The relationship between environmental uncertainty and strategic decision taking in the presence of strategic flexibility as a variable mediator

ROYAL BRITISH COLLEGE
"THE RELATIONSHIP BETWEEN
ENVIRONMENTAL UNCERTAINTY
AND STRATEGIC DECISION – TAKING
IN THE PRESENCE OF STRATEGIC
FLEXIBILITY AS A VARIABLE MEDIATOR"
"Study applied to Egyptian pharmaceutical companies"
Submitted by
ABAS MOHAMED ADLY
Egypt
A Thesis submitted to the RBC in partial fulfillment of the requirements for the award of
the degree of a DOCTORATE IN BUSINESS ADMINISTRATION IN STRATEGIC
MANAGEMENT
March 2020

i
Declaration
I certify that all the material in this thesis that is not my own work has been identified, and
that no material is included for which a degree has previously been conferred on me.
The contents of this thesis reflect my own personal views, and are not necessarily endorsed
by the RBC.
Signature _______________________________
Date _______________________________

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Dedication
To those that when she embraced me as if the sun had
illuminated my heart for a thousand years
AbasAdly

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ABSTRACT
"The relationship between environmental uncertainty and strategic
decision–taking in the presence of strategic flexibility as a variable
mediator"
"Study applied to Egyptian pharmaceutical companies"
Prepared by
Abas Mohamed Adly
Supervisor
Dr. Ayman Sheta
The study aimed to revealing the Impact of Strategic Flexibility as a Variable
Mediator between Environmental Uncertainties and Strategic Decision Taking in
Egyptian pharmaceutical companies.
In order to achieve the objectives of the study, the researcher designed a
questionnaire consisting of (35) paragraphs to gather the primary information from
study sample.
The statistical package for social sciences (SPSS) program was used to analyze and
examine the hypotheses. The study sample consists of (180).
The study used many statistical methods to achieve study objectives, such as simple,
multi regression and path analysis. After executing the analysis to study hypotheses;
the study concluded that:

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1. There is a significant statistical relationship between environmental
uncertainty (Dynamism - Hostility) and strategic flexibility (Marketing
Flexibility - Competitive Flexibility) in the Egyptian pharmaceutical
companies at the level of significance (0.05).
2. There is a significant statistical relationship between strategic flexibility with
its variables (marketing flexibility - competitive flexibility) and strategic
decision taking in Egyptian pharmaceutical companies at the level of
significance (0.05).
uncertainty (dynamism - hostility) and strategic decision taking in Egyptian
pharmaceutical companies at the level of significance (0.05).
uncertainty and strategic decision taking in Egyptian pharmaceutical
companies in the presence of strategic flexibility at the level of significance
(0.05).
5. There is a significant statistical relationship between dynamism and strategic
decision taking in Egyptian pharmaceutical companies in the presence of
strategic flexibility at the level of significance (0.05).
6. There is a significant statistical relationship between hostility and strategic
decision taking in Egyptian pharmaceutical companies in the presence of
strategic flexibility at the level of significance (0.05).
According to the conclusions reached from the theoretical framework of the study, as well
as what was obtained from the results through the reality of statistical analysis of the data,
it was reached that attention should be paid to increasing the number of international
markets in which it operates, by making decisions in light of the lack of full certainty of
the results of these decisions.
As well as attention to the rapid response to customer needs to cover market segments to
reduce competitive risks by other companies in the same field.
It also leads to interest in introducing new products that reduce the threats of
international competitors in the same markets.

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It is evident from the work and continuously taking decisions in the context of a complete
confirmation by identifying the company's internal strengths and weaknesses, its market
opportunities and the threats of competitors working in the same sector

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Table Contents
Declaration................................................................................................i
Dedication.................................................................................................ii
ABSTRACT.............................................................................................iii
Table Contents.........................................................................................vi
List of Tables ............................................................................................x
List of Figures.........................................................................................xii
Chapter One ..........................................................................................1
The general framework of the study...............................................................................1
(1-1): Introduction ..........................................................................................................2
(1-2): The problem of the study and its questions ..........................................................4
(1-3): The importance of research ..................................................................................5
(1-4): Research Objectives .............................................................................................6
(1-5): The hypothesis of research ...................................................................................6
First hypothesis HO1................................................................................................7
Second Hypothesis HO2 ..........................................................................................7
Third Hypothesis HO3 .............................................................................................7
Fourth Hypothesis HO4 ...........................................................................................8
(1-6): The limits of research ...........................................................................................8
(1-7): Search Filters ........................................................................................................9
(1-8): Procedural definitions...........................................................................................9
Strategic flexibility..................................................................................................9
Environmental uncertainties..................................................................................10
Full Assurance .......................................................................................................11
The risk..................................................................................................................11
Thumb and total ambiguity: ..................................................................................12
Strategic decisions: .......................................................................................................12

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Chapter II ............................................................................................13
The theoretical framework of the study and previous studies ......................................13
(2-1): Introduction ........................................................................................................14
(2-2): The Environmental uncertainty :-.......................................................................14
(2.2.1): The concept of environmental uncertainty ...............................................16
(2.2.2): Environmental uncertainty perspectives ...................................................17
(2.2.3): The importance of managing environmental uncertainty.........................22
(2.2.4): Environmental uncertainty management approaches ...............................24
(2.2.5): Environmental uncertainty management requirements:...........................30
(2.2.6): Environmental uncertainty strategies: ......................................................31
(2-2-7): Dimensions of environmental uncertainty:..............................................35
(2.2.8): Environmental Uncertainty Measurement................................................35
(2-3): The Strategic flexibility ......................................................................................38
)2-3-1): The concept of strategic flexibility: .........................................................38
(2-3-2) :Importance of strategic flexibility:...........................................................41
(2-3-3): Strategic flexibility dimensions: ..............................................................42
(2-3-4): Strategic flexibility measures:..................................................................45
(2.4): The Strategic decisions .......................................................................................49
(2-4-1): Strategic decision taking approaches .......................................................50
(2.4.2): Characteristics of the Strategic Decision..................................................53
(2-5): The Relationship between study variables .........................................................55
(2-6): The Previous Studies ..........................................................................................56
1- Study (Sharfman & Dean, 1997) entitled.......................................................56
2- Study (Difonzo and Bordia, 1998) entitled.... ................................................57
3- Study (Hatch & Zweig, 2001) entitled...........................................................57
4- Study (Abbott & Banerji, 2003) entitled........................................................58
5- Study (Hilhorst, et al, 2004) entitled… ..........................................................58
6- Study (Anand & Ward, 2004) entitled.... .......................................................59
7- Study (Voola & Muthaly, 2005) entitled........................................................59
8- Study (Lin, 2006) entitled…...........................................................................60
9- Study (Elbanna & Child, 2007) entitled.........................................................60
10- Study (Awad, 2009) entitled...........................................................................60
11- Study (Jarrar & Dwikat, 2013) entitled..........................................................61

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)2-7): What distinguishes this study from previous ones .............................................62
1. In terms of the study environment:....................................................................62
2. In terms of the study objective: .........................................................................62
3. In terms of methodology: ..................................................................................62
Chapter III...........................................................................................63
Methods and procedures ...............................................................................................63
(3-1): Introduction ........................................................................................................64
(3-2) :Study Methodology ............................................................................................64
(3-3) :Study population and sample..............................................................................65
(3-4( : Demographic variables of the study sample ......................................................65
(3-5): Schematic model of the study.............................................................................67
(3-6): Study tools and sources of information ..............................................................68
(3-7): Statistical treatment used ....................................................................................70
(3–8): Validity and stability of the study tools .............................................................70
1 -Virtual honesty..................................................................................................70
2 .Stability of the study tool ..................................................................................71
Chapter IV...........................................................................................73
Results of analysis and testing hypotheses ...................................................................73
(4-1) :Introduction ........................................................................................................74
(4-2): Frequency distribution of study sample responses to study questions ...............74
(4-3): Testing the hypotheses of the study....................................................................85
The first main hypothesis is HO1...........................................................................85
The second main hypothesis is HO2......................................................................91
The third main hypothesis HO3: -..........................................................................96
The fourth main hypothesis is HO4 .......................................................................98
Chapter V...........................................................................................109
Conclusions and recommendations ............................................................................109
(5–1): Introduction......................................................................................................110
(5–2): The Results.......................................................................................................110

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(5–3): The Conclusions :-...........................................................................................112
(5–4): The Recommendations: ...................................................................................113
The researcher also recommends................................................................................118
References list..........................................................................................120
List of appendices .....................................................................................134
Questionnaire (Study Tool( .......................................................................................136

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List of Tables
Table 1:Table (3-1) Description of demographic variables for the members of the
study sample .......................................................................................................................66
Table 2: Table (3-2) Shows the coherence coefficient of the internal dimensions of the
questionnaire (Cranbach Alpha)......................................................................................71
Table 3: Table (4-1) Arithmetic averages, standard deviations and level of Dynamism
significance .........................................................................................................................75
Table 4: Table (4-2) Arithmetic averages, standard deviations and level of Hostility
significance .........................................................................................................................76
Table 5: Table (4-3) Arithmetic averages, standard deviations and level of Marketing
flexibility significance ........................................................................................................79
Table 6: Table (4-4) Arithmetic averages, standard deviations and level of
Competitive Flexibility significance .................................................................................81
Table 7: Table (4-5) Arithmetic averages, standard deviations and level of strategic
decision-taking significance ..............................................................................................83
Table 8: Table (4-6) Results of Multiple Regression Analysis for Environmental
Uncertainty on Strategic flexibility in Egyptian Pharmaceutical Companies .............85
Table 9: Table (4-7) Shows the results of the test of the effect of dynamics on strategic
flexibility (marketing flexibility - competitive flexibility) in Egyptian pharmaceutical
companies ...........................................................................................................................87
Table 10: Table (4-8) Shows the results of the test of the effect of hostility on strategic
flexibility (marketing flexibility - competitive flexibility) in Egyptian pharmaceutical
companies ...........................................................................................................................89
Table 11: Table (4-9) Results of Multiple Regression Analysis for Strategic Flexibility
on Strategic Decision Taking in Egyptian Pharmaceutical Companies .......................91

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Table 12: Table (4-10) Shows the results of the simple regression analysis test for
marketing flexibility on strategic decision taking in Egyptian pharmaceutical
companies ...........................................................................................................................93
Table 13: Table (4-11) Shows the results of the simple regression analysis test for
competitive flexibility on strategic decision taking in Egyptian pharmaceutical
companies ...........................................................................................................................94
Table 14: Table (4-12) Results of Environmental uncertainty Impact Test (dynamism
- Hostility) on Strategic Decision Taking in Egyptian Pharmaceutical Companies....96
Table15: Table (4-13) Results of the path analysis test for environmental uncertainty
on strategic decision taking in Egyptian pharmaceutical companies in the presence of
strategic flexibility .............................................................................................................99
Table16 : Table (4-14) Results of the path analysis test for dynamism on strategic
decision taking in Egyptian pharmaceutical companies companies in the presence of
strategic flexibility ...........................................................................................................102
Table 17: Table (4-15) Results of the path analysis test for hostility on strategic
decision taking in Egyptian pharmaceutical companies companies in the presence of
strategic flexibility ...........................................................................................................105

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List of Figures
Figure 1:Figure (2-1) Limitations of Environmental Uncertainty ................................20
Figure 2: Figure (2-2) The four levels of environmental uncertainty ...........................25
Figure 3: Figure (2 - 3) Matrix determining the precedence of the problem...............29
Figure 4:Figure (3-1) Schematic models of the study .....................................................67
Figure 5:Figure (4-1) Summary of the results of the environmental uncertainty .......77
Figure 6: Figure (4-2)Summary of the results of the Strategic flexibility variable with
its two main axes................................................................................................................82
Figure 7: Figure (4-3) presents the laboratory study model in the view of analysis and
discussions ........................................................................................................................108

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Chapter One
The general framework of the study

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(1-1): Introduction
Interest in the concept of strategic flexibility began in the last decade of the 20th century
and is a relatively modern concept due to the increasing degree of environmental
uncertainty faced by business organizations. The global environmental changes that
surrounded business organizations during the last decade of the 20th century and the
beginning of the third millennium have occurred as a natural result of a group Some factors
are political, such as the Eastern bloc and the Soviet Union in 1990, the domination of the
Western bloc states and the United States on the world political scene and the other
economic aspects such as the tendency of organizations towards globalization and free
trade agreements. (Abbott & Banerji, 2003: p.42).
The business environment has been markedly influenced by the previous factors combined,
especially the organizations that operate on the world stage, which are characterized by the
highest dynamic levels and the rapid and remarkable change in all It has also resulted in
many opportunities, challenges and threats. Competition has become fierce in an
international market that does not recognize regional boundaries, and is accompanied by a
change in the desires, tastes and tastes of clients (Bhandari, et al., 2004: p.13). working on
the scene are no longer sufficient to determine the chances of survival or success, so it
shall adopt a more flexible ways to respond to the changes that occur in the surrounding
environment and without it, the success is pure coincidence
From here, (Yonggui & Hing-po, 2004: p.37) used the concept of strategic flexibility that
refers to the ability of business organizations and their ability to respond to the
requirements of changing and homogenous competitive environments, which is an
essential component to increase the ability of business organizations to cope with
important and rapid environmental changes in uncertainty.
Make it able to manage its activities and take its decisions efficiently and effectively in the
circumstances of the sharp competition that surrounds them
It is very important that business organizations achieve through flexibility the initiative
aspect, redefine the environmental uncertainty in the markets in which they operate and
make it a strong point in their competitiveness and taking their strategic decisions. Hence,
we can say that flexibility is an adaptive response to environmental uncertainties

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Strategic flexibility is the organization's ability to identify changes in the external
environment to mobilize resources for new trends and rapid responses to these changes.
Strategic planning must be flexible in order to address potential changes in implementation
(Al-Sakarna, 2010, p. 223(
(Al-Taei & Al-Khafaji, 2009) believe that the strategic flexibility of business organizations
is one of the tools of strategic success embodied in the speed and ability to respond to
environmental changes, linking the components of the organization to its potential and
resources.
Under the circumstances of risk, uncertainty and scarcity of information, strategic
decisions are usually taken where they are made in the presence of imperfect and often
inaccurate and often incorrect information.
This is because the uncertainty of the future is prevalent in the environment surrounding
the organization (Macmillan & Tampoe, 2000: p.12) Strategic decision the preferred
choice for decision-takers among strategic alternatives is to meet a strategic position
Therefore, they are key decisions related to the performance of the organization's mission,
goals and objectives towards opportunities and threats related to its environment.
(Mintzberg & Quinn,1996: p.4) noted that strategic decisions determine the organization's
general direction and vitality
(Wheelen & Hunger, 2006: p.18) emphasize that strategic decisions are unlike other
decisions and point to the long-term future of the Organization.
(Mintzberg & Quinn,1996: p.5) defined the strategic decisions as decisions that determine
the organization's basic process in the presence of unexpected and unexpected variables
that may occur in its surrounding environment, which ultimately constitute the real
objectives of the organization and help in drawing the outlines of during which the
Organization exercises its work and leads to the distribution of resources and determines
their effectiveness
Therefore, the present study seeks to identify the effect of strategic flexibility as a variable
mediator on the relationship between environmental uncertainty and strategic decision
taking.

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(1-2): The problem of the study and its questions
In the business organizations flexibility is one of the most important characteristics.
Because of the complexities and rapid changes in the environment, flexibility has moved to
represent the focus of senior management in these organizations. With many research and
studies on flexibility in general, there is little research in the field of strategic flexibility in
business organizations
Because strategic flexibility represents a set of characteristics and indicators that position
the organization and enable it to adapt and respond efficiently to future changes that occur
in the environment of its work in order to take its decision and achieve its objectives in the
best ways and methods (Idris & Al- Ghalbi, 2010: p21) Because continuous change is an
essential feature of the natural activities of pharmaceutical organizations, it requires them
to respond to this change in customer requirements and needs through adaptation and
harmonization, which reflects flexibility.
Egyptian pharmaceutical companies like other organizations take their decisions at
different strategic, tactical and operational levels.
In order for these companies to take their strategic decisions, they need to analyze their
internal and external environment and determine the conditions directly related to them in
order to achieve the lowest rates of environmental uncertainty with their variables
(dynamism- hostility). proposal (Miller & Friesen, 1983: 221-235) With strategic
flexibility with their variables (marketing flexibility - competitive flexibility) proposal
(Abbott & Banerji, 2003: p.1-8)
But the problem lies in the possibility of obtaining the necessary information from the
external environment, both in terms of the number and harmony of the environmental
parties that affect the company directly or indirectly, and where the dynamics and direction
of change can be summarized
Therefore, the relationship between environmental uncertainty and strategic decision-
taking should be studied in the presence of the strategic flexibility as a mediator because of
its role in addressing the mentioned problem and will contribute to the long-term success
of the Egyptian pharmaceutical companies. According on this the

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problem of the study can be presented more clearly by the following questions
1. What is the level of importance of the variables of study (strategic flexibility -
environmental uncertainty - strategic decision-taking) in the Egyptian
pharmaceutical companies?
2. Is there an effect of environmental uncertainty on the variables (dynamism -
Hostility) on the strategic flexibility of their variables (marketing flexibility -
competitive flexibility) in the Egyptian pharmaceutical companies?
3. Is there an effect of environmental uncertainty on the variables (dynamism -
Hostility) to make strategic decisions in the Egyptian pharmaceutical companies?
4. Is there an impact on the strategic flexibility of its variables (marketing flexibility
- competitive flexibility) to take strategic decisions in Egyptian pharmaceutical
companies?
5. Is there an impact of environmental uncertainty on the variables (dynamism -
Hostility) to take strategic decisions in the Egyptian pharmaceutical companies in
the presence of strategic flexibility as a variable mediator?
(1-3): The importance of research
The study derives its importance from the following points
1. The importance of the variables studied, namely environmental uncertainty,
strategic decision-making and strategic flexibility
2. Explain the effect of environmental uncertainty in its variables (dynamism -
hostility) on the strategic decision-taking in the Egyptian pharmaceutical
companies in the presence of strategic flexibility with their variables (marketing
flexibility - competitive flexibility)
3. The importance of the results of the relationship of correlation and influence
between the variables of the study, which will explain the picture to the decision
makers in the Egyptian pharmaceutical companies and clarify the aspects of the
most important and less influential and stronger correlation and weakening link,

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which shows the aspects that should be increased attention and avoid deficiencies
in other aspects.
(1-4): Research Objectives
The main objective of this study is to try to discover the effect of strategic flexibility as an
intermediary of the relationship of environmental uncertainty by making strategic decisions
in the Egyptian pharmaceutical companies by achieving the following objectives
1. Determine the level of importance of strategic flexibility, environmental
uncertainty and strategic decision-taking in Egyptian pharmaceutical companies
2. Determining the impact of environmental uncertainty on its variables (dynamism
– Hostility) on strategic flexibility with its variables (marketing flexibility -
competitive flexibility) in Egyptian pharmaceutical companies.
3. Determining the impact of strategic flexibility with its variables (marketing
flexibility - competitive flexibility) on strategic decision taking for Egyptian
pharmaceutical companies
4. Determining the impact of environmental uncertainty on its variables (dynamism -
Hostility) on strategic decision taking in Egyptian pharmaceutical companies in
light of the strategic flexibility of their variables (marketing flexibility -
competitive flexibility)
5. Building a model that represents the relationship between the variables of study
among them and the effect of each other on some
(1-5): The hypothesis of research
Based on the study problem, the following main hypotheses have been formulated and will
be tested. The hypotheses of the study are based on an attempt to answer the questions that
were raised in the study problem and its correlation with the theoretical hypothesis as
follows.

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First hypothesis HO1
"There is no statistically significant relationship to environmental uncertainty
(dynamism - Hostility) on strategic flexibility in Egyptian pharmaceutical companies"
The following sub-hypothesis are derived.
(HO1-1) -There is no statistically significant relationship to the dynamism of strategic
flexibility in Egyptian pharmaceutical companies at the level of significance (α ≤ 0.05)
(HO1-2) -There is no statistically significant relationship to the Hostility of strategic
flexibility of Egyptian pharmaceutical companies at a level of significance (α ≤ 0.05(.
Second Hypothesis HO2
"There is no statistically significant relationship to the strategic flexibility of its
variables (marketing flexibility - competitive flexibility) to take strategic decisions in
Egyptian pharmaceutical companies"
The following sub-hypothesis are derived
(HO2-1) There is no statistically significant relationship to the marketing flexibility of
strategic decision-taking in Egyptian pharmaceutical companies at the level of
significance (α ≤ 0.05).
(HO2-2) There is no statistically significant relationship to the competitive flexibility of
strategic decision taking in Egyptian pharmaceutical companies at the level of
significance (α ≤ 0.05).
Third Hypothesis HO3
(dynamism - Hostility) on strategic decision-taking in Egyptian pharmaceutical
companies"

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Fourth Hypothesis HO4
(dynamism - Hostility) on strategic decision-taking in Egyptian pharmaceutical
companies"
The following sub-hypothesis are derived.
(HO4-1) There is no statistically significant relationship to the dynamism of strategic
decision-taking in the Egyptian pharmaceutical companies in the presence of strategic
flexibility at the level of significance (α ≤ 0.05).
(HO4-2) There is no statistically significant relationship to the Hostility of strategic
decision-taking in the Egyptian pharmaceutical companies in the presence of strategic
flexibility at the level of significance (α ≤ 0.05(
(1-6): The limits of research
The scope of the research is :
-
1. Human Boundaries: Occupational sites (General Manager - Deputy
General Manager - Assistant General Manager - Director of Administration)
in the Egyptian pharmaceutical companies
2. Time limits: The duration of the study
3. Scientific limits: The researcher relied on the variables of environmental
uncertainty proposed by (Miller & Friesen, 1983: p221-235), which is kinetic-
hostile, and was adopted in relation to the variables of strategic flexibility
(Marketing flexibility - competitive flexibility) on the proposal by (Abbott &
Banerji, 2003: p1-8) and strategic decision-taking was based on the proposal
(Wheelen & Hunger, 2008:p20)

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(1-7): Search Filters
The researcher presents some difficulties and obstacles encountered during the
preparation of the study, including:
1- The difficulty of obtaining the necessary information and data for conducting the
study through the questionnaire prepared for this.
This is due to the preoccupation of the sample members of the study, which requires
follow-up to obtain the necessary information to achieve the objectives of the study.
2- The great effort in obtaining sources, articles and research, due to the lack of sources
related to the subject of research to the knowledge of the researcher.
3- The nature of the institutions that were selected as a sample for study, represented by
Egyptian pharmaceutical companies.
4- The studies that dealt with the subject of strategic flexibility and environmental
uncertainty and strategic decisions and the relationship between them few to the
knowledge of the researcher.
(1-8): Procedural definitions
Strategic flexibility
The concept of flexibility is reflected in multiple disciplines in the operational fields (Ali et
al., 2014: p379).
(Srour et al., 2016: p373) considers that the strategic capabilities of adaptive and timely
response to significant environmental changes have an impact on performance
Organization and its continuity (Shimizn & Hitt, 2004: p45). It can also be defined as an
early management capacity in the organization for rapid reallocation and re-formation of

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resources, processes and structures in response to change Outer (Bock, 2017: p6) and its
variants are investigated
1- Marketing flexibility
Market resilience is the first dimension of strategic flexibility known as (Abuzaid, 2014:
p168-169), which is the ability of the company to re-evaluate its marketing efforts in a
short period of time in response to environmental variables (Abbott & Banerji, 2003: p2)
Respond to customer requests, penetrate new markets and identify appropriate markets
2- Competitive flexibility
The ability of the company to resist the behavior of competitors in general and the new in
particular and their ability to easily rearrange and deploy their resources and their ability to
meet customers' demands and diversify their strategic options to compete effectively and
adopt processes of innovation and innovation (Abbott & Banerji, 2003:p3-4) During
competitive moves and diagnosing changes in their external environment.
Environmental uncertainties
Which is the environment in which the Egyptian pharmaceutical companies are living,
which is characterized by extreme complexity, scarcity of resources, increasing
competition and continuous change in the effects of environmental pressures on
pharmaceutical companies in Egypt. Environmental uncertainties are defined as one of the
outputs of environmental factors that result from the lack of information necessary to
evaluate relationships and the accuracy of decision making and assessment of outputs
(Huczynski & Buchanan, 2007: p51). Environmental uncertainty will be measured by the
variables proposed by Miller & Friesen, 1983: p221-235)

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1- dynamism: -
Indicating the difficulty of predicting change by environmental factors and predicting
innovations and competitors' movements in the environment of Egyptian pharmaceutical
companies
2- Hostility: -
It points to the potential threat faced by Egyptian pharmaceutical companies, which is the
scarcity of resources and the degree of competitors' ferocity
Full Assurance
Represents a situation in which the decision is taken with sufficient knowledge and
specific options with clear results. It is worth mentioning that the area of verification is low
in the business organizations. However, routine decisions can be taken according to this
approach.
The risk
This is a case in which the decision is made and the goal is clearly defined and the
information is incomplete, which makes the decision maker depends on the possibilities in
the decision, since the information available in this case is based on previous experience
and accumulation of knowledge of certain aspects and historical data of similar situations
help in determining the probability of success or failure It is referred to the possibilities of
personal or personal decisions and decisions need to benefit from the accumulated
experience and experience of the administration

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Thumb and total ambiguity:
The situation is characterized by a lack of clarity and where the goals are not clear to the
decision-maker and information is not available and sometimes called situations of conflict
and fierce competition and describe the problems and attitudes that represent the state of
thumb with evil positions and a conflict between the goals and alternatives and the rapid
change of circumstances and the absence of link between the elements of the resolution
Strategic decisions:
Are decisions that deal with the future long-term or short-term of all parts of the
organization and are characterized by scarcity, importance and guidance (Wheelen &
Hunger, 2008: p20).

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Chapter II
The theoretical framework of the study
and previous studies

14
(2-1): Introduction
Business organizations define their future vision for the situation they wish to reach after a
period of time by identifying problems, discussing them and finding the desired goals of
the organization (Wolfe, et al, 2017: p3-7). However, this contrasts with the uncertainty
that has become (Daft, 2006: p140 ) to control the severe lack of data and information on
the variables of the external environment and the elements of the internal environment,
which makes it difficult to develop strategic decisions that lead to success (Al-Zabby,
2009: p18) and confirmed (Al-Galabi, et al, 2006: p40) noting that most of the strategic
decisions in business organizations in the environment To represent contemporary cases of
uncertainty so it is one of the most important ways to reduce failures in such cases requires
a flexible strategy helps to minimize losses in case of non-validity of the decision
(2-2): The Environmental uncertainty :-
The environmental uncertainties of the basic business environment variables, which
directly or indirectly affect, are considered to be of great importance.
This has attracted the attention of researchers (Guzman, 2008, p195-212) , (Koh 2005:
p383-400) , (Dennis, 2006: p10-15) and (Charlebois & Camp, 2007: p252-267), which he
described (Jawad, 2000: p157-160) to the extent that it is difficult to predict the troubled
environment of the Organization.
A many of researchers agreed that environmental uncertainty is a major problem faced by
organizations and is the lack of information necessary to cope with the conditions and
situations prevailing in the business environment that are constantly changing (Liao & Tu,
2008: p39), Organizations should manage their business in an uncertain environment.
Managers should monitor constraints affecting the organization and its impact (Jones,
2007: p62-65), formulate strategies to protect access to resources needed by the
organization from the surrounding environment, as well as take precautions for rapid and
sudden environmental changes (Wilson, 2003: p120-128) As the rate of change in external
environmental factors Those factors that work in those organizations, dependents in simple
environment and semi relatively stable decreases the degree of environmental decision-

15
taker to make sure before, while the complexity of the environment and the lack of
persistence increase the uncertainty (Robbins, 1988)
It is also evident from the uncertainty that decision makers do not have sufficient
information on environmental factors relevant to the problem and are unable to predict
external variables (Kober, 1987)
Environmental uncertainty is also known as the gap between what organizations know and
what they need to know about the environment they deal with to ensure accuracy in
decision taking (Al-Salem & Al-Yassin, 2002)
Environmental uncertainty is one of the dimensions of the study of the external
environment that has a direct impact on the work of organizations. This led many
researchers to emphasize the need to expand the scope of research in the dimensions of
environmental uncertainty to identify their relationship and influence in the planning
process (Hill & Jones, 1995) And strategic decisions, particularly in defining strategic
objectives
(Huczynski & Buchanan, 2007) argues that high levels of environmental uncertainty are
related to lack of knowledge and insufficient information about decision alternatives and
their availability, which affects the ability of the decision taker to assess the outcomes
associated with each decision
(Wheelen & Hunger, 2012) notes that in order to understand environmental uncertainties,
the organization's management must identify these cases, identify their sources and how to
avoid them and take them into account when formulating strategies, making decisions and
reducing risks in managing their investments.
It can be said that environmental uncertainty is one of the most important challenges to be
dealt with by the management of the organization when managing all its activities at all
levels (Grover & Segars, 2005: p761), which includes a complex of forces that are
complex, overlapping, unstable and rapidly changing, Achieving a competitive advantage
(Dess et al., 2007: p5) The strategy-building approach was adopted by the organizations'
administrations to deal with their external environment and manage their environment and
internal resources together (Daft, 2006: p92).

16
He (Al-Khafaji, 2008: p209) believes that the organization must move from the logic of
traditional thinking to the logic of strategic thinking for the management of the long-term
future, which is characterized by a high degree of hostility, ambiguity and sudden change,
and stresses (Lin, 2006: p441),
The aggressive behavior of competitors makes it difficult to predict possible changes,
leading to high levels of environmental uncertainty that put pressure on the management of
organizations to respond effectively to these changes
(Bordia, 2004: p411), The state of uncertainty about future events is the most important
characteristic of environmental uncertainty. This view is consistent with what (Idris & Al-
Galabi, 2013) pointed out that the most important feature of environmental uncertainty is
uncertainty about future events related to the organization's relations the cause and effect is
in the environment.
Environmental uncertainty is a state of crisis that drives organizations to formulate
strategies to deal with and reduce their environmental impacts.
Some agree that the uncertainty arises from the many information in the same degree that
results in the scarcity of information where the two situations are similar. (Anderson, 1988:
p180) believes that the decision maker can have too many information and a variety of
decision-taking options.
Among them becomes difficult or impossible. The large increase in information hinders
the classification of such information or even determining what is useful. While (Ford, et
al, 1988: p401) asserts that organizations seek a reasonable amount of relevant information
Its activities are sufficient and make it able to work efficiently and effectively and it
accepts a level of uncertainty against the little remaining information of very high
efficiency
(2.2.1): The concept of environmental uncertainty
The concept of environmental uncertainty refers to insufficient information about the
environment in which the organization operates, which is reflected in the difficulties in
analyzing and evaluating the results associated with the decisions of the

17
organization effectiveness of the organization (Miles & Snow, 2003: p13). Environmental
uncertainty is defined as the uncertainty surrounding the elements of the business
environment and is likely to affect the objectives of the organization (Scott, 1992: p8).
According to (Salmala, et al, 2000: p11), organizations seeking to work and compete must
adapt to their environment, as the degree of clarity or ambiguity of business environment
variables affects the effectiveness of an organization's decision.
Therefore, the management of those organizations should be prudent in managing
environmental uncertainty and using appropriate tools to mitigate the risks of
environmental uncertainty.
In order to control cases of environmental uncertainty, the management of the organization
must study these cases and identify them and know their sources and how to avoid them
and be taken into account in the formulation of strategies and decision-taking as well as in
the analysis of risks that may affect the organization (Wheelen & Hunger, 2008: p18).
(2.2.2): Environmental uncertainty perspectives
The concept of environmental uncertainty can be categorized from several perspectives:
First Perspective: - The perspective of linking uncertainty to the decision-taking
situation
Recalling (March & Cyert; 1963: 118) that environmental uncertainty it is characteristic of
decision-taking processes in the organization since environmental uncertainty is linked to
the decision-making process and that the degree of environmental uncertainty varies
depending on the type of decision to be taken,
According to (Thompson, 1967: p11), it is the case that the decision-taker faces when
information on alternatives is unclear and insufficient due to rapid environmental change.
(Downey & Slocum, 1975: p562) argues that it is the psychological state of the decision
taker when accurately predicting the outcome of future decisions due to ambiguity and
insufficient information related to the external environment.
He was cited by (Schmidt & Cummings, 1976: 450) as the inability of the decision-taker to
control or accurately predict the results of the interaction between the organization and the
environment variables.

18
(Pefeffer & Salancik, 1978: 5) suggests that the inability of decision-takers to assess the
potential impact of environmental sectors on the selection of appropriate alternatives.
He also points out (Haynes & Massie; 1981: p46) that environmental uncertainty differs
from one decision to another.
Citation (Milliken, 1987) and uncertainty is defined as an indicator of an individual's
inability to accurately predict what changes are taking place in the environment around
him.
It described it as a psychological state related to an individual's psyche as levels of
uncertainty as he knew (Difonzo, et al, 1994) uncertainty as the psychological state of
doubt about what will happen in the future (Difounzo & Bordia, 1998: 296).
This is the circumstance in which the decision-taker does not have sufficient information
about environmental change (Narayanan & Nath, 1993: 206).
He explained (Daft & Noe; 2001: 542) that the situation in which the decision-taker has
difficulty in obtaining information on the external environment, such as that will affect the
Organization.
The proliferation of information generates a state of doubt in its validity or sufficient to
extract alternatives, and the scarcity of information generates a state of ambiguity towards
the future resulting in the end of uncertainty at the decision taker
There are three cases in which the decision is made:
Frist: The full certainty status
In this case, the decision-taker has a thorough knowledge of the environmental situation
surrounding the decision (Debian, 41: 2003) In fact, this is a purely theoretical case that
occurs only in ideal conditions.

19
Second: The risk status
In this case, the decision-taker does not have a full knowledge of the environmental
situation surrounding the decision.
He is aware of the possibilities of this case the decision-taker does not have complete
information but has information to enable him to estimate the probability of occurrence of
environmental conditions and in fact, this case is one of the least realistic cases.
Third: The uncertainty status
The decision-maker in this case does not have any information about the environmental
conditions surrounding the decision and cannot accurately predict what will happen. The
uncertainty is linked to the theory of decision-making in the light of information available
to decision-making, which is at a minimum, making it more difficult to analyze the
decision itself (Al-Masry, 2000: p256).
(Faucheux & Froger, 1995: p31) referred to two dimensions under which decisions are
made: probability and confidence, which constitute constraints to environmental
uncertainty, and that the intersection of these two dimensions results in the circumstances
surrounding strategic decision-making, as illustrated by the matrix shown in Figure (2-1)
 Certain: The probability is accurate and clear and confidence in the upper limit.
 Weak Uncertain: the probability is good and confidence is close to the upper limit.
 Strong Uncertain: the probability is unclear and confidence is close to the minimum.
 Ignorance: the probability is inaccurate and unclear and confidence at a minimum.
The following figure illustrates this relationship.

20
Figure 1:Figure (2-1) Limitations of Environmental Uncertainty
Confidence
Possibility
Minimum Rate
High Rate
Inaccurate
Ignorance Strong Uncertain
Accurate
Weak Uncertain Certain
Source: Faucheux, Sylvie & Froger, Geraldine, “Decision-making under
environmental uncertainty", Ecological Economics 15, ELSEVIER, 1995
Second Perspective: - Perspective of uncertainty on the part of the lack or increase in
information received from the environment of the organization.
From this perspective (Hickson, et al, 1971: P219) argues that environmental uncertainty is
the lack of information about future events expected to occur in the environment so that
alternatives and their consequences cannot be predicted.
(Anderson, 1988: P180) pointed out that environmental uncertainty may mean having too
much information or many alternatives and this makes it more difficult to choose the best
among them, the increase in information hinders the classification of that information or
determine what is useful.
(Ford, et al, 1988: 401) point out that organizations seek an appropriate amount of
knowledge that is relevant to their activities and sufficient to make them able to operate
efficiently and effectively and can accept a level of uncertainty in exchange for the
exclusion of weaker relevant information and activities

21
(Brugnach, et al, 2008) noted that environmental uncertainty refers to a lack of full
understanding or lack of knowledge of how the system can be managed. Uncertainty does
not mean lack of knowledge, but in the presence of a lot of information available new
knowledge generates uncertainty.
(Ben Habtoor, 2007, p157) explained that in order to maximize the benefits of conducting
the study of the external environment, it is necessary to determine the quality and sources
of access to information and determine the type of information to be collected and its
elements and what method of obtaining information and collected.
He defined it (Al-Naimi, 1996: p68) as a lack of information and an inability to know
exactly what will happen and when. (Hacth, 1997: p88) noted that environmental
uncertainty is the result of two forces: environmental complexity and the rate of change in
the environment.
Environmental uncertainty is an important variable in strategic management, indicating a
degree of change and unpredictability of the market environment
(Miller & Dess, 1996(.
(Priem, et al, 2002: p725) identified environmental uncertainty as an increase in threats
faced by the organization as a result of increased uncertainty, if the organization faces a
high degree of environmental uncertainty, it may resort to alliance with other organizations
to help them get more information about the elements of the environment in which they
operate.
According to (Buchanan & huczynski, 2007: p765), high levels of environmental
uncertainty are associated with a lack of knowledge, insufficient information on decision
alternatives, and their availability, this affects the inability of the decision taker to calculate
or estimate the results associated with each decision.
It is also the situation that makes organizations continue to look for ways to adapt to the
requirements that enable them to survive and win the competition
(Suardhika, 2011: p34)

22
In view of the above environmental uncertainty can be defined in two directions:
 The first is the ambiguity resulting from the lack of information required from the
environment surrounding the organization to make decisions related to the
development and implementation of strategies.
 The second is the situation resulting from the availability of information about the
environment surrounding the organization and the lack of poverty in the systems of
interpretation and assimilation of that information.
(2.2.3): The importance of managing environmental uncertainty
Environmental uncertainty management is one of the most important issues in the
contemporary business environment, due to the lack of data and information about the
external environment variables and elements of the internal environment of business
organizations, which makes it difficult to develop strategic decisions that take them to the
path of success.
In this sense, environmental uncertainty is among the most important external challenges
that business organizations are supposed to deal with and manage (Idris & Al-Ghalbi,
2012: p177)
(Ngamkroeckjoti & Johri, 2000: p331-337) noted that rapid changes in the business
environment led to increased attention to managing environmental uncertainty, monitoring
changes occurring in several key factors such as monitoring changes in customer demand
expectations, analyzing legal, political and social trends and finally monitoring activities
competitors.
According to (Lin, 2006: p441) high levels of environmental uncertainty are linked to the
persistence of environmental change and hostile behavior of competitors.
This leads to difficulties for organizations to predict and predict potential changes in the
environment, and high levels of environmental uncertainty put pressure on management.
organizations and how to respond and adapt effectively to this environmental pressure.
While (Maheran & Muhammad, 2006: p1) attributes the importance of monitoring and
managing uncertainty to be considered the first step in a series of activities that lead to
adaptation or adaptation to the environment is a fundamental and important step to

23
understand the environmental changes, such as helping managers to adapt their
organizations according to it is a communication Internally for external information on
problems that are bound to affect decision-taking in the organization.
For organizations to operate in an uncertain environment, managers must monitor the
environmental forces that affect them
On the activities of the organization (Jones, 2007: p62-65) Then, design strategies to
protect access to the resources the organization needs from the environment as well as find
ways to guard against sudden environmental changes (Wilson, 2003: p120-128)
In order to accommodate environmental uncertainties, management must identify these
sources, know their sources and how to avoid their impacts, and take them into account in
strategy formulation, decision-making, and risk management in their investment
management (Wheelen & Hunger, 2008: p18)
(Wheelen & Hunger, 2007: p73) explained that the department of environmental
uncertainty enables the organization to identify potential opportunities and threats in its
external environment and to monitor the strengths and weaknesses of its internal
environment collect and evaluate information from the external and internal environments
to avoid strategic surprises such as ensuring the sustainability of the organization.
He explained (Baltzan, et al, 2009: p17) that organizations that try to develop their
competitive advantages should pay great attention to competition through environmental
monitoring, such as the management of uncertainty, through the acquisition and analysis of
events and trends in the external environment and that information technology has a great
opportunity to play a role Important in the collection and analysis of information and let
management uncertainty.
Based on the above, we can summarize the importance of environmental uncertainty
as follows:
1. Due to the rapid change in the business environment, environmental uncertainty is a
variable that represents one of the biggest challenges.
2. Because environmental uncertainty is linked to ambiguity, it is a threat that causes
organizations to respond effectively and adapt to the pressures of this threat.

24
3. Decision-takers are required to monitor the environmental forces affecting the
organization and thus enable them to formulate appropriate strategies that protect the
organization and avoid risks and help them to survive.
4. Decision takers are encouraged to work out some ways to deal with uncertainty within
the context of work.
5. Makes organizations interested not only in collecting information, but also in
activating systems of interpretation and assimilation of such information.
6. The main pillar of many of the approaches adopted in the strategic planning that leads
to the identification of the strategy that will lead to build the distinct position of the
organization in the market through its knowledge of the resources and capabilities that
represent its strengths and investment to exploit the opportunities available and
achieve sustainable competitive advantage
(2.2.4): Environmental uncertainty management approaches
In depth analysis of environmental uncertainty shows several approaches to
managing environmental uncertainty (Courtney & Viguerie, 1997: p73) proposed the
four-level approach to identifying and managing environmental uncertainties and
making decisions with greater awareness and confidence these levels are shown in
Figure 2-2.

25
Figure 2: Figure (2-2) The four levels of environmental uncertainty
1
A bright future
A clear prediction leads to a sufficient
realization of the future to define and
formulation accurate strategy
2
Future alternatives
Recognizing the future as one of a group
sMultiple and possible access scenario
3
Extent of the future
See the future through an unspecified
Extent of There are no separate scenarios
The strategy will change as soon as any
alternative is predicted
4
Real mystery
Uncertain multidirectional environmental
assurance is impossible Predicting its
output or the number of probabilities or
Expect scenarios which is rare
Source: Courtney, H.; Kirkland, J. and Viguerie, P., (1997), “Strategy Under
Uncertainty”, Harvard Business Review, November-December: 67-80.
1
2
3
‫؟‬

26
The proposal (Parnell, et al, 2000: p525) refers to adopting the strategic approach to
managing environmental uncertainty by analyzing the environment of the organization and
building a set of expected scenarios, analyzing alternative scenarios, examining the
sensitivity of forecasts with changing environmental elements, selecting the appropriate
strategy, and determining the procedures for their application. Commensurate with the
level of environmental uncertainty encountered the organization.
The proposal (Grote, 2004: p269) proposes two main approaches to managing
environmental uncertainty:
1. Reduction of Environmental Uncertainty Approach,
which is based on the scientific management approach which assumes that environmental
uncertainty can be designed outside the organization, by describing the work processes and
processes in precise detail, and making great efforts in supervising and ensuring full
compliance with the application of these procedures literally.
2. Coexistent Approach.
It is based on the humanist school which assumes that organizations adopt transitional
processes in dealing with the environment and develop their capacity to deal with various
types of uncertainty through testing the degree of privacy, form of coordination and
cooperation, and the degree of decentralization in the decision - taking process.
When faced with the organization high levels of uncertainty Characterized by these levels
of turbulence and rapid change, the management of an organization must be able to
respond quickly, balanced, adapt and cope with unexpected environmental changes (Koh,
et al, 2005: 385).
(Phlips, 2005: p32-38) referred to the group tools considered as approaches to managing
environmental uncertainty and mitigating its effects:

27
1. Sensitivity Analysis approach
By studying the possibility of assessing the variability in the outputs of the organization in
quantity and quality and linking them to different sources of variance, and evaluating the
results under multiple proposals.
2. Decision Support Systems Theory approach
By establishing a knowledge database and prediction models, and providing managers and
decision makers with information in a rational way through the fuzzy logic approach to
obtain situations similar to the current decision.
According to decision-making theories, environmental uncertainty affects the decision-
making process as the center of the organization's tasks, and the complex and uncertain
situations it faces about its outputs (Huber & Mc Daniel, 1986: p579). Decision-making
can result in several errors due to the absence of accurate information especially at high
levels of environmental uncertainty (Daft, 2004: p144).
3. Communication Improvement approach
By establishing effective communication channels between all stakeholders by providing
information that reduces environmental uncertainty.
4. Increase Basic Data Groups portlet approach
By focusing on areas where information is lacking or insufficient and establishing data sets
to feed them.
5. Control input approach
Following the changes in the components of the environmental factors and elements of the
go-ahead and find models predict future movements such as time series model.

28
6. Research & Development approach
Defamation results from the adoption of long - term strategic plans to predict the future
and anticipate its events based on applied studies, practical rules and advanced statistical
models.
7. Situation Scenario Worse approach
Scenarios are prepared that include the probability of future events, focusing on the worst
possible scenarios, and developing strategies to deal with such situations.
(Wheelen & Hunger, 2010: p157) pointed to the use of the Priority Matrix of Problems as
an approach to managing environmental uncertainty and considering it as one of the means
to know and analyze the developments of the external environment, which are illustrated in
Figure (2-3), which includes the following steps:-
1. Know the number of potential trends emerging in the mission environment and the
general environment, which are strategic and important environmental issues because
if they occur, they determine what the industry looks at in the future
2. Assess the likelihood of these trends actually occurring from low to medium to high.
3. Try to confirm the potential impact whether is low or high for each of these trends.
The preceding matrix can be used to help managers decide which environmental trends
should be examined, which are considered to be of high priority and which trends should
be monitored and which are considered to be of low priority. It is useful to discover
opportunities and threats that are considered as risks and challenges facing organizations.
Develop a system of specific priorities or priorities in order to identify the importance of
each environmental factor that threatens the organization with the aim of directing efforts
to seize opportunities. The importance of opportunities and threats can be determined as
follows:(AL-Enzi, 2016, p187)

29
Figure 3: Figure (2 - 3) Matrix determining the precedence of the problem
Probability of impact in the organization
Low Medium High
Medium precedence
High precedence
High precedence
Probability
of
occurrence
High
Medium
Low
Low precedence
Medium precedence
High precedence
Low precedence
Low precedence
Medium precedence
Source: Wheelen , Thomas L. & Hanger J. David, "Strategic management and
Business Policy: Achieving Sustainability ",12th Edition, Pearson Prentice Hall, New
Jersey, 2010:157.
The importance of opportunity or threat to the organization
=
Potential impact of each opportunity or threat in the performance
of the organization
×
The possibility of the opportunity or threat

30
(2.2.5): Environmental uncertainty management requirements:
pointed out (Berger & Calabrese, 1975) in the "Theory of Environmental Uncertainty
Reduction" indicates that uncertainty is reduced through the collection of more
information, and the higher the level of uncertainty, the greater the incentive to collect
information. It requires organizations to develop well - defined strategies and objectives to
manage environmental uncertainty, within specific time frames, and to provide them with
the necessary information first to ensure their success.
The formulation of strategies for managing environmental uncertainty requires
consideration of uncertainty related to the diagnosis of environmental changes and their
potential negative effects, uncertainty associated with political, economic and social
factors, and risks associated with creative behavior (Janicke & Jorgens, 2000: p615).
As a requirement for managing environmental uncertainty (Dess, et al., 2005: p43) pointed
to the successful monitoring of the external environment of organizations to predict
environmental changes from their sources and to predict current changes under any
direction, this would be an indicator of the organization's critical trends and events before
they evolve and perceive their risks. Before competitors distinguish it.
To ensure the organization's success in an environment of uncertainty, environmental
monitoring must be managed through a harmonized combination of technology, skills and
knowledge (Raghu & Vinze, 2005: p1-5).
(Xu & Kaye, 2009: p11) points out that environmental monitoring is an essential process
for any organization to manage environmental uncertainty by obtaining information from
the external environment to be used to identify and identify problems, investigate
opportunities, and take decisions.
(Voros, 2009: p11-12;15) has found that continuous monitoring of the external
environment tracking and transition between components is one of the most important
requirements for managing environmental uncertainty. This is a kind of early warning
system for decision takers that an organization strategy may need. to reorient the
adaptation of an accelerated environment, organizations must manage environmental

31
uncertainty by developing their policy and enhancing research, cognition, innovation and
the ability to identify the causes of problems very seriously.
(Chiara, 2010: p479) emphasized that environmental uncertainty requires a more flexible
approach to analyzing the situation of organizations. Therefore, one approach to all
situations is not enough and most industries will face strategic problems with varying
degrees of environmental uncertainty over time. These organizations align strategic
analysis with anticipated environmental uncertainties.
(2.2.6): Environmental uncertainty strategies:
Recent changes in the concept of environmental uncertainty have led to the emergence of
strategies to manage environmental uncertainty, so we can say that environmental
uncertainty leads to engage in strategies to address uncertainty to reduce or reduce,
uncertainty is not meant not only lack of knowledge but includes unpredictability and
mystery.
Strategies for environmental uncertainty fall into four categories as indicated
(Raadgever, 2011: p67-69):
1. The strategy of ignoring uncertainty:
It is not to take any prior action to manage uncertainty, and is used when the decision
maker does not know where uncertainty exists or may not be aware of it at this time. That
is, the establishment and implementation of strategies within a time frame until the
detection of adverse events that were not taken into account as vague and surrounded by
uncertainty.
At the organizational level, the business unit is similar to the defender strategy, which is
characterized by the assumption that the environment is stable and supportive of the
organization, which does not motivate them to expand in the search for new areas of work
or change the strategy followed, as organizations rely on the expansion of existing
Products and services, and retention of its customers (Qariouti, 2009: p390) as well as

32
modest interest in the development of its products and the scarcity of its need to make
fundamental adjustments in production technology, organizational structure and working
methods, where it tries to control specific aspects of markets within the industry.
For which organizations and do what they can to protect these markets and maintain a
stable growth in which to take advantage of the bulk of the investment potential in the
development of the efficiency of their internal operations and to achieve profits through
price competition (Rashid & Gulab 2008: p305)
Defenders, while less concerned about the environment, direct their efforts, abilities, and
skills to master the planning of how to obtain a competitive advantage in price and quality.
The outcome is an organizational structure with high horizontal integration, centralized
control and extensive communication between organizational units (Al-Salem, 2008: p82)
2. Knowledge Generation Strategy:
It contains an environmental uncertainty assessment strategy used in academia to control
environmental uncertainty by identifying, classifying, quantifying and prioritizing
environmental uncertainty from reducing cognitive uncertainty.
The strategy for reducing cognitive uncertainty is through the development and monitoring
of indicators, data collection, experiments, simulation models such as qualitative and
integrated assessment, expert opinions and scenarios to test alternative strategy
performance among several strategies.
The performance of proven alternative strategies through scenarios and under several
consistent and reasonable images illustrates how to explore the future (van der Keur, et al,
2008). When making an important decision, the decision maker tries to access all available
information and find useful information that may not be readily available.
(Clemen & Gregory, 1995: p21) classify environmental uncertainty as a level of
knowledge expressed in several questions, such as what the future involves. And how will
it be?

33
There are different degrees of environmental uncertainty about different issues and
situations.
Time and effort uncertainty can be reduced by acquiring sufficient information and
identifying reliable sources of information that can reduce uncertainty.
3. Interaction Strategy:
It contains several strategies, namely communication and aims to transfer knowledge from
the sender to the future using multiple means, and convincing communication by
persuading individuals in an attractive and worthy manner and dialogue or civilized
learning is done through an open dialogue with all parties to reduce ambiguity as forms of
dialogue learning as a good strategy To reduce ambiguity, increase understanding and
trust, support management procedures, reduce workers 'resistance to procedures and better
understand others' perspectives through dialogue and encourage learning on all sides
(Hanssen, et al, 2009: p43). And negotiate to bring the views closer, and keep the
contradictory methods of work from each other not to be subjected to the imposition of a
member of his opinion by force in the sense of reaching a mutually beneficial and
complementary agreement that is understood by multiple views
(Nobre, et al, 2011: p337) suggests that the organization can reduce uncertainty levels
through its interaction with the environment through its strategic capabilities and internal
and external incentives that can affect the organization's competitive advantage. Strategic
capabilities are the resources and capabilities that the organization needs to survive and
succeed.
Dynamic capabilities are the capabilities of the organization to innovate and develop its
strategic resilience to meet the demands of a changing environment.
All organizations to survive and thrive in a competitive business environment need to have
a certain level of strategic capability. The type of strategic capability that organization
needs at a given time is determined by analyzing the strengths, weaknesses and
opportunities of threats in the future work environment (Ansoff, 1984: p177).

34
(Johannesson, 2010: p5) pointed to the interactive approach to capabilities and strategy in
the sense that capabilities interact with strategy to continue or anticipate future
environments.
4. Confrontation strategy:
The organization is expecting the worst-case scenario, preparing scenarios, and relying on
flexible solutions by choosing the organization 's flexible management strategies that can
be adapted to future changes.
The coping strategy is one of the factors of success of the organization as its response to
environmental uncertainty will help the organization to understand its climate (Watson,
2004: p19).
This strategy includes three sub-strategies
First, the preventive strategy, i.e. preparing for the worst by identifying possible
negative consequences and monitoring the damage to the worst.
Second: adopting health solutions i.e. adopting strategies that perform well under
multiple scenarios. This may mean adopting multiple actions in the sense of
diversifying solutions to ensure that one or more of the possible scenarios will be
effective (Pahl-Wostl, 2007).
Third, developing flexibility by adopting flexible solutions that can adapt to future
changes may include the adoption of practical measures within the time frame to
detect the possibility of damage that actually prevents or mitigates that damage
(Raadgever, 2011: p72)
Under this strategy, organization is strategically allied with another organization to reduce
the risk of environmental uncertainty to develop a new product or technological standards
(Issawi, et al, 2012: p55)

35
(2-2-7): Dimensions of environmental uncertainty:
(Mintzberg, et al, 1998: p33) Dimensions of environmental uncertainty according to the
four characteristics of the organization's environment are stable, complex, diverse and
hostile,
(Dequech, 2006: p113) distinguishes between two types of environmental uncertainty, the
mysterious and fundamental, where ambiguous environmental uncertainty is associated
with probabilities and arises from a lack of information on what matters to the organization
and can anticipate future events and predict the probability of their results.
The main environmental uncertainty is related to the possibility of unexpected innovations
and unlimited structural change and that future events are unpredictable.
Whereas (Charlebois & Camp, 2007: p255) emphasized the importance of the level of
environmental uncertainty faced by decision-makers in the organization as a result of a
lack of knowledge about the outputs of potential and possible alternatives.
These dimensions are related to the horizontal integration of the organization,
namely:
1. The absorptive capacity of the environment and indicates the inadequacy of inputs and
outputs of resources, their circulation in the environment, scarcity of resources and
weakness in seizing opportunities.
2. The dynamics of the environment and indicate the degree of change or disruption of
environmental activities associated with the operations of the organization
3. The complexity of the environment the complexity of management knowledge and
understanding of environmental requirements or the total number of environmental
factors that the organization needs to analyze.
(2.2.8): Environmental Uncertainty Measurement
Measuring environmental uncertainty is not new. A number of researchers have focused on
its importance (Hufnagel, 1987: p263), (King & Grover, 1991: p293),

36
(Delone & Mclean, 1992: p60) and (Priem, et al, 2002: p725) as it directly affects the
effectiveness of decision taking in organizations.
(Emery & Trist, 1965: p22) developed a number of measures to determine levels of
environmental uncertainty.
The organization rate of change indicator was adopted to measure environmental
uncertainty,
While (Downey, et al, 1975: p726) identified environmental the change in the speed of
growth, the perceived degree of competition and the volatility of prices and sales.
also, a model for measuring environmental uncertainty developed (Werner, et al, 1996:
p571-588) based on six areas:
1. Environmental uncertainty associated with government policies
2. Environmental uncertainty associated with macroeconomics
3. Environmental uncertainty associated with the resources and services used by the
Organization
4. Environmental uncertainty associated with demand and products marketing
5. Environmental uncertainty associated with competition
6. Environmental uncertainty associated with technology in the same sector of the
Organization
While (Miller & Friesen, 1983: p221) specified the dimensions of the measurement of
environmental uncertainty in three dimensions are kinetics, heterogeneity and hostility
where:
1. Dynamism :
-
The concept of kinetics refers to the difficulty of predicting the change of
environmental factors and predicting the creativity and movements of competitors in
the environment of organizations. The kinetics can be viewed through two important
dimensions, namely, prediction and change.

37
In response to market changes and other developments (Daft, 2016: p62).
(Al-Enzi, 2016: p189) indicates that the dynamics of the environment is a function of
the extent and speed of changing factors in the environment of the organization or
forces in the public and private environment over time, which increase the
environmental uncertainty faced by the organization.
The environment is stable if the factors or forces influence the processing of resources
in a predictable manner, and are dynamic or unstable if the organization cannot predict
how these factors or forces change over time. Organizations operating in a dynamic
environment should seek to reduce environmental uncertainty through environmental
prediction.
2. Heterogeneity :
-
Effective decision-taking in an environment of uncertainty characterized by
complexity and diversity is a critical success factor for organizations because
complexity and ambiguity in a rapidly changing environment weaken and hinder the
decision-making process. Accelerated environment in the organization.
3. Hostility :
-
Hostility is in the form of unexpected behaviors or detrimental to the interests of the
organization and reputation of the parties with which the organization deals.
Organizations also face competitive, hostile behavior by elements of their external and
internal environment.
For resources, resulting in mistrust and conflicts that extend to decision makers and
the negotiation process.
These dimensions are what have been adopted two of them, namely dynamic and
hostility by the researcher to measure environmental uncertainty. Rapid changes in the
surrounding environment and ensuring the existence of open lines of communication
with sources of access to vital information from their environment and explore the
technological horizon and investigate any changes in them and get feedback from
suppliers and customers.

38
(2-3): The Strategic flexibility
One of the most prominent features of the modern era is the tremendous developments in
human knowledge, and the consequent process of continuous change in the methods and
methods of doing business, to meet the ambitions and challenges of the parties involved in
the performance of business with the utmost total quality and standards, to reach distinct
outputs, which necessitates analysis and improvement.
Continuous review of strategic plans, re-engineering of existing business systems and
models, in addition to human resources development, to meet the processes of
improvement and adaptation to their requirements.
The design and adoption of the strategy in the organization is the result of strategic
planning, and has increased in recent years the use of the concept of strategic planning
within the modern management concepts that must be adopted and applied in its
administrative work if it is to achieve the objectives for which it was established and
ensure the continuation and survival, and this need To strategic planning nowadays is
dictated by the strong competition conditions faced by the organization in both the internal
and external market (Masada, 2013: p78)
)2-3-1): The concept of strategic flexibility:
Flexibility has become a key theme in the modern business environment to reflect the rapid
change in technology aimed at reducing product turnover time. The emergence of the
concept of flexibility in 1970 is the result of disciplines
Flexibility requires managers to find the right and appropriate balance between allocating
the necessary resources, to proceed with the implementation of a particular decision and to
avoid investing large funds in limited-profit projects (Shimizn & Hitt, 2004: p44)
To achieve strategic flexibility, managers must overcome cognitive inertia and increase
organizational awareness of knowledge as well as the ability to absorb it (Antonio, & Jose-
Maria, 2009: p561)

39
Flexibility refers to the multiple capacity of the monitoring or sensing system (Ali, et al,
2014: p379) in the operational areas of the organization is able to monitor changes in the
work environment remotely and adapt to their changes flexibility
(Sanchez, 1995: p135) is seen as the system's ability to maintain its dynamic balance and
efficiency. This interpretation speaks of internal control and the ability to maintain the state
of the system in the presence of changes. Resilience is closely linked to adaptation and
resilience creates an alignment between the organization's internal system and external
environmental changes that can cause system disturbance (Ali, et al., 2014: p379)
Flexibility helps to protect organizations from destructive change (Shalender, 2014: p3)
and also through resilience, the organization is able to cope with the risks it faces
(Radomski, 2015: p20). The concept of strategic resilience differs from the concept of
resilience in its comprehensive sense. Strategic flexibility is linked to several aspects of
strategic importance to the organization (Zaatari, 2013: p25) and has a significant impact
on the performance of organizations in a turbulent and unpredictable environment (Ginn &
Lee, 2006: p111)
) Combe, et al, 2012: p1320) noted that an organization in a very complex and dynamic
situation requires the design of a flexible system to respond to changes in the market.
Strategic resilience (Shah, 2013: p5) described it as “dynamic capacity, absorptive
capacity”. In the market.
It is essential that the Organization has the capacity to change and that this is through
flexibility. Information as the infrastructure and infrastructure to accommodate information
systems (Gleeson, 2004: p3(.
As a result, strategic flexibility has emerged as a capacity in itself as an engine of
competitive advantage (Nilsson, 2014: p16).
Strategic resilience is the ability to manage economic and political risks by responding
quickly and proactively or interactively to market opportunities and threats (Grewal &
Tansuhj, 2001: p72).

40
Strategic flexibility is expressed as the ability of the Organization to identify major
changes in the external environment and to provide resources for new work in response to
changes and to act when the time is right (Bao, et, al, 2008: p14)
(Mathyssens, et at, 2005) sees flexibility as the ability of an organization to change or
respond to low-return risks in time, effort, cost or performance.
(Hitt, et al, 2011: p13) defined it as a set of possibilities that are used to respond to the
diverse opportunities found in a dynamic competitive environment and to address the risk
of associated uncertainty.
(Wheelen, et al, 2012: p13) explained that it is Organization ability to shift from one
strategy to another, while (Singh, et al, 2013: p1442) explained that it is the organization's
ability to respond, adapt or adjust in turbulent market conditions with the support of its
resources and capacity to maintain Competitive advantage.
(Nelsson, 2014: p14) pointed to strategic flexibility by continuously interacting between
two contradictory concepts of strategy and flexibility, and thus the concept of strategic
flexibility is to understand the interaction between change and stability.
(Rodomska, 2015: p19) is a modern property that allows organizations to prepare for
largely unpredictable changes in their operating environment.
It was defined by (Srour, et al, 2016: p373) as the capacity readiness of the Organization.
(Bhandari, et al, 2004) points out that a distinctive feature of the organization is its ability
to link its management and external environment factors, and that the concept of strategic
resilience refers to the ability of organizations to develop new products, enter new markets
and new industries, not the concept of flexibility.
It focuses on the organization's ability to adjust the size of its products according to
changing market requirements.
According to (Kastsuhiko & Hitt, 2004: p44), the concept of strategic flexibility is the
ability of the organization to determine changes in the external environment and the speed
of its response.

41
According to the strategic approach, you know that it is the ability of the organization to
offer a wide variety of products, which in turn leads to increasing customers, and it also
measures how the organization is rushing to be able to shift its processing from making an
old product line to producing a new product line .
According to the Cognitive and Valuation Approach, it is defined as the ability of an
organization to skillfully find appropriate solutions and take the reaction to recognize and
evaluate alternatives and find solutions that are compatible with them to mitigate the
threats they face and exploit opportunities in a fierce dynamic competitive environment
(William, et al, 2008).
(2-3-2) :Importance of strategic flexibility:
(Yonggui & Hing-po, 2004: p34-59) showed that organizations recognized the importance
of strategic flexibility for their ability to achieve a new competitive advantage,
For several reasons, including:
1. Strategic flexibility is a prerequisite for increasing the ability of organizations to cope
with important and rapid environmental changes occurring rapidly in markets
efficiently and effectively, and to enable them to manage their activities under these
circumstances, and that it is necessary to adopt them to manage the state of continuous
change in the market of high-tech products in the uncertainty.
2. Enhance the ability of organizations to enhance their performance in predicting near-
and long-term future changes (Arief, et al, 2013: p61) and their capacity to respond to
changing customer needs and desires, to detect any customer preferences, and their
interest in the organization's marketing capabilities through the interaction process.
Between them and their customers.
3. Contribute to increasing the ability of organizations to offer their products in multiple
markets, and increase their ability to generate real value for customers, and to make
the organization responsive to any change in the changing demands of customers,
which is important for the growth and survival of business organizations, and is
interested in generating opportunities for the organization to improve the quality of life

42
of the layers of society Among the many growth options, there are three main
alternatives: geographic areas, product or service and value added expansion.
4. Strategic flexibility is associated with a creative culture that reduces resistance to
change and reduces structural complexity that facilitates attention to new opportunities
(Bock, et al, 2017: p6).
5. Helps the flexible use and coordination of internal and external resources to support
knowledge management skills within the organization (Kamasak, et al, 2016: p130(.
6. The positive effects of technological capacity for exploration are enhanced. When
strategic flexibility increases, technological capacity for exploratory creativity
increases (Zhou & Wu, 2010: p547).
(2-3-3): Strategic flexibility dimensions:
For the purpose of determining the types of strategic flexibility owned by the organization,
they are measured by certain types of flexibility, which are considered as indicators that
indicate this flexibility. (Abbott & Banerji, 2003: p8) presented three sub-types:
1. Marketing flexibility: which refers to the company's ability to rapidly modify its
marketing efforts in a dynamic environment.
2. Productive flexibility: This refers to the ability of the company to manufacture or
provide fast delivery of goods and services competitively priced in most of the major
markets in the world.
3. Competitive flexibility: The company's ability to compete in a volatile and unstable
environment.
(William, et al, 2008) presented five types of flexibility to reach strategic flexibility in
organizations:
1. Operational flexibility: the flexibility of an organization's production or operations.

43
2. Flexibility of human capital: the ability of the organization to work through non-
hierarchical organizational structures and commitment to a flexible organizational
culture through knowledge sharing, comprehensive job training management and non-
traditional business processes.
3. Flexibility of information: is the ability of the organization to obtain information
required from information systems, which is divided into flexibility to reporting
flexibility, which is the ability of the organization to explore and see the relevant
information and analytical flexibility, which means the ability of the organization to
extract and use the old data from its archive for analysis and decision support.
4. Flexibility of the processing chain: The ability of the organization to delete, add and
exchange information with its external processing chain partners efficiently.
5. Financial Flexibility: The Organization's financial capacity to absorb the cost of
achieving strategic flexibility.
According to (Evans, 2007: p130), strategic flexibility consists of a number of implications
that involve the development of strategies to suit the environment in which it operates in
terms of adaptability, lightness, correction, modification, flexibility, activation, softness,
shock tolerance and flexible and elaborate retreat.
The fact that strategic flexibility is critical to the success of business organizations is
therefore natural focus on them by senior management of large organizations,
(Lindgren & Bandhold, 2003: p18) noted that improving the strategic flexibility of the
organization can be achieved by focusing on three main dimensions:
1. Thinking: Usually contributes to strengthening the capacity of the organization to
make the changes required by other organizations, and that thinking requires
environmental analysis and the development of alternatives and possible scenarios to
take advantage of opportunities and strengthen the strategic capabilities of the
organization.

44
2. Skill: Role-playing, it allows the organization to derive broad visions and activate the
spirit of initiative and action by emphasizing innovation and creativity, and if the
organizations distinguished in thinking possess the ability to explore the future in
theory, this dimension in role-play and embodies practical capabilities and
experimentation of products and services and thus the formation And configure and
build the desired future.
3. Investment: enables the organization to obtain front and back feeds that support its
strategic choice through a strong organizational culture reinforced by sound regulatory
frameworks.
(De Toni & Tonchia, 2005) identified four competitive dimensions of strategic flexibility:
1. Responsiveness: The ability to respond quickly to customer and market demands, and
to quickly introduce new ideas and techniques into products.
2. Consistency: The ability to produce a specific product successfully meets customer
expectations and the ability to predict and respond to new customer needs and desires.
3. Adaptability: The ability to instantly adapt to many different working environments.
4. Creativity: the ability to generate new ideas in order to create new sources of value.
(Lomash & Mishram, 2003) emphasized that strategic flexibility could fall under four
Patterns, according to two main dimensions:
1. Diversity: Diversity gives the organization the possibility to act within a broad range
in the face of environmental pressures. For example, diversity is linked to the
organization's ability to respond to different market needs through the development of
broad product lines;
2. Speed: the ability of the organization and its ability to meet the needs of change in the
environment at high speed, which means less time required for a particular action, so

45
speed is linked to the repetition of rapid redesign of production systems in response to
the requirements of new products
(Bhandari, et al, 2004) identified the main dimensions of strategic resilience in the current
economic environment in three dimensions:
1. Flexibility in product delivery
2. Flexibility in technology
3. Flexibility in dealing with other organizations
Although the diversity and speed of competition are two different dimensions, they also
influence each other. The management of the organization is supposed to take into account
the nature of the overlap between these two dimensions to adopt a certain level of strategic
flexibility that gives the organization the best possible strategic performance.
(De Toni & Tonica, 2005) noted that the dimensions of strategic flexibility can be studied
in four categories:
1. Scope of strategic options.
2. New business diversity.
3. The speed of variation in the priorities of competition.
4. The speed of movement from one action to another.
(2-3-4): Strategic flexibility measures:
Strategic flexibility a fundamental dimension of resilience throughout the organization, it
acts as a shock absorber, anxiety or threat to the organization and this proactive behavior
depends on the degree of threats (Atwa, 2013: p45-46)

46
(Evans, 1991: p96) noted that strategic resilience consists of several senses involving the
development of strategies adapted to the realities of the environment in which it operates in
terms of resilience, agility, adaptability, resilience, resilience, liquidity, activation, and
flexibility. withstand shocks, flexible retraction, and rotation.
(Stalk, et al., 1992: p57) categorized the dimensions of strategic resilience to speed,
stability, sharpness, lightness and creativity.
In their study, (Bhandari, et al, 2004) identified the strategic dimensions of flexibility in
the economic environment into three dimensions: flexibility in product delivery, flexibility
in technology, and flexibility in dealing with other organizations.
(Beach, et al, 2000), (Awwad, 2009) and (Jubouri, 2015) agreed to identify four
dimensions of strategic resilience: productivity, competitiveness, market flexibility, and
human capital.
In order to develop effective strategic resilience capabilities, it was suggested (Abbott &
Banerji, 2003: p2) that the organization needs three dimensions of strategic flexibility
(market flexibility, productivity flexibility, competitiveness flexibility) as follows: -
1- The first dimension of market flexibility:
The ability of the organization operating in the market to reassess its marketing efforts
within a short period of time, in response to environmental variables (Al-Sheikh, 2010:
p22) and that what reflects the organization's ability to manufacture and modify its
products according to customers' demands in different markets in which the organization
deals Market flexibility, when the response is great
1. Customers in different markets where the organization deals are very different needs
that are not met by simple modifications.
2. When quality systems require product adaptation.
3. When different ways of supplying finished products to customers.

47
Responding to market requirements and customer concerns, such as providing after-sales
services, product maintenance, or the ability of a product to meet the psychological desires
of customers may be an important source of market flexibility. Market strategies that the
organization can follow to move between strategies can help. Choosing an appropriate
strategy and achieving a sustainable competitive advantage requires careful assessment of
the strengths and weaknesses identified by the organization for the success of the chosen
strategy.
Market flexibility is the first dimension of strategic flexibility as it is defined as the ability
of the organization (Abuzaid, 2014: p168) as the ability of the organization to respond to or
influence market changes.
(Grewal & Tanshuhaj, 2001) defined market resilience as the ability of the organization to
reassess and adjust its marketing efforts in a short time to respond to changing
circumstances of the business environment. Market resilience consists of the following
dimensions:
1. Market share. Response
2. Quickly for customer requests.
3. Access to new markets.
2- The second-dimension productivity flexibility :
-
It is the second dimension of strategic flexibility which reflects the company's ability to
produce or introduce goods or services in most markets.and at competitive prices over a
short period of time.
Productive flexibility is the ability of the organization to introduce new products, and
productivity flexibility represents the ability of the organization to modify its products in
the markets in which it deals with a short time at competitive prices (Sheikh, 2010: p. 22(
(Esturilho & Estorilio, 2010) stated that the flexibility of the new product represents the
quantity and variety of products that can be provided by the production lines and the

The relationship between environmental uncertainty and strategic decision taking in the presence of strategic flexibility as a variable mediator

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