Strategic management under uncertainty: implementation risks of international investment projects

Humeniuk, Y. and Ivashchenko, Oksana (2024) Strategic management under uncertainty: implementation risks of international investment projects Інвестиції: практика та досвід (14). pp. 83-89. ISSN 2306-6814

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Abstract

The purpose of the article is to define the economic category "uncertainty" and establish the transmission channels of the influence of economic uncertainty on the quality of strategic management and international business as such. Modern management is undergoing significant changes, which can be understood through the analysis of conditions of uncertainty. The main reason for the manifestation of uncertainty is the relationship between the system and chaotic regimes and the attitude of managers to the points of choice and decision-making (bifurcation points), which in classical management theories was considered as a process with given parameters, characterized by certainty and predictability. The synergetic approach, on the contrary, allows us to analyze management as a complex system based on a person, his motivational schemes and processes, and various types of organizational cultures. In conditions of uncertainty, effective management requires formation of a risk culture. Risks are individual actions taken in a situation of uncertainty with the hope of a favorable outcome of events, of winning. To a greater extent, risk culture manifests itself in the processes of managing modern changes. Changes are becoming an integral part of modern management. Attention is paid mostly to the individual, her interests, value bases, and target vector. Order is transformed into short periods of system stabilization between long periods of transformational change. Dynamic chaos, containing emerging structures of a new order, begins to attract special attention. Flexible management modes are emerging and rapidly developing based on self-organization processes (processes that change without dominant outside influence). One of these modes is the design control mode. The high pace of ongoing changes also increases uncertainty, since they provoke changes in the target vector, management decisions, and adjustments to the problem situation, which must be transferred from unstructured to structured status in record time. High rates of change cause numerous stressful situations for both subjects and objects of management, which can lead to erroneous decisions and actions. High rates of change are an objective characteristic of uncertainty, so adaptation seems to be one of the effective management strategies. It serves as the basis for evolutionary management in conditions of uncertainty. The high pace of modern changes covers all management levels: from intrapersonal (the level of the subject and object of management) to the global, when the subjects and objects of management are represented by organizations or various associations of organizations (unions, agglomerations, associations, etc.). Between these levels are the interpersonal, organizational, inter-organizational, state and interstate levels. The next important characteristic of uncertainty is the focus of managers on the present. The future horizon turns out to be closed for forecasting and planning, as well as for subsequent monitoring of achieved results or implemented plans. The experience of the past is ineffective in the unfolding events of the present, since each management situation becomes unique for management influence. This significantly complicates the management process, since each situation is considered new. The occurrence of force majeure circumstances can lead to high uncertainty in the internal and external management of the organization. Attempts to draw on the experience of past situations that seem similar do not lead to the desired results. At the same time, the manager finds himself deprived of time to make the necessary decisions due to the high pace of changes taking place. Uncertainty can also affect the effectiveness of economic policy and can imply changes in the composition of the optimal mix of strategies. For example, a reduction in the elasticity of investment to changes in business conditions, such as the level of interest rates, during periods of heightened uncertainty would require a more substantial reduction in interest rates to achieve the same effect on investment as in normal times.

Item Type: Article
Uncontrolled Keywords: uncertainty; risk; risk management; strategic management; international business; economic growth; economic activity; macroeconomic environment; transmission channels; economic policy; finance; investment; forecasting; international project
Subjects: Статті у базах даних > Index Copernicus
Статті у періодичних виданнях > Фахові (входять до переліку фахових, затверджений МОН)
Divisions: Факультет економіки та управління > Кафедра міжнародної економіки
Depositing User: Доцент Оксана Андріївна Іващенко
Date Deposited: 22 Jul 2024 09:49
Last Modified: 22 Jul 2024 09:49
URI: https://elibrary.kubg.edu.ua/id/eprint/49457

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