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Strategic decisions in turbulent times: Lessons from the energy industry

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  • Giones, Ferran
  • Brem, Alexander
  • Berger, Andreas

Abstract

Most of the firms currently in the S&P 500 probably will not be there in 15 years. In times of great uncertainty, managers are called upon to make the right strategic choices, preserve core businesses, and prepare their organizations for the future. How can managers make these choices when the industry is under transformation? In this article, we explore how the popular VUCA framework can help to make sense of turbulent contexts and drive the decision making of managers. We study the case of the energy industry, in which traditional business models eroded quickly and dominant players lost their positions. Based on personal interviews with the CEOs of RWE (Germany) and NRG Energy (U.S.), we analyze how these executives led transformation of their organizations. We get immersed in their decision-making processes and depict how the VUCA framework helps them to identify, map, and prepare their organizations to respond to the volatility, uncertainty, complexity, and ambiguity in their industry. We propose a guide for executive managers to navigate through VUCA contexts, taking into account the necessity to introduce short- and long-term responses that prepare organizations and stakeholders for an uncertain future.

Suggested Citation

  • Giones, Ferran & Brem, Alexander & Berger, Andreas, 2019. "Strategic decisions in turbulent times: Lessons from the energy industry," Business Horizons, Elsevier, vol. 62(2), pages 215-225.
    • Handle: RePEc:eee:bushor:v:62:y:2019:i:2:p:215-225
    DOI: 10.1016/j.bushor.2018.11.003
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    References listed on IDEAS

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    2. Chwiłkowska-Kubala Anna & Malewska Kamila & Mierzejewska Katarzyna, 2023. "The importance of resources in achieving the goals of energy companies," Engineering Management in Production and Services, Sciendo, vol. 15(3), pages 53-68, September.
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    5. Chwiłkowska-Kubala, Anna & Cyfert, Szymon & Malewska, Kamila & Mierzejewska, Katarzyna & Szumowski, Witold, 2023. "The impact of resources on digital transformation in energy sector companies. The role of readiness for digital transformation," Technology in Society, Elsevier, vol. 74(C).
    6. Lazar Gitelman & Mikhail Kozhevnikov & Olga Ryzhuk, 2019. "Advance Management Education for Power-Engineering and Industry of the Future," Sustainability, MDPI, vol. 11(21), pages 1-23, October.
    7. Ekaterina & Jörg, 2021. "Is dominant logic a value or a liability? On the explorative turn in the German power utility industry," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 17(2), pages 125-158.
    8. Zhang, Wei & Qin, Chu & Zhang, Wenyao, 2023. "Top management team characteristics, technological innovation and firm's greenwashing: Evidence from China's heavy-polluting industries," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    9. Di Foggia, Giacomo, 2021. "Energy-Efficient Products and Competitiveness in the Manufacturing Sector," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(1).

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