Uncertainty in Strategy Research

Strategic decision-making invariably involves making inferences about the future, a future that cannot be fully known. While all decisions carry risk, uncertainty arises from the inability to assign probability estimates to future events and is thus a key concept within strategy. Yet, strategy scholars sometimes use the concept of uncertainty in ways that obscure, rather than clarify, what they mean. Indeed, constructs such as risk, uncertainty, volatility, complexity, ambiguity, and dynamism are often used interchangeably and without clarification of concept. In this article, we aim to provide the reader with a clarifying overview of the classical work on uncertainty in strategy research and give examples of the more recent evolution of the concept. A particular emphasis is on the relationship between uncertainty and complementary constructs. We illustrate some of the strategy perspectives that surround both objective and subjective uncertainty and end our overview by commenting on new sources of uncertainty.