Business Uncertainty
Business uncertainty refers to the lack of predictability or clarity in the business environment, often stemming from factors such as market fluctuations, regulatory changes, or technological advancements. It can impact decision-making, strategic planning, and investment, leading to hesitation and risk aversion among businesses. Managing and mitigating uncertainty is crucial for organizations to adapt and thrive in dynamic markets.
5 Key excerpts on "Business Uncertainty"
eBook - ePub- Owen Hargie, Dennis Tourish, Owen Hargie, Dennis Tourish(Authors)
- 2004(Publication Date)
- Routledge(Publisher)
...Employees who have been recently hired, work in matrix organizations or are involved in major change efforts are prone to be exposed to these factors. Therefore, practitioners have usually been motivated to find ways to either reduce the perceived uncertainty or mitigate the deleterious outcomes. Obviously another major source of uncertainty comes from the external environment. One concern is how uncertainty in the environment impacts employee behaviour, but the vast amount of organizational literature addresses a more macro-level challenge: how should an organization conceptualize and manage an essentially chaotic array of environmental issues, such as changing government regulations, consumer demands and competitive pressures? Theorists, scholars, and consultants have offered a variety of answers to this fundamental question. System theorists use the ‘law of requisite variety’ to argue that the organizational complexity should match environmental complexity (Ashby, 1952; Lawrence and Lorsch, 1967). In fact, Burns and Stalker’s (1961) classic study of twenty English and Scottish organizations indicated that more ‘mechanistic’ organizational structures worked best in stable environments, while more ‘organic’ structures worked best in dynamic environments. Nevertheless, most organizations seek out tools that reduce the perceived uncertainty. Indeed much of the literature discusses powerful analytical techniques, including strategic planning, cost-benefit analysis and the like, which are designed to categorize, quantify, and reify the future (Clampitt and DeKoch, 2001). In recent years, less static and more fluid approaches have emerged that seek to effectively adapt to uncertainty rather than eliminate it. For example, Courtney et al. (1997) identify four levels of uncertainty that organizations can face when forecasting about the future: a clear-enough future, alternate futures, a range of futures, and true ambiguity...
eBook - ePubProject Risks
Actions Around Uncertainty in Urban Planning and Infrastructure Development
- Geneviève Zembri-Mary(Author)
- 2019(Publication Date)
- Wiley-ISTE(Publisher)
...The mistrust that a technical project can generate among the public or elected officials is also likely to be based on fear (such as nuisances, the price of tolls for the household budget, the partial loss of turnover for traders penalized by public works, etc.). 1.2. Globalization and uncertainty Globalization is characterized by a reduction in obstacles to international trade, such as customs duties, transport costs, and the development of means of communication. Companies also tend to develop strategies on an international or even global scale, for the production and marketing of their products or services. It is accompanied by economic reforms (such as competition), an increased role for international economic institutions, changes in the capital structure of companies (which led to a stronger shareholders’ role), or productive strategies in a context of greater competition. However, globalization can create uncertainties for economic activities. Economic growth is characterized, in particular, by an emphasis on the rate of returns on capital and strong competition in the context of internationalization of markets. The inconstancy of financial markets, which are subject to multiple constraints, can become a factor of uncertainty for both companies and employees (Plihon 2002). This context makes the environment less predictable. Rapid irreversible changes can generate instability for the planner, project owner, or construction company. Planning can be conducted in the context of rapid socio-economic changes in cities...
eBook - ePubBuilding Effective Value Chains
Value and its Management
- Tom McGuffog(Author)
- 2016(Publication Date)
- Kogan Page(Publisher)
...Some individuals are happy to take particular decisions so long as the opportunities appear to outweigh the risks by a good margin, and especially if it is someone else’s money they are risking. To most people who take decisions, uncertainty means being unsure of what is going to happen. It is also being unsure of what decision then to take and of the likely outcome. Uncertainty consists of two components – the opportunity to benefit (a positive) and the risk of loss (a negative), allied to how an individual or organization values these in relative terms. Too many people believe that contracts can be written which ‘transfer risk’ (and management responsibility) from the customer to the supplier. In reality, for risks to be mitigated effectively they must be defined, understood, owned and managed by the customer. The supplier can only agree to accept defined and limited material, financial and legal consequences if specific risks materialize. The supplier can always walk away (eg by refusing to proceed, by going bankrupt, by demanding more money) from a contract, and the customer is then left bereft of their objectives if they have not otherwise been able to mitigate their risks. Even an insurance policy only ‘assigns’ certain financial consequences to the insurance company, while it is you who are dead, injured or without your home, prized possessions or business. Therefore you must always try to define and understand your risks as well as your opportunities, and to own and manage them effectively. The consequences of failing to understand uncertainty and to define, own and manage risks can be seen in many arenas. Thus, financial markets develop ever more sophisticated portfolios and computer models which regularly serve to deceive the unwary who do not fully understand the risks lurking within the sophistication...
eBook - ePubBusiness Analysis and Leadership
Influencing Change
- Penny Pullan, James Archer, Penny Pullan, James Archer(Authors)
- 2013(Publication Date)
- Kogan Page(Publisher)
...15 Dealing with uncertainty RUTH MURRAY-WEBSTER AND PENNY PULLAN What do we mean by uncertainty, and what is risk? Shouldn’t a business analyst leave risk management to the project manager? What is the risk management process, and what do we need to consider at each stage? How do we deal with the fact that individuals perceive risk so differently? What is risk facilitation, why is it necessary and why does this role fit many business analysts so well? This chapter addresses these and other questions about how business analysts can best deal with the inevitable uncertainty that comes with change. What do we mean by uncertainty? People who want to provide leadership for change need to be able to deal with uncertainty. While almost everything to do with change is uncertain, not all of this matters. For example, it is unlikely to make a difference to most projects if the sun is shining or there will be grey, cloudy skies tomorrow. Only some aspects of uncertainty matter, those that might affect our objectives, and we call these risks. From now on, we will focus on these using the definition that ‘Risks are uncertainties that matter’ (Hillson and Murray-Webster, 2007). People often confuse issues with risks. Issues are problems that are happening now, with no uncertainty about them at all. These need to be managed, of course, but they need to be dealt with separately from risks; otherwise the current issues are likely to overshadow future risks. While risk in the English language has rather negative connotations, uncertainty that matters could work both ways, positively as well as negatively. It’s important that we are aware of positive opportunities as well as negative threats. The process for risk management applies to both, and it’s important to make the most of positive risks...
eBook - ePubThe Rules of Project Risk Management
Implementation Guidelines for Major Projects
- Robert Chapman(Author)
- 2019(Publication Date)
- Routledge(Publisher)
...3 Environment ☑ The uncertainty characteristics of a project are the product of their origin and particularly their context Humanity has become remarkably adept at understanding how to mitigate countless conventional risks that can be relatively easily isolated and managed with standard risk management approaches. But we are much less competent when it comes to dealing with complex risks in systems characterized by feedback loops, tipping points and opaque cause-and-effect relationships that can make intervention problematic. World Economic Forum (2018) Global Risks, Thirteenth Edition, Insight Report Projects are not created in a protective cocoon but in the wider context of their setting, which is referred to as their environment. “Environment” is the term used to describe a project’s complete context, not just its natural environment. Projects implemented by private organisations are undertaken to achieve mid to long-range goals to improve bottom-line performance. Projects undertaken in the public sector are typically undertaken to achieve socio-economic benefits. Whether a project achieves those goals will in part, as the title of this rule suggests, be dependent on its context. While it is uncommon for the aspects of a project’s environment to change during the preparation of the business case, it is highly probable these aspects will be exposed to change during execution, given that the execution of a project can span one or more years. Threats and opportunities emanating from the environment may threaten or support a project’s objectives and in turn reduce or enhance its business case. Organisational managers must take decisions in an uncertain environment, and risk management as a discipline explicitly takes account of uncertainty and establishes how it can be addressed...
