What is the issue?
Many government and business organizations across the globe are seriously de-stabilized due to VUCA factors.
What is VUCA?
- The world is experiencing a crazy spin of events because too many uncertainties have plagued it.
- Most organizations exist by adapting to complexities and by behaving flexible because they operate in multiple countries.
- VUCA is an acronym used to describe the state of business, political, societal and ecological world.
- VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity.
What are the instances of VUCA across the globe?
- Volatility - Brexit is a good example of the VUCA world, Britain’s exit from the European Union took the world by surprise.
- A consequence of this political factor has affected economics, commerce, regulatory system and emotional perception of the people at large.
- Syria’s war shows no sign of stopping, Syria can be described as several interconnected wars, and it’s not government-versus-rebels narrative it started out as part of Arab spring in 2011.
- The US pressure on Turkey to deal with the ISIS will actually make Turkey more vulnerable to attacks from terrorist groups.
- Brazil is unable to address its growing fiscal deficit.
- The war between North Korea and South Korea, and the political instability in many parts of world has increased volatility.
- Uncertainty - In present world, Mergers, acquisitions and takeovers have reached a peak globally because firms are seeking to position and reposition themselves.
- Making systematically-sound strategic decisions under uncertainty requires mature strategies in a framework for determining the level of uncertainty surrounding strategic decisions and for tailoring strategy to that uncertainty.
- Management techniques were always based on assumptions about the future, and the use of planning is a major tool of management control.
- Complexities - Globalization has pushed the boundaries of doing business, which has only created a wide gap between developed and underdeveloped markets, increasing the competition from new entrants.
- The biggest fact today is that the start-ups are giving competition to established businesses in many sectors; bigger and established players are dumbfounded due to creativity and innovation from smaller firms.
- Organizations today need 24×7 innovative pool of employees, those who can just keep innovation pumping at all levels of business.
- Ambiguity - Too much of information keeps pouring in from everywhere, creating more and more ambiguity.
- Customers have a lot of information and they are confused about what to buy, how to buy, from where to buy, at what price to buy.
- Globalization has paved way for a growing number of multichannel at all levels, from governments to citizens, and each is stumbling with their own set of priorities and responsibilities.
What are the impacts of VUCA on the society?
- The geographical, political, ecological, economical changes are too much of a burden on business organizations.
- Local businesses have fragmented the business world and multinationals have a tough time fighting them.
- Everything has become complex: marketing, sales, pricing, operations, R&D, a firm’s infrastructure, supply chains, buyer behavior, big data systems, economic models, getting finances … everything is challenging.
- Due to random organizational structures, the authority and responsibility lines have becomes blurred, which creates a big leadership challenge.
- Due to blurring responsibilities of managers, internal complexities keep growing in organizations.
- Employees get busy playing the blame game and politicizing the work atmosphere.
- The same is with governments blurring responsibilities gives way to non-transparency in systems.
Source: Financial Express
