Learning in understructured environments: lessons from power sector development in Asia

Abstract

How does one learn in an understructured environment? What should one learn in such an environment? There is no obvious answer to these questions; nevertheless this is a challenge confronting business development managers in the energy sector. In recent years huge markets have opened up in much of Asia; however, the art of developing or tapping these markets is as yet not well understood. This is exemplified in the slow progress that has been made in bringing projects to a final closure. The Asian market is fundamentally an understructured environment and it is this characteristic which has slowed down the development of projects. Institutions, be they political, regulatory, or social, function ever so imperfectly. Although the countries are in the midst of developing a stable institutional framework for conducting transactions, this is a long‐term process where progress is likely to be slow and volatile. Poses a central dilemma for business development managers; How should they operate in markets where institutions are still in the process of evolution? Addresses the issue of learning in understructured environments, using the development of the power sector in Asia as the core example.