The current business ecosystem is increasingly defined by uncertainty. Given how dynamic and innovative makeup of current workforce, rapidly changing market conditions (particularly for cross-border companies) and, not least, growing adoption of innovative enterprise resource planning (ERP) platforms and applications has made uncertainty a normal component in current business ecosystems. This uncertainty is made more intense by a changing concept of work by which workers are no longer "fixed" to one specific, physical location but are becoming increasingly mobile performing routine and non-routine functions in virtual environments enabled by computer-based platforms and infrastructures. The case for planning under uncertainty can be understood from multiple perspectives. Notably, in an age of globalization, managers are under increasing pressure to predict for future market conditions in order to more effectively strategize for profit margins, market entries, possible national or international expansions, diversification of investment portfolios and, not least, employment strategies for an increasingly diverse workforce. In such volatile, continuously changing market conditions, managers face mounting challenges in order to buffer against potential risks. The variables in an uncertain business context are numerous, if not countless. To better understand planning under uncertainty for contemporary managers, a closer examination is required into what constitutes uncertainty in different business contexts. More specifically, case examples are provided for more concrete understanding of planning under uncertainty. This paper aims, hence, to explore uncertainty conditions contemporary managers experience in order to plan for different business functions.
In uncertain market conditions, planning for a new product is particular an unknowable, if not a risky, enterprise. Performing market research into order to better understand customer needs is, if anything, an in-progress effort as variables continue to emerge – and, for that matter, change – as market conditions fluctuate. This uncertainty becomes more acute in case of innovative products and/or services. More specifically, by developing a concept, feature or functionality for a new product and/or service, a manager planning product launch or market entry, can resort to six innovative strategies: process, speed, learning, market, technology, and quantitative (Lynn & Akgün, 2015). The process strategy addresses gradual development in product / service features and/or market entry emerging, more stable conditions; speed strategy addresses rapidness in meeting a service / product / market need before competition; learning strategy addresses a company's ability to develop deeper understanding of customer usability habits, market strategy addresses macro market conditions for more effective prediction of future patters; technology strategy focuses on innovations introduced into a product and/or service for more successful market penetration; and quantitative strategy addresses cumulative market patterns emerging from market research. For most innovative products and/or services, learning strategy is shown to be most effective (Lynn & Akgün).
The case for planning under uncertainty for innovative products and/or services cannot be overemphasized. Indeed, almost each and every new smartphone set introduced into an existing or new market has witnessed – and continue to witness – uncertainty. The classic examples of Apple's iPod and iPhone are a case in point.
In planning for iPod and iPhone market entries, Apple's managers were under mounting pressures in figuring out, correctly, how such extremely innovative products can be introduced successfully in different markets, first, in US and, later, globally. The established Nokia and Motorola mobile companies had set global patterns ahead for mobile devices (and less for mobile applications). To capture market shares from established players was, if anything, an uphill task. To lead was another story. The subsequent Apple success was, indeed, a dutiful adoption of learning strategy for innovative products and/or services referred to above. More specifically, by accumulating knowledge of consumer usability habits (and, not least, main competition's strategic missteps, notably underdevelopment of mobile operating system, particularly for Nokia), Apple did not only manage to buffer against unpredictabilities in market conditions but to better plan for more successful introductions of next editions of iPhone and iPad's introduction.
The major learning lessons in Apple successful implementation of planning strategies in uncertain conditions are not limited to specifics of planning strategies Apple adopts, important as are, but reaches far beyond to learning capabilities Apple has managed to develop over years. Notably, by designing products and services around consumer feedback and shifting requirements, Apple has managed develop successfully a flexible planning strategy responsive to customer needs. Compared to Nokia and Motorola (long satisfied in conventional planning strategies inadequately responsive to consumer continuously changing needs), Apple has continued to invest in her planning strategies informed by changing usability patterns but also, for Apple's credit, leading market patterns by setting precedents for market leadership – another strategy adopted by most entrepreneurial companies.
The entrepreneurial character of companies is becoming an increasingly important requirement for managers performing extensive planning functions under uncertain conditions. There are, in fact, a broad range of business functions involving planning. If anything, no business function can be said to be so unless involving partial or full planning activities. There are, however, some business functions requiring more planning compared to others, particularly under uncertain conditions.
Marketing, particularly across product / service categories and/or market segmentations, is a complex business function requiring extensive planning, particularly int6ernatioanlly. For current purposes, an innovative, entrepreneurial approach in planning marketing activities remains critical for more successful prediction of market conditions. In adopting an entrepreneurial approach to planning marketing activities, managers differ based on implemented strategies. More specifically, business executives of differential entrepreneurial expertise are shown to adopt predictive or non-predictive logic strategies in planning marketing activities (Read et al., 2009). By "predictive" strategies are meant planning strategies based on hypothetical market conditions and by "non-predictive logic" strategies are meant planning strategies partially based on actual market conditions used to construct new markets of identifiable stakeholders (Read et al.). Put differently, if managers of little entrepreneurial expertise rely on predictive models for planning marketing activities under uncertain conditions, managers of more entrepreneurial expertise rely on informed decisions made for similar market conditions in order to construct new market conditions as close as possible to actual market conditions over extended periods and/or geographies. This difference in entrepreneurial expertise is insightful in different ways.
Being informed by actual, uncertain market conditions, more entrepreneurial managers are better able to predict more accurately uncertain market conditions for a current or future state of affairs. Second, by building more customized prediction models in order to plan marketing activities, more entrepreneurial managers are better positioned to adapt to uncertain, changing market conditions compared to less entrepreneurial managers who, relying primarily on preset perdition models are often at loss to accommodate perennially changing variables. Third, entrepreneurship per se has come to be an increasingly required skill for managers in current business ecosystem. More specifically, entrepreneurship, honed by active learning and experiences, enable managers to make complex decisions under highly uncertain conditions. If anything, entrepreneurship should be promoted as a critical managerial skill in current business ecosystem employed for more adaptive planning, particularly during uncertain market conditions, or more so, during extreme crises.
In one final example, encryption merges as one game-changing – and, for that matter, completely unpredictable – variable for mobility companies, including Apple (Rosenbush, 2016). Indeed, if encryption and privacy have long been issues mobility giants accounted for, current controversy over breaking one phone's code in order to uncover more details, if any, of San Bernardino terrorist attacks (Rosenbush) represents an ideal example of a non-business variable which, emerging unpredictably, managers need to address. This example highlights, moreover, increasingly complexities in current business ecosystem.
References
Lynn, G. S., & Akgün, A. E. (2015). Innovation Strategies Under Uncertainty: A Contingency Approach for New Product Development. Engineering Management Journal, 10(3), 11-18. Taylor & Francis Online. doi: 10.1080/10429247.1998.11414991
Rosenbush, S. (2016, February 23). The Morning Download: Apple Aside, Strong Encryption Is Here to Stay. The Wall Street Journal. Retrieved from http://www.wsj.com/
