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

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, petro-chemical 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.