Giobalization, Addresing aVUCAenvironment with a Bottoms - Up Approach 17

Chapter
Globalization, Addressinga VUCA Environment with a
2 Bottoms-UP Approach
(Volatile.Uncertain. Complex and Ambiguous time)

2.1 VUCA (VOLATILITY, UNCERTAINTY, COMPLEXITY, AMBIGUITY)

....(M.U. Nov. 2017) (5 marks]

........M.U. Nov. 2018) [5 marks]
..(M.U. Nov. 2019) (5 marks]
Volatility, uncertainty, complexity, and ambiquity, or VUCA, are characteristics that make a
situation or condition chalenging to evaluate, respond to, or plan for. Aleader's strategic talents
can be substantially enhanced by knowing how to counteract certain traits, which will provide
better results.

This abbreviation was created by the US army in the 1990s to denote the operational
environment following the Cold War.
The trait of being volatile is being open to frequent, quick, and considerable change. Large
changes may be triggered by small events. Commodity prices, for instance, may increase or
decrease significantly over a brief period of time in a volatile market, and a trend's direction may
abruptly change.
When events and results are unpredictable, uncertainty results. The relationship between
case. The
the causes and effects is unclear, therefore prior knowledge may not be relevant in this
difficult to predict
future course of events is uncertain; in a volatile market, for instance, it is
whether and by how much prices will increase or decrease.
may be
Numerous problems and elements are involved with complexity, some of which
to one
intimately interwoven. It's challenging to comprehend how things and people relate
area in the
another. Unintentional alterations to other objects could result from a change in one
future.
ambiguity.
Lack of clarity and difficulties understanding the specifics of the situation shape
circumstances are unclear, all the facts
It's possible to mistake or misinterpret information. When
are murky.
Volatility -
1 It is the accelerating rate of change.
2 Increasingrate of change.
 18 StrategicI Management (M.M.S.
3. Liable to change rapidly and unpredictably, especially for the worse. Sem.l
Sudden contact changes.
b. Changes in commissioning
C Changes in partners.
Rate and phase of policy changes.
e.
Changing social norms.
Uncertainty
1 Lack of predictability.
2 Less clarity about the future.
Don't know what to expect.
4 Plans ambushed by surprises.
5 Unclear about present/future.
Complexity
1. The
interconnectedness of cause and effect forces.
2. Multiplicity of decision factors.
3. No single simple answer.
4. Difficult to see the whole picture.
5. Consisting of many different connected parts.
Ambiquity
1 There may be no right answer.
2. Events can be interpreted in many ways.
3. Open to more than one interpretation.
4 Not having the obvious meaning.
5 Unknown 'unknowns'
Managing VUCA to Lessen its Consequences
Despite the fact that VUCA may seem inevitable in some
yourself, your team, and your business to limit its effects. You economic sectors, you can manage
might even benefit from it.
Counter volatility with vision: Vision is the cure to volatilitu. Offer a
and set of values to your personnel. As a compeling Vsi
result, they will be better able to concentrate and Te
change morequickly.
Meet uncertainty with understanding: What are your rivals up to? What is new in your
field? You'll be able to foresee threats and
seize fresh possibilities when vou're "in the
know
 Globalization,Addressing a VUCAenvironment with a Boltoms - Up Approach 19

React to complexity with clarity: Communicate clearly at all times, and encourage
cooperation and teamwork. People will be given a clear direction as a result, which will motivate
them to work on difficult problems as a team.
Fight ambiguity with agility: Even amid uncertain times, rermain flexible. Encourage
others to acquire new skills, promote discussion, and value originality.
Recognize that change is an inevitable, continual aspect of your professional
environment, and accept it. Don't fight it off.
Addressing VUCA Environment with Bottom Up Approach
This idea seeks to develop a framework that can recognise and utilize developing
techniques. It is a methodical technique to formulate strategies that starts with the ground up
development of a plan. It aids in maximizing value generated and has an impact on the
subsequent formal strategic planning.
This idea entails:

1. Creating a common goal

vision is
The capacity to create teams with members who share a common mission and
crucial. Leaders must assist their followers in comprehending the greater picture and how they it
within it.

2 Learning agility
comfort zone in
Future leaders must be open-minded and willing to step outside of their
order to quickly adopt new ideas.
3 Self-knowledge
arowth as well as the effects
Leaders need to be aware of their own areas of strength and
trust at work depends on
that their communication and working methods have on others. Building
your capacity to be genuine and exhibit your acual self.
4. Üsing collaboration and influence to lead
on your ability to
Success in today's complicated environment frequently depends
Future leaders will need to
collaborate with people over whom you have no formal responsibility.
a variety of stakeholders.
be highly persuasive and have the capacity to work well with
5. The ability to lead despite ambiguity
little or even
The capacity to judge acceptable risk levels and make choices based on
and
contradictory information is crucial. Additionally, managers must be able to admit their errors
let others do the same.
 20
Strategic Management (M.M.S.
|2.2 GLOBALIZATION Sem.
..... M.U. Nov. 2017) (5
The spread of the flow of financial products, goods, marks
national borders and cultural boundaries is referred to as technology, information,and jobs ar
refers to a global interdependence facilitated by free globalization. In terms of economics
trade. Globalization is the term used t
describe the transfer of commodities, technologies,
Businesses in developed nations benefit from information, and jobs between nations
developing countries frequently have lower costs ofglobalization' s competitive advantage. Since
living than developed countries, this attracts
employment and helps them as well. The advantages of
Since their good consequences are not globalization have come under scrutiny
always equitably dispersed. A evident outcome of
globalization is the ability of one countrys economic collapse to a
trading partners. have cascading effect on its
Globalization gives businesses a competitive edge across the
allows them to cut operational board. Manufacturing abroad
expenses, lower or eliminate tariffs allow them to
materials more affordably, and most
importantly, they have access to millions of newpurchase raw
customers.
Social interaction between distinct
across civilizations is exemplified by populations increases as a result. Cultural interchange
globalization in terms of ideas, values, and artistic expression.
Another trend associated with globalization is the emergence of a unified
of politics, globalization has focused global culture. In terms
attention on intergovernmental bodies such as the World
Trade Organization and the United Nations (WTO).
law is developed and applied from a Globalization has changed how international
legal perspective.

Globalization is International integration which involves exchange of

products,
ideas, businesses and cultures.
world market.
Globalization is responsible for shaping the future patternsservices,
of the
Integrating regional economies and their culture.
Positive impact of globalization
1 Boost in the economy &rapid
2.
industrialization.
Boost in the flow of foreign
3
investments.
Increased rate of employment in sectors like IT,
4 Pharmaceuticals and Manufacturing.
Availability of advanced technology.
5
Availability of goods and services at low cost in the world
6 market.
Adaptation of foreign taste and trends, i.e. different
the trends, taste and culture of countries are able to adopt and ac4
other countries.
Globalization, Addressing a VUCA environment with a Bottoms -Up Approach 21

Negative impact of globalization

1. Reduced jobs and incomes. (With advancements in technologies, manpower requirements
in industries like cement, chemicals, infrastructure have reduced considerably, thus leading
to reduction of jobs).
2 Improper labor practices and environmental policies.
3 Cutthroat competition.
polarízation.
4. Inequality (increasing gap between rural and urban). This concept is called
5. Unequal distribution of income and wealth.
culture, i.e. people are losing their own cultural values and are adopting the foreign
6. Loss of
ones.

REVIEW QUESTIONS

Q1. Write short notes

a) VUCA

b) Globalization
Explain the positive & negative impact of globalization bottom up
Q2. thereby explaining it with the
strategic management of VUCA,
Q3. Explain the role of
approach.