VUCA-Environment Flashcards
Describe Karl Weick’s idea of “sensemaking” as a core activity of a manager in the 1990s.
Management is seen as a permanent “interpretation service.”
Why is it necessary to constantly use interpretation in management?
Because events, actions, communication and decisions are generally not “self-evident,” neither in the current operative situation nor in their historical and contextual embedding. Interpretation can be through the manager, classification, evaluation or weighting.
What is the phenomenon of a dynamic environment in need of interpretation?
It is called by its acronym “VUCA-environement.”
What does VUCA-[Environment] stand for?
V - Volatility
U - Uncertainty
C - Complexity
A - Ambiguity
Explain ‘Volatility’ (VUCA-).
Ephemeral (lasting a very short time) nature of events caused by acceleration dynamics.
Explain ‘Uncertainty’ (VUCA-).
Frequent and extensive future developments; past does not serve as a ‘benchmark’ for the future
Explain ‘Complexity’ (VUCA-).
Multiple, interdependent causes
Explain ‘Ambiguity’ (VUCA-).
Need for interpretation; little clarity about what is “right” and “wrong”
List 5 ways today’s (Western) concept of a “multi-option society” (aka VUCA-Environment Concept) has impacted management.
- Significant increase of information transparency, volatility of decision parameters and the complexity and pressure to make decisions
- Need for decisions, with simultaneous “de-selection” of alternative options
- The need for accelerated decision-making
- Simultaneity and “unpredictability” of events
- Making decisions on an uncertain “factual basis”; decisions based on great uncertainty
What are the 4 elements of the action model of the “new Sankt Gallen Management Model” in the VUCA world?
- Value creation
- Continuous Assessment of Status Quo
- Approach to environmental complexity
- Consistent exploration of attractive alternatives of value creation