Catastrophe modeling of equity in organizations

Catastrophe theory is a general systems theory for predicting discontinuous change by one of seven elementary topological models. Catastrophe models have been applied to changes involving living and nonliving systems, addressing problems in physics, biology, economics, psychology, and other disciplines. The majority of quantitative successes has occurred with problems involving “hard” data; social modeling, and its inherent data problems, has not been so successful. In this paper principles of signal detection theory are applied to three elementary models in order to develop a butterfly model of equity and productivity in industry. In the model four sources of information (control dimensions) are processed by the subject, with a dependent spectrum of behavior resulting. The model has implications at the individual and organizational levels. The signal detection approach involves a conversion from absolute to normative scaling. At the lowest dimension levels catastrophe and regression-produced surfaces are the same. At higher dimensional levels, discrepancies between the two types of surfaces become evident. The paper explores the assumptions underlying the two systems and the need for translations! methodology. Criticisms addressed to social applications of catastrophe theory by Sussman and Zahler (1978) are also considered, along with criticisms of social science theory in general.