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Management under uncertainty – the unavoidable risk-taking

Jan-Erik Vahlne (School of Business, Economics and Law University of Gothenburg, Business Administration, Gothenburg, Sweden)
Mattias Hamberg (Department of Business Studies, Uppsala University, Uppsala, Sweden)
Roger Schweizer (School of Business, Economics and Law, University of Gothenburg, Business Administration, Gothenburg, Sweden)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 17 July 2017

Abstract

Purpose

Accentuating the concept of management under uncertainty in the Uppsala internationalization process model, the purpose of this paper is to develop a model for describing how managers act while keeping uncertainty at an acceptable level.

Design/methodology/approach

The authors perform two empirical studies to underpin the model they construct. First, a survey of 309 chief executive officers and chief financial officers in large, publicly listed international firms in the Nordic region on managerial risk perceptions and, second, a case study of Volvo Car Corporation and its endeavors when developing new car models for the Chinese market on a new platform – a process characterized by unprecedented uncertainty.

Findings

The proposed model describing managers’ behavior under uncertainty contains elements such as adjusting/proceeding in small steps, reducing uncertainty via learning, building relationships with important parties in the environment to avoid unforeseen changes and re-dos (i.e. starting all over again) and, perhaps most important, acting despite uncertainty.

Originality/value

The paper highlights a central, though forgotten, concept of the Uppsala internationalization process model, i.e. management under uncertainty, and, thereby, opens a new path for research on how manager behave under the sway of uncertainty.

Keywords

Citation

Vahlne, J.-E., Hamberg, M. and Schweizer, R. (2017), "Management under uncertainty – the unavoidable risk-taking", Multinational Business Review, Vol. 25 No. 2, pp. 91-109. https://doi.org/10.1108/MBR-03-2017-0015

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited