Enterprise Resilience And Volatile, Uncertain, Complex, And Ambiguous Reality

Abstract

It has become an imperative for any enterprise to determine a “must-have” attribute to ensure enhanced performance efficiency, particularly in this era of highly volatile, uncertain, complex, and ambiguous (VUCA) business environment. It is no wonder that this task has attracted numerous contributions from researchers and business practitioners that attempt to investigate on various factors influencing successful performance and survival of an organisation. In this regard, the present study advocates for a consideration of the resilience approach, which has been demonstrated to be the most efficient. This paper also is an attempt to compile the notable research reported on resilience attribute of an enterprise undertaken as a prelude to search for newer and deeper avenues of future research. By employing content analysis of the academic and expert texts database, this paper determines the features of a resilient enterprise in VUCA conditions in the context of the digital evolution and develops a conceptual understanding of resilience under such circumstances. This would aid in the development of an effective enterprise functioning suitable for various situations. The findings of the study clearly demonstrate that even in VUCA conditions, an enterprise can effectively operate and develop, with the right understanding and consideration of trends.

Keywords: ResilienceVUCA realityenterpriseadaptabilityagilitysustainability

Introduction

In the 21^st century the boundaries around the enterprises are shifting and most of the old rules cannot be applied to make a company effective and efficient in the current chaotic, turbulent, and rapidly changing environment driven by continuing digitalization. Some academics and practitioners apply the term VUCA to describe today’s business world. The term can be traced back to the military world. Previous studies mostly defined VUCA conditions as “…a world order where the threats are both diffuse and uncertain, where conflict is inherent yet unpredictable, and where our capability to defend and promote our national interests may be restricted by materiel and personnel resource constraints” (Yarger, 2006, p.17). Later the term was applied to organisational settings. Table 01 demonstrates various readings of the acronym components by different scholars.

To survive and to prosper in this complicated environment companies have to look at arising opportunities. To achieve this goal in Johansen and Euchner the VUCA acronym is suggested to be read positively as Vision, Understanding, Clarity and Agility (Johansen & Euchner, 2013). Table 02 gives an overview of the VUCA acronym positive understanding by different scholars.

Johansen and Euchner (2013) argue that understanding and clarity are necessary prerequisites while agility is seen as the tangible result. Karre, Hammer and Ramsauer (2019) name agility as a critical success factor for companies and their management operating under volatile and uncertain market conditions.

Other researchers suggest other approaches to deal with VUCA conditions of business environment, namely flexibility as a reactive approach (Ramasesh, Kulkarni, & Jayakumar, 2001; Chryssolouris, Georgoulias, & Michalos, 2012) and transformability that influences the capacities of a company’s structures and processes to adapt (Wiendahl et al., 2007). According to Jari and Lauraeus (2019) “key issues in modern VUCA management are agility (a response to volatility), information knowledge management (a response to uncertainty), restructuring (a response to complexity), and experimentation (a response to ambiguity)” (p.105).

Problem Statement

Yet, despite a considerable number of literature, that is concerned with VUCA environment, problems relating to the core attribute any enterprise needs to achieve excellence under the conditions of volatility, uncertainty, complexity and ambiguity require further research. In view of this, the paper seeks to conceptually examine the new and emerging enterprise orientation in the literature – enterprise resilience – in the attempt to prove that this approach to enterprise functioning has goals of providing benefits to people and the environment under normal and extreme operating conditions and could yield the best results.

Research Questions

This paper aims to bring to bear the resemblance between the current remedies for an enterprise to survive in the VUCA world and the properties of the resilience concept. It does this with the view of re-focusing discussions of successful enterprise strategy on an effective use of the resilience theory to achieve the desired organisational productivity.

Purpose of the Study

The study of enterprise resilience is complicated by some constraints, e.g. a common approach to measuring enterprise resilience that has not yet been developed. There are also no generally accepted definitions, metrics and methods of quantitative description of such aspects as the ability to withstand economic shocks (resistance) and the ability of an enterprise to recover to pre-crisis levels (recoverability). Thus, the purpose of the article is to determine the features of enterprise resilience in VUCA conditions in the context of the evolution of modern technologies and to further develop a conceptual model of a resilient enterprise under such circumstances.

Research Methods

The paper achieves this purpose by reviewing literature on the enterprise resilience and its attributes; and further goes on to draw a conceptual link among them to buttress the point that resilience is an opportunity for a company to face challenges of the VUCA environment and remain profitable. The methodology of content analysis was applied to determine the features of the resilience concept and examine their intercorrelations with various ways research articles suggest negotiating VUCA conditions and prepare for the future of work. Thus, this research paper is conceptual in nature and the methodology of data collection is through secondary sources like expert websites, practitioners’ blogs, academic books, research journals etc.

Findings

The data analysis is described in this part of the paper. It is then followed by a discussion of the findings. The research questions are related to the findings. The analysis of the data was conducted to identify, describe and investigate the relationship between enterprise resilience and the characteristics that various academics and practitioners suggest surviving in VUCA conditions. Data were obtained from 15 academic articles on the topic of VUCA world and 15 research papers on enterprise resilience (n=30). Themes that emerged from the papers on VUCA were compared and contrasted to the themes generated from the papers on resilience. In the current study, the data were analysed in four stage process. Firstly, relevant texts were selected for each of the questions and placed in new subtexts or files, for VUCA and resilience research separately. Secondly, the content categories were defined. Next, actual sentences or quotations from VUCA research were allocated to relevant categories/themes, which included relevant material from the papers on resilience. And, finally, the sentences or sections of text were processed descriptively, to generate a coherent representation of the content.

Issues, under the following themes, were identified, described and analysed:

• Current remedies for an enterprise to survive in the VUCA world;

• The properties of the resilience concept.

Table 03 summarizes the insights of academic research, but includes some additional remarks of the business practitioners and experts. Especially the highly frequent strategic ways to cope with the turbulent VUCA conditions and their corresponding resilience traits are clarified and defined in this table.

The whole spectrum of resilience attributes also includes other indicators, e.g. relevance, reliability, and trust (Newnham & Crask, 2015). But the ones that are reported in the table are the most relevant to the VUCA environment. This clearly demonstrates that resilience, which is defined by guiding standards organizations, including the British Standards Institution (BSI) and the International Standards Organization (ISO) as “… an organization’s capacity to anticipate and react to change, not only to survive, but also to evolve” (ISO 22316:2017) can be named as a “must-have” attribute of any enterprise operating in the chaotic VUCA reality that has become the “new normal” of today’s business world.

Conclusion

This paper presents a comparative account of results that emerged from the content analysis of academic discourse on the topics of VUCA business environment and enterprise resilience. The review conducted in the course of this research on the VUCA literature presents the resilience approach as capable of providing “a shield towards VUCA situations” (Acharyulu, 2019, p.29). In view of this, the paper advocates for the consideration by scholars and practitioners of how to effectively develop and measure the resilient ability of an enterprise to meet the demands of the current unstable and unpredictable environment challenging organisations with “digital transformation, increasing regulatory pressure, and constant threats that disrupt business such as cybercrime, terrorism, natural events, and market volatility” (Tapscott, 2018). Although the generalisability of the research results is subject to certain limitations, this paper still attempts to contribute academically and practically to the discussion of solutions to the enterprise facing turbulent VUCA conditions.

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