Uncertainty Although the term is used in various ways, specialists define uncertainty as: Uncertainty: The lack of certainty; a state of having limited knowledge where it is impossible to exactly describe the existing state, future outcomes, or more than one possible outcome Measurement of uncertainty: A set of possible states or outcomes where probabilities are assigned to each possible state or outcome, including the relative likelihood of values for variables In the past, strategic plans have often considered only the "official future," which was usually a straight-line graph of current trends carried into the future.
Responding to Uncertainty The primary concern is that organizations need to cope with issues that are too complex to be fully understood, yet significant decisions need to be made that are based on a limited understanding or limited information.
Uncertainty exists where there is more than one possible outcome; it is best managed using scenario planning tools.
Emotion appears to aid the decision-making process: decisions often occurs in the face of uncertainty about whether one's choices will lead to benefit or harm.
Robust decision making (RDM) is a particular set of methods and tools developed over the last decade, primarily by researchers associated with the RAND Corporation, designed to support decision-making and policy analysis under conditions of deep uncertainty.
Uncertainty avoidance: In order to cope with uncertainty about the future, organizations deal with technology, law, and rituals in two ways - rational and non-rational - with rituals being the non-rational.
Uncertainty avoidance is defined as the extent to which members of an organization or society strive to avoid uncertainty by reliance on social norms, rituals, and bureaucratic practices to alleviate the unpredictability of future events.
Uncertainty Avoidance Index (UAI): Tolerance for uncertainty and ambiguity is a critical element of a society's ability to react to certain management styles and situations, providing an important measurement for understanding how much micromanagement may be useful.
Similar to conditions of risk and uncertainty, decision making under time pressure often alters the neurological chemistry and migrates the decision process from a logical perspective to a more intuitive perspective.
They also showed concern that the source of value in the model is structural advantage (creating barriers to entry) and that uncertainty is low, allowing participants in a market to plan for and respond to competitive behavior.