Environmental Uncertainty as a Contingent Factor of Business Strategy Choice Decision: Introducing an Alternative Measurement of Uncertainty

Arieftiara, Dianwicaksih; Utama, Sidharta; Wardhani, Ratna

doi:10.14453/aabfj.v11i4.9

Cited by 19 publications

(47 citation statements)

References 30 publications

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“…Some scholars have conceived uncertainty as the objective dimension of the external environment, while others have viewed uncertainty as the interpretation of the perceptual process that helps decision-makers in conceptualizing the environment (Milliken 1987a, b). Arieftiara et al (2017), Duncan (1972), and Lawrence and Lorsch (1967) presented some important measures of uncertainty, which the present study builds upon. Lawrence and Lorsch (1967) identified the uncertainty variables associated with departments, such as research, manufacturing, and marketing, and assessed the degree of uncertainty within the three different organization subsystems.…”

Section: Review Of the Literaturementioning

confidence: 98%

“…Extant studies have found that organizational design is often influenced by the uncertainties that prevail in the business environment (Latan et al 2018;Lawrence and Lorsch 1967). Past studies (e.g., Arieftiara et al 2017;Dill 1958;Duncan 1972;Lawrence and Lorsch 1967;Singh 2020) have attempted to gauge the "objective", as well as, the "perceived" environmental uncertainty, and to examine the relationship between these "objective" and perceptual measures. Attempts to measure the "effect" of such environmental uncertainty on the strategy formation within an organization is not so frequent, with Venkataramanaiah and Kumar's (2011) and Arieftiara et al (2017) review papers presenting contemporary reviews on the subject.…”

Section: Review Of the Literaturementioning

confidence: 99%

“…Kundu (2014) developed a liner programming model to estimate the effect of design parameters namely, uncertainty reduction, differentiation and integration, on the performance of organizations. Arieftiara et al (2017) examined environmental uncertainty and developed an environmental uncertainty index (EUI) for Indonesia. Using a sample of manufacturing companies listed on the Indonesia stock exchange (IDX) for the period from 2009 to 2012, and a multinomial logistic regression, Arieftiara et al (2017) found that the likelihood of an organization pursuing a prospector strategy is greater than an analyzer strategy.…”

Section: Review Of the Literaturementioning

confidence: 99%

“…Studies on environmental uncertainty reached the epitome of acceptability in the 1970s and has since fallen off noticeably (Arieftiara et al 2017;Milliken 1987a, b;Venkataramanaiah and Kumar 2011). It is suggested that one of the reasons for this decline in interest is that the outcomes of the studies were not easily implementable (Milliken 1987a, b), and they do not provide an objective measure of the uncertainty (Arieftiara et al 2017).…”

Section: Review Of the Literaturementioning

confidence: 99%

“…The networking behavior of executives also needs to be tailored to the environmental uncertainty to achieve higher performance (Srivastava et al 2018). Arieftiara et al (2017) emphasized upon the need to develop an environmental uncertainty index since business systems are subsystems of the overall business environment.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

The effect of uncertainty on the formulation of strategies: a study of selected Indian organizations

2020

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An organization's performance is often claimed to be associated with the business environment, as well as with the organization's strategic response to such an environment. If the environment of an organization is adverse, it may face challenges in getting its required inputs, and in adding value to the society. The objective of the present study is to propose a measure of uncertainty based on a survey of executives from randomly selected companies and present several implications for practice and theory. The present research follows a multi-stage sampling process. In the first stage, a complete list of sectors was taken from CMIE, and four sectors were randomly selected (simple random sampling) from the list. The selected sectors are as follows: chemical, petrochemical industry, agricultural-related industry, and food processing industry. The second stage was also a simple random sampling process. The third stage was a sort of convenience sampling since the top management of the selected organizations proposed the names of the executives to be surveyed. A firm's performance seems to be associated to the business environment, as well as, the organization's strategic response to such an environment. There exists a dynamic relationship between a firm and its business environment. Several limitations and future courses of studies are also presented.

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Section: Review Of the Literaturementioning

confidence: 98%

Section: Review Of the Literaturementioning

confidence: 99%

Section: Review Of the Literaturementioning

confidence: 99%

Section: Review Of the Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The effect of uncertainty on the formulation of strategies: a study of selected Indian organizations

2020

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Environmental uncertainty and digital technologies corporate in shaping corporate green behavior and tax avoidance

Ao,

Ong,

Aprile

et al. 2023

Sci Rep

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This study contributes to the field of sustainability by analyzing changes in firms following the adoption of new environmental protection laws to meet community sustainability needs. Focusing on the Chinese context, it examined the relationship between firms' environmental protection measures (i.e., corporate green behavior) and profitability (i.e., corporate tax avoidance). The moderating roles of environmental uncertainty and digital technology application in this relationship were also investigated. The findings offer insights into the complex dynamics linking firms’ environmental initiatives to their business outcomes and financial decisions within the framework of a sustainable community. Ultimately, this study highlights the importance and implications of sustainable practices for both the environment and corporate financial performance. Firms’ environmental behaviors are enablers of sustainable communities by deploying natural resources and creating a more resilient economy through active community participation in green production models.

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The impact of market uncertainty on international SME performance

Sharfaei

Ong

Ojo

2023

Cogent Business & Management

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Environmental Uncertainty as a Contingent Factor of Business Strategy Choice Decision: Introducing an Alternative Measurement of Uncertainty

Cited by 19 publications

References 30 publications

The effect of uncertainty on the formulation of strategies: a study of selected Indian organizations

The effect of uncertainty on the formulation of strategies: a study of selected Indian organizations

Environmental uncertainty and digital technologies corporate in shaping corporate green behavior and tax avoidance

The impact of market uncertainty on international SME performance

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