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Note
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Reference no. 9-391-192
Published by: Harvard Business Publishing
Originally published in: 1991
Version: 9 April 1993
Length: 12 pages

Abstract

Managers often ignore uncertainty and plan as if the world were certain. Frequently, strategy is formulated based on an extrapolation of current trends into the future, or the best guess scenario of the manager involved. This note discusses four approaches to shaping the firm''s response to uncertainty. The first half discusses using scenario analysis to better understand how the future may evolve. The second half discusses how to use this understanding in formulating a strategic response to uncertainty. Discusses bets, "robust" choices, choices of timing, and "changing the rules."

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Abstract

Managers often ignore uncertainty and plan as if the world were certain. Frequently, strategy is formulated based on an extrapolation of current trends into the future, or the best guess scenario of the manager involved. This note discusses four approaches to shaping the firm''s response to uncertainty. The first half discusses using scenario analysis to better understand how the future may evolve. The second half discusses how to use this understanding in formulating a strategic response to uncertainty. Discusses bets, "robust" choices, choices of timing, and "changing the rules."

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