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Über dieses Buch

This book examines volatility, uncertainty, complexity and ambiguity (VUCA) and addresses the need for broader knowledge and application of new concepts and frameworks to deal with unpredictable and rapid changing situations. The premises of VUCA can shape all aspects of an organization. To cover all areas, the book is divided into six sections. Section 1 acts as an introduction to VUCA and complexity. It reviews ways to manage complexity, while providing examples for tools and approaches that can be applied. The main focus of Section 2 is on leadership, strategy and planning. The chapters in this section create new approaches to handle VUCA environments pertaining to these areas including using the Tetralemma logics, tools from systemic structural constellation (SySt) approach of psychotherapy and organizational development, to provide new ideas for the management of large strategic programs in organizations. Section 3 considers how marketing and sales are affected by VUCA, from social media’s influence to customer value management. Operations and cost management are highlighted in Section 4. This section covers VUCA challenges within global supply chains and decision-oriented controlling. In Section 5 organizational structure and process management are showcased, while Section 6 is dedicated to addressing the effects of VUCA in IT, technology and data management. The VUCA forces present businesses with the need to move from linear modes of thought to problem solving with synthetic and simultaneous thinking. This book should help to provide some starting points and ideas to deal with the next era. It should not be understood as the end of the road, but as the beginning of a journey exploring and developing new concepts for a new way of management.



ERRATUM TO: Environmental Justice in a VUCA World

Without Abstract
Terry Beckman, Maggie Matear, Anshuman Khare

The Phenomenon of VUCA and Complexity


Chapter 1. Perspectives on a VUCA World

The world has changed: Since the financial crisis, there has been an increased awareness about the globally interconnected world of business; its complexity and sustainability. Some would believe that its unpredictable and situations change rapidly which is resulting in the obsolescence of existing models to deal with complexity and uncertainty. Some call the situation today a “VUCA” environment (Volatility, Uncertainty, Complexity, Ambiguity) (http://​knowledgenetwork​.​thunderbird.​edu/​research/​2012/​07/​09/​kinsinger-walch-vuca/​).
The mainstream of applied management tools and frameworks is still unchanged: While the business environment is rapidly undergoing a change, the business tools and frameworks are lagging behind.
Need for broader knowledge and application new concepts and frameworks: This book attempts to bring together and discuss concepts, tools and frameworks for management to cope with the new situation. The book will be of use to academics, practitioners and those who are just starting to engage with the business world.
Oliver Mack, Anshuman Khare

Chapter 2. Simply More Complex: A SySt® Approach to VUCA

Volatility, Uncertainty, Complexity and Ambiguity (VUCA): People cannot reduce the environment’s ‘degree’ of VUCA, but a company’s capability to deal with it can increase. One of the most promising methods for doing this includes expanding the capability to oscillate. Oscillation increases the complexity within the company itself since it creates variable options for management to take action and respond. A general frame for such oscillations is given by the “SySt-Tetralemma”. With some practice in exploring the Tetralemma, you can find a way out of most dilemmas and generate useful developments from most problems. Sometimes VUCA leads to paradox situations where the impossible must be made possible, i.e., from the point of view of the SySt-Tetralemma, the ability to open the limits of the system from within is required.
Elisabeth Ferrari, Insa Sparrer, Matthias Varga von Kibed

Leadership, Strategy and Planning


Chapter 3. Program Management in VUCA Environments: Theoretical and Pragmatical Thoughts on a Systemic Management of Projects and Programs

In organizations dealing with complex and volatile environments, projects and programs are an important tool to structure and manage complex tasks within the organization. Especially when it comes to the need for continuous change to adapt to VUCA environments or to reach a competitive advantage, strategic programs are used by top management in large companies to structure and implement strategic priorities. While traditional approaches on program management focus mainly on technical tools, this article broadens the perspective to a more systemic view of program and project management. We disuses the SySt system principles as well as the Triangle of Belief Polarities (TBP) as two concepts that could help project and program managers as well as top managers to deal with projects and programs in VUCA situations.
Oliver Mack, Michael Jungen

Chapter 4. Keeping the Flow: Creating Opportunities Based on Well Structured Collaboration

As against most common views, complexity is nothing new. We’ve simply just started to realise. Therefore, we have to find ways of dealing with a complex environment and its ambiguous, uncertain face. Due to an enormous explosion of knowledge in almost every field of our lives we can see that well-known recipes and rules for success do not work anymore. Trying harder makes it even worse, since the rules of the game have changed. Even more so: the game is a different one. Knowledge creating uniqueness becomes the key for competitive advantages, resilience and sustainable vitality more and more (The new edge in knowledge. How knowledge management is changing the way we do business. Wiley, Hoboken, 2011). Therefore, organisations have to take an active role in shaping their own position continuously taking advantage of creating such knowledge. Based on a new collaborative approach, the authors describe a well-structured mix of methods and instruments introducing “Cooperative Management-Systems”, the “CS-Procedure” and the “Heartbeat-Model”. This way, a complex and ambiguous environment is not just a threat to organisations but a playground for opportunities.
Patrick Halek, Günter Strobl

Chapter 5. Risk Management in a VUCA World: Practical Guidelines Based on the Example of a Multinational Retail Group

Regardless of the legal necessity, increasingly more companies are coming to recognise the massive need to implement a holistic risk management system. This is especially true of retail groups operating multinationally, which are being exposed to an increasingly complex and dynamic VUCA world. By adequately implementing a risk management system, risks can be overcome despite this increased uncertainty and volatility. Assistance in implementing a risk management process commensurate to the requirements of a VUCA world is provided in the form of practical guidelines. At the same time, the process must be designed quickly and easily in order to maintain its power to act in the face of greatly reduced reaction times and increased complexity. With regard to organisational integration, different alternatives are compared and recommendations for practical actions to be taken are suggested. Risk management must be supported by an IT tool that specifically allows for cross-border utilisation by multinational companies. Its interfaces need to pass on meaningful reports that present a company’s overall risk situation in a manner that reduces complexity. This promotes immediate countermeasures in a dynamic and volatile business environment. Ultimately, it is the function of risk management to ensure the company’s long-term success despite the growing challenges of a VUCA world.
Thorsten Kuznik

Marketing and Communication


Chapter 6. Measures to Understand and Control Customer Relationship and Loyalty

Rapidly changing market conditions and intensifying competition may also have a negative impact on the customer relationship in terms of a more volatile and less loyal customer behavior. Therefore, a detailed analysis of the current status of the customer relationship is required.
Firstly, a framework to structure different perspectives to understand the relationship between a company and its customers is presented. In addition to the process of delivering the right benefits or value to the customers (“value creation”) managers are increasingly challenged to prove that the measures they take generate a significant Return on Invest. From a financial perspective the customer benefits have to be capitalized into corporate value (“value appropriation”).
Secondly, a segmentation approach is shown, which integrates the key measures of customer relationship management: (a) Value generation from the customer perspective (“value to the customer”) and (b) value generation from the company’s perspective (“value of the customer”). To determine the value to the customer a deep understanding of the needs and preferences of the customers is required. In a further step the key drivers for the purchase decision have to be identified. The measurement of the value of the customer incorporates all relevant information concerning the revenue stream and specific costs of a single customer.
Thirdly, by segmenting customers based on both perceived value and profitability it is explored whether and for which segments the process of value creation can be deployed in the marketplace (“value appropriation”). The practical application of the “Value-to-Value”-segmentation (V2V) approach is illustrated by project examples covering both, B2B as well as B2C markets. Here, the consequences of a higher complexity and uncertainty as well as measures to stabilize the customer loyalty and revenue streams are discussed.
Thomas Burgartz, Andreas Krämer

Chapter 7. Pricing in a VUCA World: How to Optimize Prices, if the Economic, Social and Legal Framework Changes Rapidly

Typically, three parameters (cost, competitors and customers) are seen as pivotal, when determining the optimal price for a product. While a focus on the cost of production leads to a cost-plus pricing and a focus on competition leads to a price matching, a value-based pricing is derived from the customer perspective.
In a world characterized by uncertainties and rapid structural changes, these landmarks only have a limited value. It is an illusion and rather naïve to assume the maximum willingness to pay for individual decision makers is robust and remains unchanged over a long period of time. In addition, modern IT-systems allow a fast reaction of the competition on individual pricing-decisions taken by a company. Against this background, the author recommends, when deriving the value-based pricing from the customer perspective, to use an extended holistic approach. This “pricing-in-3-D” approach takes into account different decision criteria: (1) the customers’ willingness to pay for the product or service, (2) psychological factors influencing the customer decision and (3) impact of price decisions on the long-term customer relationship.
Andreas Krämer

Chapter 8. Internal Corporate Communication in a VUCA Environment

Each change at the company is an intervention into a living system. Although companies oftentimes have complex structures, the communication during changes has the goal of disseminating the messages as personally and directly as possible. In addition to the consistency and authenticity of the messages, continuity is an important core component for successful communication during changes—that the management level sticks to its core messages during its regular communication and likewise demonstrates this. One can thus reduce the influence of uncertainty among the employees. Despite the preparatory work for communications planning, one must make reference to the influences and adjust the plan situationally. For the selection of the communication channels and media, one must ensure that the possibility exists for an answer channel.
Gerald A. Hollaus

Operations and Cost Management


Chapter 9. Addressing Volatility, Uncertainty, Complexity & Ambiguity (VUCA) Through Insourcing and Backshoring

The complexity of the global supply chain operations has not been more apparent than during the financial crisis of recent times. It led to raised awareness about the vulnerability of the complex operations that span over a number of continents. Trends in business indicate that there is a movement to restrain and even reverse outsourcing and backshoring to check volatility, uncertainty, complexity and ambiguity (VUCA) that characterize international business today.
In this paper we discuss how business performance measures like cost, quality, customer satisfaction, security, access to market and innovation are affected by VUCA and how insourcing and backshoring have lately emerged on top as they lower the impact of VUCA on these business measures. The paper ends with a word of caution—the rapidly changing global business environment requires that the performance measures be monitored keeping the VUCA factors in mind as markers.
Helen Lam, Anshuman Khare

Chapter 10. A Framework for Operational Agility: How SMEs Are Evaluating Their Supply Chain Integration

This chapter seeks to show how small medium enterprises (SMEs) have become more responsive to deal with the unexpected changes in the business environment. However, the impact on SME’s is not always clear, as resources required to implement such strategic responsiveness are often fall beyond what is considered to be acceptable risk. In this chapter an integrated approach is proposed to facilitate the ‘responsiveness’ when faced with uncertainty and environmental turbulences in supply chain design thus contributing to the notion of Operational Agility and Supply Chain Integration (SCI). The framework is based on earlier work developed by the authors, which focused on the integration of operational agility tools and techniques through external intervention. An implementation model is presented in which the practical aspects of the framework stages are presented. The framework is validated through case study observations, a number of issues raised in the framework are discussed and validated.
Iain Reid, Hossam Ismail, Hossein Sharifi

Chapter 11. Mittelstand and Decision-Oriented Controlling

The medium-sized enterprises, called Mittelstand, of the German economy have always been in an intensive competitive environment. Recently they find themselves confronted with events in a so called “VUCA-world” with extreme financial outcomes. An example marks the sudden decline of 26 % of German exports to Russia in 2014 compared to 2013. Leadership needs information and information are created and provided by Controlling. This article discusses a few thoughts about Controlling at “mittelstand-enterprises” in a “VUCA-World”.
Frank Kusterer

Chapter 12. Sustaining Reductions in Aircraft Emissions for Canada’s Major Airlines

In a time of growing climate awareness, Canada’s major airlines are facing increasing challenges to provide a sustainable and measurable reduction in emissions. Air Canada and WestJet demonstrate a commitment to environmental responsibility and emission reductions through replacing their fleet with newer and more fuel efficient aircraft, however this historically accepted approach is not sustainable in today’s changing world.
Assessing the capacity of an airline to meet its emission targets in the volatile aviation industry, this analysis identifies the importance of values statements in guiding employee behavior, establishing culture, and the role values play in environmental responsibility; specifically attuned to the ability of airlines to sustain their emission reduction programs. Specifically, this research draws attention to the ability of airlines to achieve organizational targets through reducing ambiguity whilst increasing values congruence.
In the identification and measurement of airline emission reduction strategies, it is evident that no established mechanism exists for airlines to quantify their emission reduction sustainability. Considering the volatile and uncertain future faced by airlines to meet corporate social responsibility goals, this analysis presents a framework that will enable airlines to forecast, measure and analyze their capacity to meet sustainable emission reduction targets.
Michael Chapman

Organization and Culture


Chapter 13. Organizational Approaches to Answer a VUCA World

Today, many organizations are today governed in more or less the same style, since Henri Fayol, Frederick W. Taylor, Arthur D. Little, and Henry Ford proposed and implemented new ways of working during the Second Industrial Revolution. These traditional models seemed to work very well as they gave stability and order in the dynamic competition. However, there are doubts that these principles are enough to secure the survival of a company. This paper outlines several recent activities in the domain of organizational development and distills three main common similarities between these activities. Finally, approaches to overcome both kinds of shortfalls—organizational as well as operational—are shortly presented.
Stefan Diefenbach, Thomas Deelmann

Chapter 14. Environmental Justice in a VUCA World

It is increasingly apparent that environmental damage resulting from globalized corporate activity has disproportionately impacted marginalized communities. What may not be readily apparent is the positive correlation between vulnerable populations and environmental hazards not only in emerging economies, but also in developed countries. The environmental justice movement suggests a framework to help address this issue. However, without understanding some of the underlying causes of environmental injustice, applying the framework meets with limited success. This paper looks at how the theory of stakeholder identity and salience, a commonly applied management approach—particularly in a VUCA world—contributes to environmental injustice. Following the tenets of this theory can logically lead to vulnerable populations being considered as very low-priority or less salient stakeholders. Thus their interests are subjugated to those of more powerful and visible stakeholders. Drawing on a Canadian example, this paper goes on to describe how an industry-government partnership may help mitigate these concerns.
Terry Beckman, Maggie Matear, Anshuman Khare

IT, Technology and Data Management


Chapter 15. The Uncertainty of Information Systems: Cause or Effect of VUCA?

The growing demand for information, an increase in personal computer skills and the key figure-driven management of companies have made IT ubiquitous, even indispensable. However, are users and decision makers better informed than their ancestors, more secure in their decisions today? Or does the ubiquity of information lead to a higher uncertainty, to an endless search for undisputable decision-making to no avail? Our subjective familiarity with information technology borders to over-assessment, and may lead to us taking higher risks both in economic, but also social nature. The article follows this question along three infrastructural spheres, based on F.A. von Hayeks “pretence of knowledge”: the development of technology relies on an existing technology infrastructure (the Internet), which allows to connect even smallest information feeds (the Internet of Things). Based on this, the knowledge infrastructure allows sustainable business models to provide new economic services. Both technology and knowledge follow a “spontaneous order”, and so it is a requirement for us humans to develop and maintain a legal order to provide acceptable borders between which the development of secure and safely to use information technology can take place.
Torsten Eymann

Chapter 16. Volatility, Uncertainty, Complexity and Ambiguity in Higher Education

In many industries, the introduction of new technological elements will institute a paradigm shift encompassing the entire value system. These threaten to rupture existing value chains, change the form, nature and content of products and their delivery, in and to provide a catalyst to the creation of a tsunami of change and dislocation.
The VUCA forces will present businesses with the need to move from linear modes of thought to problem solving with synthetic and simultaneous thinking. They cannot be ignored as hidden in the challenges are the essential opportunities that are necessary for survival and sustainability.
This paper explores the impact that the information technology elements are having on the Higher Education (HE) sector through the exploration and application of VUCA forces to a sustainability framework to determine the major areas of challenge. The paper will outline how Higher Educational institutions can identify and thereby potentially address the VUCA effects that impact the sustainability components of economics, ecology, politics and culture.
Brian Stewart, Anshuman Khare, Rod Schatz


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