Recent years have had a distinctive progressive pace of development, and with such rates of creating innovations, environmental issues have been on the rise. Along with the rapid decrease in ecology quality, many regulations and policies for its preservation are created, which directly affect business enterprises. Therefore, an ability to quickly react to the uprising environmental issues and the potential to solve them with benefits for the company has become a driving factor in the success of corporations.
Managers are one of the primary people in enterprises who become affected by environmental uncertainty, as they must be fast to respond to the issues, create new regulations and adjust to current events in no time. When talking about uncertainty, it is hard to collect sufficient information and plan strategies that are undoubtedly effective; therefore, managers face significant challenges while future planning is connected with environmental needs and changes.
Each corporation chooses how to handle the uncertain environment individually, while some prefer to ignore this notion and lead the companies to destructive consequences. Avoiding uncertainty on the stage of strategic planning may lead to ineffective methods that are not threat resistant, which could deprive the enterprise of future success and increased profits. On the contrary, managers who focus on the world uncertainty in the process of strategic planning too much may be prone to overdo the analysis, which can result in instinctive decisions only in the future. Therefore, managers need to be able to identify the level of uncertainty and adequately plan the forthcoming strategy. Since the managers’ perceptions are the basis of their strategic choice, the results that companies obtain are primarily dependent on the managers’ perceptions.
Companies’ success is assuredly dependent on managers’ perceptions of strategic planning, as they are responsible for future development, therefore, avoiding environmental uncertainty can lead to the fail of every campaign. To accurately predict environmental needs and changes, certain strategies are implemented to minimize the possible crisis. Budget planning that foresees forecasting generally forces managers to cover the uncertain environmental issues in the cash flows without adequately dealing with them. Similar strategies only depict how managers underestimate the essential factor of planning for uncertainty only for the sake of an operative business strategy.
One of the strategies focuses on planning for multiple outcomes, as it is essential to always have a backup plan in case the planned strategy does not show the desired effect. In such a situation, rather than putting all efforts into one possible result, it is vital to predicting alternative outcomes. With this approach, the company has forecasted all possible consequences, and in case of a failed primary strategy, managers would know how to properly react.
Using analytical tools that do not require high accuracy can be of significant aid while planning strategies around an uncertain environment. The simpler the statistical model is, the more reliable it can be in case of situations with a highly complicated nature. A peculiarity with sophisticated database models is that they are usually not accurate in predicting the future as they require many variables to compel proper data. Therefore, a basic planning model may not be as detailed in the case of numbers; however, it is highly effective in predicting multiple outcomes, which is extremely important for uncertainty concept planning.
Shell company is an excellent example of sustainable planning in terms of an uncertain environment. To navigate the uncertain future, Shell has been using its strategy of developing multiple scenarios for over 50 years. The corporation thoroughly analyses the market and creates valid possible depictions of their future on the oil business landscape. With critical planning in times of uncertainty and challenges, the company turns to such scenarios that as the result, aid to make life-changing choices, which also benefit Shell.
For years Shell company has been putting such scenarios to action, which often result in successful sustainable programs that benefit countries in the long perspective. In recent projects, Shell implemented various ecological initiatives in many places. For instance, in Germany, Shell contributed to the development of roadmaps to create sustainable, safe, and secure energy systems to fight climate change. Shell corporation collaborated with a local German company to develop strategies that support sustainable energy and designed them in a way that benefits both society and the government. These energy pathways help the country to explore new methods of sustainable energy, secure and free companies from any future uncertainties.
According to Shell, a top management scenario planning strategy for an uncertain environment comes with its package of benefits. Firstly, stress testing existing strategies is an excellent method that helps avoid future crises as the corporation has already played out most of the outcomes – good or bad. Secondly, acknowledging the uncertain environment into forthcoming strategies opens new boundaries for opportunities and growth options. Considering unexpected fallouts may be a catalyst to bettering already existing strategies or be a muse to creating new ones.
Concluding, rapid change in the world puts companies in the position of environmental uncertainty. The uncertainty plays a role of success determinant for the enterprises as it shows the level of preparation for crises. Managers are the main people responsible for forecasting and planning the company’s future; therefore, their strategic planning perception is a determinant in the success of a business. To handle the uncertainty, companies resort to many strategies that help them be prepared for unexpected events. Shell is one of the prominent examples of strategic planning for the uncertain environment, which effectively uses its methods to the company’s benefit.