A University professor introduces his publication “Creating Value by Taking Chance” to an audience of research students. The publication explains creating value by exploiting the opportunities found in risk by implementing strategic risk management in organizations. Due to the focus on value creation, the author has substituted “uncertainty” for “risk”. In the same context, other synonyms such as taking a chance, threat, vulnerability, volatility, and hazard have been used where appropriate in the publication. Organizations strive to create value for stakeholders. This objective is not always easy to achieve due to uncertainty in the business environment.
Over the years, organizations have used different approaches to manage uncertainty. A variety of procedures have been developed to control market volatilities, financial hazards, and vulnerabilities to natural disasters. While these uncertainty management processes might have been effective in the past, recent developments in the global market and geopolitical issues are inducing new uncertainties. Organizations realize the need to develop new uncertainty management concepts that can identify emerging uncertainties and capture opportunities that could be utilized to create value for stakeholders. This publication presents the concepts and components of strategic uncertainty management in the literature and explains their impact on value creation. Value in this paper is defined by “the triple bottom line” concept, which incorporates economic, social, and financial values.
The implementation of value-creating uncertainty management models is described, and the enormous value created by Apple Inc. over time is exemplified. In a period of fierce competition and market uncertainties, Apple leadership took the chance by producing innovative, user-friendly software and uniquely designed hardware. Despite higher prices than competitors’, the products caught consumers’ attention and helped Apple gain market share, creating value for the company. Apple Inc. later became one of the most valuable companies in the world.
The e-book explains how to create value by exploiting opportunities in risk through strategic risk management in organizations. Due to the focus on the creation of value, the author has substituted the word “uncertainty” for “risk”. In the same context, other synonyms such as taking a chance, threat, vulnerability, volatility, and hazard have been used where appropriate. Following a short review of historical background and an overview of the developments in uncertainty management, the components of strategic uncertainty management are described. The author introduces a strategic management framework and “the triple bottom line” performance measurement concept to define organizations’ value creation. Finally, an example of how strategic uncertainty management helps organizations to create value is presented by illustrating how Apple Inc. created immense value over time. Download the e-book.
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