Routines, dynamic capabilities and predictability: A contingency approach to risk and uncertainty

Abstract

Research on risk and uncertainty has been vital to understand how organizations should maneuver their environment. Recently, uncertainty has received increasing attention alongside risk, due to its explanatory value for contemporary business strategy. An important issue is that scholars have mainly focused on describing how organizations could operate in settings that are strictly either risky or uncertain. By researching both concepts in isolation, scholars have overlooked that risk and uncertainty may be two ends of a predictability spectrum. In fact, many settings can be characterized by both risk and uncertainty simultaneously, thereby comprising both predictability and unpredictability at the same time. In this study, we apply a contingency approach to risk and uncertainty, to explain how organizations can address settings of varying levels of predictability. For this, we draw from the routines and dynamic capabilities literatures. To present a stylistic organizational structure that may be able to withstand setting of varying levels of predictability, we take on a design perspective.