INSIGHTS ON ORGANIZATIONAL ENVIRONMENT

Part 3: Organizational Environment and Uncertainty

The uncertainty in the company’s environment is a central question in the strategic management literature (Ansoff, 1975), being frequently associated to the turbulence, complexity and increasing pace of change managers must deal in their business contexts (Day, Schoemaker, 2006).

The increasing levels of turbulence, uncertainty and complexity of the organization’s environment are elements that have a deep impact on the scanning and intelligence systems and processes (Duncan, 1972, Ansoff, 1975, 1984, Hedberg et al., 1976; Daft et al., 1988).

The increasing level of turbulence in the competitive landscape of an increasing number of industries is something that has been widely studied in the strategic management literature (D’Aveni, 1994; Treacy, Wieserma, 1995; Day, 1997; Conner, 1998; Eisenhardt, Brown, 1999).

The turbulence in the business environment is attributed to an acceleration of the rate of change and to the sudden attributes associated to many of these changes, becoming more difficult the identification of the causes and the forecast of the consequences (Bower, Christensen, 1995; D’Aveni, 1994).

The search and research focused on an increasing amount of information regarding the business environment of the company have the purpose to reduce the uncertainty level (Porter, 1980, Lesca, 1994). Lesca adverts that a company must be aware of the changes to be able to understand and manage the uncertainty of the environment.

Apart from a natural ambition, the capability to reduce the uncertainty level on the environment through the search and additional identification of information is questionable. In fact, although we have more information and a superior level of knowledge, that doesn’t necessarily guarantee the reduction of the uncertainty level (Choo, Auster, 1993).

What companies can try to make is to incorporate the uncertainty in their processes of detection and analysis of information about their competitive landscape, being able to deal with or confront themselves, for example, with multiple and different interpretations of future changes (Wack, 1985, 1985a; Galbraith, 1974; Daft et al., 1988).