Nature of uncertainties facing firms in their strategic decision making

17 Dec

Uncertainty is an increasingly important factor in strategic analysis. As many researchers and practitioners found out, traditional analytical tools, which try to predict the future, seldom provide sufficient capability to account for the complexity of a highly uncertain environment. As a result, various frameworks incorporating uncertainty into strategic decision-making have emerged. One of the first problems that come up when designing such frameworks is the definition and classification of uncertainty. An interesting approach is provided by Courtney et al. (1997), who view uncertainty as a general condition, which influences all stages of the strategic decision making process, and which can be characterized by levels of intensity. Most factors that have increased uncertainty today are somehow related to technological expansion, globalization and the transition towards a knowledge society.

To make sense of an uncertain business environment, firms can develop a strategic intent, employ Skat-Rordam’s (1999) opportunity approach, use a portfolio of actions as suggested by Courtney et al. (1997), create simple rules, or follow a semicoherent strategic direction described by Brown and Eisenhardt (1998).

Uncertainty is an increasingly important factor in strategic analysis. As many researchers and practitioners found out, traditional analytical tools, which try to predict the future, seldom provide sufficient capability to account for the complexity of a highly uncertain environment. As a result, various frameworks incorporating uncertainty into strategic decision-making have emerged. One of the first problems that come up when designing such frameworks is the definition and classification of uncertainty. An interesting approach is provided by Courtney et al. (1997), who view uncertainty as a general condition, which influences all stages of the strategic decision making process, and which can be characterized by levels of intensity. Most factors that have increased uncertainty today are somehow related to technological expansion, globalization and the transition towards a knowledge society.

To make sense of an uncertain business environment, firms can develop a strategic intent, employ Skat-Rordam’s (1999) opportunity approach, use a portfolio of actions as suggested by Courtney et al. (1997), create simple rules, or follow a semicoherent strategic direction described by Brown and Eisenhardt (1998).
Title : Nature of uncertainties facing firms in their strategic decision making
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