Managing uncertainty

Social Science

The concept of uncertainty is something which bothers both academia and business. Uncertainty is the situation of lack of control. In the organizational environment, we can focus on the perceived organizational uncertainty and environmental uncertainty. They may be interrelated. For example, the economic crisis in Russia changed the business environment. A lot of companies started budget cuts and start reduction which affected employees perception of uncertainty. So, environmental uncertainty caused organizational one.

What helps employees to cope?

There is a concept called organizational-based self-esteem. That means an employee values himself as a member of the organization. According to Hui and Lee this type of self-esteem can eliminate the perception of uncertainty. So, if an employee believes in the company and loves, he will perceive that the uncertainty of its future is not so big. The company will survive the crisis and he can contribute to its success.

What kind of top management do you need?

The study of Waldman and colleagues suggests that charismatic leaders perform better in the situation of uncertainty. Probably, their charisma helps to cheer up people around. Employees trust and follow such a leader. During the second world war, such leader as Roosevelt united the nation.

So, if your country or organization faces crisis it increases the level of uncertainty. To keep your employees motivated you need to raise their organization-based self-esteem. A charismatic leader may help with this task, but you need additional instruments. Open communication, transparent information and clear tasks together with team buildings may help to increase the value of the organization for employees. If uncertainty is the lack of control, transparent bonus system and open information may give extra control to people.

Marina Green

Marina Green

Behavioral scientist

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