Using integrated solutions as market-shaping/market-driving strategy in oil industry Part 3
Using integrated solutions as market-shaping/market-driving strategy in oil industry
Part 3
استفاده از "راه حل یکپارچه" به عنوان استراتژی شکل دهنده بازار و هدایت کننده بازار در صنعت نفت
بخش سوم
این پژوهش به عنوان تز پایانی دوره MBA در یکی از دانشگاه های مطرح اروپایی ارایه شده است
Recognizing the Role of Uncertainty
Instead of hunt for definite success recipes, managers shall change their view about the environment of their strategic decisions. One of the first steps is to understand the uncertainty and its central role in the business world (Rozenzweig, 2007). To discuss this issue first the definition of uncertainty should be elaborated then the sources of uncertainty in business world will be introduced.
Definition of uncertainty: There is a rich body of publications in definition for uncertainty in different fields. However, to narrow down those to scope of this report the definitions relevant to opportunity and decision making are considered which are connected to the subject of strategy directly. Knight (1921) in his search for the examination of profit, presents a thorough review of uncertainty, its distinction with risk and its bearing on economic process. He has two different ideas of uncertainty; the first is found on possibility of an outcome, the second is about individuals’ subjective expectation about future (Brooke, 2010). The reason for uncertainty in circumstances is that due to lack of knowledge, the meaningful attribution of a probability function to results is impossible (Helmer, 2003). There is a difference between risk and uncertainty, the distribution of probabilities outlines the amount of risk. However, if the probabilities are not known, the expression “true uncertainty” is applicable (van Gelderen et al, 2000).
Sources of uncertainty: Uncertainty can arise from four different types of sources listed here in order of importance: demand structure, supply structure, competitors and externalities (Wernerfelt & Karnani, 1987). Lack of perfect causality, customers and competitors and their unclear behaviours, technological change and ambiguity about internal capabilities of organization are mentioned as some of the sources of uncertainty (Rozenzweig, 2007). Read (2009) specifies that market fragmentation, competitive pressures and new customer tastes are drivers of the trend toward market volatility. The origins of uncertainty can be categorized as industry level, the firm level, and the personal level which are all form of information or knowledge uncertainty (Miller, 1992). Knowledge uncertainty, developments in technology, consumer preferences, and behavior of competitors, human’s limited processing ability, competitors, unfaithful customers, unreliable suppliers, lack of finance, opportunistic employees are all sources of uncertainty (van Gelderen et al, 2000) (Helmer, 2003).
References:
Brooke, G. (2010). UNCERTAINTY, PROFIT AND ENTREPRENEURIAL ACTION: FRANK KNIGHT’S CONTRIBUTION RECONSIDERED. Journal of the History of Economic Though, 221-235.
Helmer, H. (2003). A Lecture on Integrating the Treatment of Uncertainty in Strategy. Journal of Strategic Management Education , 93-114.
Knight, F. (1921). Risk, Uncertainty, and Profit . New York: Harper.
Miller, K. (1992). A Framework for Integrated Risk Management in International Business. Journal of International Business Studies, 311-332.
Rozenzweig, P. (2007, Februery). The halo effect, and other managerial delusions. Retrieved 2011, from The McKinsey Quarterly: http://www.mckinseyquarterly.com/The_halo_effect_and_other_managerial_delusions_1928
van Gelderen et al. (2000). Strategies, uncertainty and performance of small business startups. Zoetermeer: EIM / Business & Policy Research.
Wernerfelt, B., & Karnani, A. (1987). COMPETITIVE STRATEGY UNDER UNCERTAINTY. Strategic Management Journal, 187-1 94.
