
5.
BrymanA. and BellE. (2007), Business research methods (2nd edition), New York: Oxford University Press.
6.
BurnJ. J. (2002), ‘Chaos theory and leadership studies: Exploring uncharted seas’, Journal of Leadership and Organization Studies, Vol. 9, No. 2, pp. 42–56.
7.
ChenM.-J.LinH.-C. and MichelJ. G. (2010), ‘Navigating in a hypercompetitive environment: The roles of action aggressiveness and TMT integration’, Strategic Management Journal, Vol. 31, pp. 1410–1430.
8.
DasT. K. and ElangoB. (1995), ‘Managing strategic flexibility: key to effective performance’, Journal of General Management, Vol. 20, No. 3, pp. 60–75.
9.
DohertyN. and DelenerN. (2001), ‘Chaos theory: marketing and management implications’, Journal of Marketing: Theory and Practice, Fall issue, pp. 66–75.
10.
EisenhardtK. (1991), ‘Better stories and better constructs: the case for rigor and comparative logic’, Academy of Management Review, Vol. 16, No. 3, pp. 620–627.
11.
EisenhardtK. and GraebnerM. E. (2007), ‘Theory building from cases: opportunities and challenges’, Academy of Management Journal, Vol. 50, No. 1, pp. 25–32.
12.
EllisJ. (1982), ‘Improving Management Response in Turbulent Times’, Sloan Management Review, Vol. 23, No. 2, pp. 3–11.
13.
FarazmandA. (2003), ‘Chaos and transformation theories: A theoretical analysis with implications for organization theory and public management’, Public Organization Review: A Global Journal, Vol. 3, pp. 339–372.
14.
GhauriP. N. and GronhaugK. (2005), Research Methods in Business Studies: A Practical Guide, Prentice Hall.
15.
GhobadianA.O'ReganN.ThomasH. and LiuJ. (2008), ‘Formal strategic planning, operating environment, size, sector and performance’, Journal of General Management, Vol. 34, No. 2, pp. 1–20.
16.
GulatiR.NohriaN. and WohlgezogenF. (2010), ‘Roaring out of recession’, Harvard Business Review, March, pp. 1–8.
17.
GuoX.VogelD.ZhouZ.ZhangX. and ChenH. (2009), ‘Chaos theory as lens for interpreting blogging’, Journal of Management Information Systems, Vol. 26, No. 1, pp. 101–127.
18.
HermeloF. D. and VassoloR. (2010), ‘Institutional development and hypercompetition in emerging economy’, Strategic Management Journal, Vol. 31, pp. 1457–1473.
19.
KjellmanA.LångströmS. and VestT. (1996), ‘Successful firms through hard times: The 90s depression in Finland’, Journal of General Management, Vol. 22, No. 2, pp. 76–89.
20.
LarsenP.LewisA.BrownR. and TongeR. (2006), ‘Key features in the success of SMEs: a comparison of service and manufacturing’, Journal of General Management, Vol. 31, No. 3, pp. 31–47.
21.
LeavyB. (1999), ‘Organization and competiveness: Towards a new perspective’, Journal of General Management, Vol. 24, No. 3, pp. 33–52.
22.
LevyD. (1994), ‘Chaos theory and strategy: Theory, application, managerial implications’, Strategic Management Journal, Vol. 15, pp. 167–178.
23.
LorenzE. (1963), ‘Deterministic Nonperiodic Flow’, Journal of the Atmospheric Sciences, Vol. 20, pp. 130–141.
24.
MarinoL. D.LohrkeF. T.HillJ. S.WeaverK. M. and TambunanT. (2008), ‘Environmental shocks and SME alliance formation intentions in emerging economy: Evident from the Asia financial crisis in Indonesia’, Entrepreneurship Theory and Practice, Vol. 31, No. 1, pp. 157–183.
25.
MasonR. B. (2006), ‘Coping with complexity and turbulence: an entrepreneurial solution’, Journal of Enterprising Culture, Vol. 14, No. 4, pp. 241–266.
26.
MasonR. B. (2008), ‘Management actions, attitudes to change and perceptions of the external environment: A complexity theory approach’, Journal of General Management, Vol. 34, No. 1, pp. 37–53.
27.
MasonR. B. and StaudeG. (2009), ‘An exploration of marketing tactics for turbulent environments’, Industrial Management & Data Systems, Vol. 109, No. 2, pp. 173–190.
28.
MaguireM. (1999), ‘Chaos theory offers insights into how teams function’, Quality Progress, Vol. 32, No. 6, pp. 41–45.
29.
MilesM. and HubermanA. (1994), Qualitative Data Analysis: An Expanded Sourcebook (2nd edition), Thousand Oaks: Sage Publication.
30.
MorrisM. H. and LewisP. S. (1995), ‘The determinant of entrepreneurial activity: implication for marketing’, European Journal of Marketing, Vol. 29, No. 7, pp. 31–49.
31.
NgW. and KeaseyK. (2010), ‘Growing beyond smallness: How do small, closely controlled firms survive?’, International Small Business Journal, Vol. 28, No. 6, pp. 620–630.
32.
NguyenH. L. and DoN. (2009), ‘Food Retail Competitive Strategy in Recession Economy’, International Journal of Business and Management, Vol. 4, No. 6, pp. 44–50.
33.
NguyenT. V. and RoseJ. (2009), ‘Building Trust-Evidence from Vietnamese Entrepreneurs’, Journal of Business Venturing, Vol. 24, No. 2, pp. 165–182.
34.
Nonaka (1991), ‘The Knowledge-Creating Company’, Harvard Business Review, Spring, pp. 57–73.
35.
Ortegón-MonroyM. C. (2003), ‘Chaos and complexity theory in management: An exploration from a critical systems thinking perspective’, Systems Research and Behavioral Science, Vol. 20, pp. 387–400.
36.
PattonM. (1990), Qualitative Evaluation and Research Methods, Newbury Park, CA: Sage Publications.
37.
PengM. W. (2009), Global Strategy (2nd edition), Mason, OH: South-Western Cengage Learning.
38.
PorterM. E. (1990), The Competitive Advantage of Nations, New York: Free Press.
39.
PryorR. G. L.AmundsonN. E. and BrightJ. E. H. (2008), ‘Probability and possibilities: the strategic counselling implications of the Chaos theory of careers’, The Career Development Quarterly, Vol. 56, No. 4, pp. 309–318.
40.
RaynorM. E. (2008), ‘Strategic options: a new tool for managing in turbulent environments’, Business Strategy Series, Vol. 9, No. 1, pp. 21–29.
41.
ReevesM. and DeimlerM.S. (2009), ‘Strategies for winning in the current and post – recession environment’, Strategy and Leadership, Vol. 37, No. 6, pp. 10–17.
42.
RussellR. and FaulknerB. (2004), ‘Entrepreneurship, Chaos and The Tourism Area Lifecycle’, Annals of Tourism Research, Vol. 31, No. 3, pp. 555–579.
43.
SamliA. C. (2006), ‘Surviving in Chaotic Modern Markets: Strategic Considerations in Turbulent Times’, Journal of Marketing Theory and Practice, Vol. 14, No. 4, pp. 315–322.
44.
SaundersM.LewisP. and ThornhillA. (2007), Research Methods for Business Students (2nd edition), Edinburgh: Pearson Education.
45.
SinghH. and SinghA. (2002), ‘Principles of complexity and chaos theory in project execution: A new approach to management’, Cost Engineering, Vol. 44, No. 12, pp. 23–25.
46.
SmithS. and PaquetteS. (2010), ‘Creativity, Chaos and Knowledge Management’, Business Information Review, Vol. 27, No. 2, pp. 118–123.
47.
SrivannaboonS. (2009), ‘Achieving competitive advantage through the use of project management under the plan-do-check-act concept’, Journal of General Management, Vol. 34, No. 3, pp. 1–20.
48.
StakeR. (2000), ‘Case studies’, in: DenzinN. and Lincoln, Y. (eds.) Handbook of Qualitative Research (2nd edition), pp. 435–454, Thousand Oaks: Sage Publications.
49.
StapletonD.HannaJ. B. and RossJ. R. (2006), ‘Enhancing supply chain solutions with application of chaos theory’, Supply Chain Management, Vol. 11, No. 2, pp. 108–114.
50.
StaverenI. (1999), ‘Chaos theory and institutional economics: Metaphor or model?’, Journal of Economic Issues, Vol. 33, No. 1, pp. 141–168.
51.
SteerL. and SenK. (2010), ‘Formal and Informal Institutions in a Transition Economy: The case of Vietnam’, World Development, Vol. 38, No. 11, pp. 1603–1615.
52.
SullivanD. P. and DanielsJ. D. (2008), ‘Innovation in international business research: a call for multiple paradigms’, Journal of International Business Studies, Vol. 39, No. 6, pp. 1081–1090.
53.
TheodoridisC. and BennisonD. (2009), ‘Complexity theory and retail location strategy’, The International Review of Retail, Distribution and Consumer Research, Vol. 19, No. 4, pp. 389–403.
54.
YinR. (2009), Case Study Research: Design and Methods (4th edition), USA: Sage Publications.
55.
ZhanJ. and LiangG. (2010), ‘Latest Trends in Global FDI flows and Policies: A synthesis of recent research by UNCTAD’, AIB Insights, Vol. 10, No. 4, pp. 3–6.
