Definition of uncertainty
Doubt; the condition of being uncertain or without conviction.
Examples of uncertainty in the following topics:
- The managerial landscape is often defined by situations of risk and uncertainty.
- Uncertainty has a fairly linear effect on decision making in that it delays it.
- When confronted with uncertainty, managers will attempt to put off decisions until uncertain circumstances become more certain.
- Uncertainty is a probabilistic state where multiple outcomes are possible yet unknown.
- Risk is a state of uncertainty whereby possible outcomes involve losses of varying degrees depending on the actual outcome.
- Conditions of risk and uncertainty frame most decisions rendered by management.
- 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.
- Complexity theory is one such perspective, which postulates that organizations must adapt to uncertainty in their environments.
- Alternatively, in a mature market with limited variability and uncertainty, a fixed and specific approach at organizational design will capture more value.
- Considerations of the external environment—including uncertainty, competition, and resources—are key in determining organizational design.
- 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 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.
- 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.
- 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.
- As there is always an element of uncertainty about the future, strategy is more about determining and prioritizing a set of options ("strategic choices") rather than about crafting a fixed plan.