Uncertainty is created in a business due to the external environment. This is when managers and organizations do not have enough information about the environmental factors so they cannot correctly predict its needs and changes. To combat uncertainty businesses can adopt an adapting strategy which has a few sub strategies underneath it like forecasting and planning, a flexible structure, mergers and joint ventures and boundary spanning.
Forecasting and planning
Forecasting is when managers look and try to spot trends so that they can try and predict the future correctly. This will get them prepared for the changes ahead. Businesses can use media intelligence platform to try and understand the trends. This uses data science to examine editorial and public social media content. This uses different types of technology for engagement, monitoring and measurement. This is different form the normal company intelligence because it examines data that is present outside the companies firewall.
Planning is when managers try and reduce the adverse effects that environmental changes can bring. Planning will also help in crisis situations. Many companies like business intelligence companiestake a lot of time and effort into their planning. This is a term that is used to put a variety of software applications into one common category. These software’s analyze the company’s raw data. Companies use this to make better business decisions, to identify new opportunities and to cut cost. Visit this page for further information regarding business intelligence companies.
Mergers and joint ventures
Mergers are when two or more companies join together to become one. A joint venture is a strategic alliance between two or more firms that join together because a project maybe too risky, costly or hard for one firm to handle alone.
A flexible structure is required to adapt to the changing environment. An organic structure is used in a rapidly changing environment. It has the following characteristics:
- It is free flowing
- It encourages teamwork
- It has few rules and regulation
- It has decentralized decision making
A mechanistic structure is used in stable environments. The characteristics of a mechanistic structure are:
- It has rigidly defined tasks
- It has many rules and regulations
- It has less team work
- It has centralized decision making
This is when characteristics of the organization are linked to important elements in the environment. Boundary spanning is used to identify and analyze changes in the environment and it is also used to show that the organization is interested in the environment. People who do boundary spanning are normally in purchasing and marketing. Competitive intelligence and snooping or spying are advances in boundary spanning.