Emerging Trends in The Social and Behavioral Sciences

Managing Uncertainty in Work Organizations

Item

Title

Managing Uncertainty in Work Organizations

Author

Grote, Gudela

Research Area

Cognition and Emotions

Topic

Decision Making

Abstract

Managing uncertainty is a crucial task for organizations. This essay argues that uncertainty management should not only be understood in terms of reducing externally generated uncertainty, as previous research has predominantly done, but should also consider internal uncertainty creation. Evidence from extant research illustrates how this expanded perspective is better able to capture the paradoxical tensions inherent in uncertainty management. A multilevel approach is proposed as processes of reducing and creating uncertainty simultaneously happen and create complementarities across levels of analysis. Major theoretical frameworks, such as self‐regulation, decision‐making under uncertainty, contingency theory, and organizational control, will benefit from adopting such an expanded perspective because their explanatory power is currently limited due to the one‐sided view of uncertainty as an external threat to individual, team, and organizational goal‐striving.

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Identifier

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Managing Uncertainty in Work
Organizations
GUDELA GROTE

Abstract

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Managing uncertainty is a crucial task for organizations. This essay argues that
uncertainty management should not only be understood in terms of reducing
externally generated uncertainty, as previous research has predominantly done, but
should also consider internal uncertainty creation. Evidence from extant research
illustrates how this expanded perspective is better able to capture the paradoxical
tensions inherent in uncertainty management. A multilevel approach is proposed
as processes of reducing and creating uncertainty simultaneously happen and
create complementarities across levels of analysis. Major theoretical frameworks,
such as self-regulation, decision-making under uncertainty, contingency theory,
and organizational control, will benefit from adopting such an expanded perspective because their explanatory power is currently limited due to the one-sided
view of uncertainty as an external threat to individual, team, and organizational
goal-striving.

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INTRODUCTION
Uncertainty is a pervasive concept in many scientific disciplines as well
as in everyday life (Grote, 2009). In our personal experience, it related to
cognitions and emotions in situations where we would want to know more
in order to make sound judgments and act effectively. Such a lay understanding is not unlike formal definitions found in the scientific literature:
For instance, Galbraith (1973) defined uncertainty as the difference between
the amount of information required to perform a task and the amount of
information already possessed by the actor. Definitions abound, however,
and substantially differ by scientific discipline (Lipshitz & Strauss, 1997).
Frequently, a distinction is made between risk and uncertainty, where risk is
a quantifiable form of uncertainty based on probability estimates, while the
term uncertainty is reserved for nonquantifiable uncertainty (Knight, 1921).
As this essay focuses on uncertainty in work organizations, a definition
Emerging Trends in the Social and Behavioral Sciences.
Robert A. Scott and Marlis Buchmann (General Editors) with Stephen Kosslyn (Consulting Editor).
© 2018 John Wiley & Sons, Inc. ISBN 978-1-118-90077-2.

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close to those used in the organization sciences is applied: Uncertainty is a
state of lacking or ambiguous information in relation to a task to be accomplished. It can have many different sources, such as incomplete information,
inadequate understanding of available information, or undifferentiated (i.e.,
equally attractive or unattractive) alternatives (Lipshitz & Strauss, 1997).
This essay argues (i) that to date uncertainty has been treated in a rather
one-sided—and often implicit—manner as externally generated threat to the
functioning of individuals, teams, and organizations. It maintains (ii) that,
by explicitly considering uncertainty from a broader perspective, which
includes external and internal sources of uncertainty and also possible
benefits of uncertainty, many phenomena in work organizations can be
understood more fully. This new perspective also allows providing better
support for individual and organizational uncertainty management. I
develop these arguments by examining some prominent theoretical frameworks at the individual, team, and organizational level with respect to their
treatment of uncertainty and by discussing several salient phenomena at
each level within the suggested broader understanding of uncertainty. I will
conclude with some considerations across levels and recommendations for
future research.
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INDIVIDUAL UNCERTAINTY MANAGEMENT
Two fundamental paradigms in psychology have uncertainty at their core:
self-regulation and decision-making. Self-regulation comprises all processes
that “enable an individual to guide his/her goal-directed activities over time
and across changing circumstances (contexts)” (Karoly, 1993). Self-regulation
models of individual functioning have been developed in close conceptual
proximity to cybernetics. Individuals pursue goals, understood as reference
values in control theory terms, and have to overcome externally generated
disturbances in reaching those goals, where the necessary adaptations
are conceptualized as negative (discrepancy reducing) feedback loops. In
the most general sense, in self-regulation, uncertainty gets in the way of
achieving valued goals. In the respective research, uncertainty itself is not
considered in much detail, though, as individual level prerequisites and
processes related to (un)successful adaptation are at the center of attention
(Lord, Diefendorff, Schmidt, & Hall, 2010).
Research on decision-making is mostly undertaken within a paradigm that
very explicitly addresses uncertainty even in its name, “decision-making
under uncertainty.” Here, uncertainty is defined in terms of probabilities
attached to gains or losses the individual has to decide upon. Research has
centered around people’s inadequate processing of probability information
from the mathematical standpoint of maximizing subjective expected utility

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(Shafir & LeBoeuf, 2002). For instance, Kahneman and Tversky (1979)
showed that people are more uncertainty averse in choices concerning
gains compared to losses, leading them to prefer a certain lower gain over
an uncertain higher gain, while preferring an uncertain higher loss over
a certain lower loss. In more recent research, Wilson, Centerbar, Kermer,
and Gilbert (2005) discovered the “pleasure paradox,” where people’s
positive mood lasted longer when kept uncertain about the exact nature of
a positive event. Lerner, Li, Valdesolo, and Kassam (2015) discussed differential linkages between emotions, uncertainty perceptions, and subsequent
behaviors more generally, where for instance anger produces assessments
of high predictability and high personal control, while fear is related to
perceived low predictability and low personal control. To date, these more
intricate insights into individual uncertainty management have not been
applied to work contexts much, which points to a fruitful avenue for future
inquiry.
There are also many constructs in personality psychology describing personal dispositions related to uncertainty. The basic tenet is that people are
averse to uncertainty, but the degree to which this is the case may differ.
Examples are tolerance for ambiguity, uncertainty orientation, and learning
versus performance goal orientation. Two theories that build on uncertainty
aversion as a general psychological principle are uncertainty–identity theory (Hogg, 2007) and the uncertainty management theory of fairness (Lind
& van den Bos, 2002). Both theories explain processes related to their focal
construct, social identity in one case, perceptions of and reactions to (lack of)
fairness in the other case, in terms of mechanisms of uncertainty management. People identify with a social group as a way of reducing uncertainty
about how they should feel, think and behave and about what behavior to
expect from others. Perceived fairness helps people to cope with high levels
of uncertainty and the resulting perceived lack of control.
In order to discuss individuals’ uncertainty management at work in more
detail, I have chosen three pervasive phenomena—creativity, feedback
seeking, and stress at work—as examples because they require proactivity
and are therefore well suited to illustrate the limitations of a one-sided
view on uncertainty as an external and threatening force on behavior.
Creativity, the production and implementation of novel and useful ideas
(Amabile & Pratt, 2016), is the most obvious example for the relevance
of uncertainty creation in organizations. Creativity requires questioning
current routines and assumptions and embracing uncertainty during exploring and learning. Research on personal dispositions and cultural factors
related to openness to uncertainty has provided rather mixed evidence,
though, pointing to complex interactions between personal and contextual
factors underlying creative processes (Anderson, Potocnik, & Zhou, 2014).

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Self-regulation theory, especially the distinction between a regulatory focus
on promoting desired outcomes versus preventing undesired ones, has also
informed creativity research, indicating that both promotion and prevention
orientation may support creative task performance (Baas, De Dreu, &
Nijstad, 2011). A promising new direction in creativity research is based on
a paradox perspective, pointing to the need to both embrace and reduce
uncertainty for successful innovation. Miron-Spektor and Erez (2017) argue
that the outcomes of novelty and usefulness and the cognitive processes of
divergent and convergent thinking involved in creativity require a delicate
balance between openness to uncertainty and efforts to hone in on desired
solutions.
Feedback seeking, that is efforts aimed at determining the correctness and
adequacy of behavior with respect to achieving valued goals, is a crucial
element of self-regulatory processes. Much of early research on feedback
seeking in work organizations was based on the assumption that the prime
motive for feedback seeking is the desire to reduce uncertainty about oneself
(Ashford, De Stobbeleir, & Nujella, 2016). However, research has shown that
this assumption may be too simplistic. On the one hand, people seem rather
less than more likely to seek feedback with higher levels of uncertainty
about themselves (Anseel, Beatty, Shen, Lievens, & Sackett, 2013). On the
other hand, ambivalent feedback, that invokes both positive and negative
emotions and thus may, in fact, increase uncertainty rather than reduce
is, has been found to be particularly beneficial for performance, notably
creative performance (Harrison & Dossinger, 2017). As Ashford et al. (2016)
have stated in their recent review, learning appears to be a better framework
for understanding feedback seeking behavior than uncertainty reduction,
which opens up new routes for inquiry into feedback seeking as a potentially
uncertainty-creating behavior.
The final example, stress at work, at first sight is probably the least likely
phenomenon to discuss in support of arguments concerning benefits of
uncertainty. One prominent model to explain stress at work focuses on the
mismatch between job demands and job control (Karasek, 1979), pointing
especially at detrimental effects when job demands are high, but job control
is low. The job design literature has provided complementary evidence
by showing that high demands—when coupled with high control—have
positive effects on motivation and well-being at work (Parker, Morgeson,
& Johns, 2017). Raising job demands usually entails increasing uncertainty
also, because more complex tasks tend to contain elements that are not
fully predictable and difficult to routinize (Griffin, Neal, & Parker, 2007). In
order to manage this uncertainty well, employees need to be empowered to
make decisions themselves rather than defer to managerial control. Turning
this thinking around, if one wants to increase employee motivation and

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commitment by providing employees with more opportunities to exercise
their own capabilities and judgment, one has to introduce uncertainty into
their jobs (Slocum & Sims, 1980).
UNCERTAINTY MANAGEMENT IN TEAMS

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Besides many theories in social psychology that aim at explaining particular
social processes, two overarching frameworks refer to team processes and
outcomes more generally. They both happen to be related to uncertainty.
One framework is a team-level version of self-regulation theory, where now it
is not the individual actor who sets goals and strives to achieve them in the
face of potentially adverse environmental conditions, but it is the team, with
cross-level interactions tying team-level and individual-level self-regulation
together (Chen & Kanfer, 2006). The second framework, building and
expanding on self-regulation, is team adaptation, where the emphasis is on
the interaction between teams and their environments and the processes
that allow teams to readjust team functioning during and after external disturbances (Kozlowski & Bell, 2008). One frequently used distinction for such
adaptation processes is that between action and transition phases in teams
(Marks, Mathieu, & Zaccaro, 2001). Processes during transition phases are to
prepare teams for what is to come, while processes in action phases comprise
execution of plans and ad hoc adjustments if needed. Beyond this short-term
view on team adaptation, there are also models that describe longer-term
adaptation as teams get to know each other, learn from their daily working
together and develop and adjust routines for accomplishing their tasks
(Dionysiou & Tsoukas, 2013). As in individual-level theories, the dominant
assumption is that uncertainty stems mostly from the environment and that
teams have to reduce it to operate effectively.
Three team-level phenomena in work organizations are described to illustrate the necessity to broaden the view on uncertainty management at that
level as well: leadership, diversity, and voice. Implicit in much of the research
on leadership is the assumption that leaders reduce uncertainty for their subordinates by providing guidance and support, be it, for instance, as transformational leaders who give a greater sense of purpose to their teams by
invoking and enacting a vision of a desirable organizational future, or as
directive leaders who set goals and plan and supervise their achievement.
In recent years, research has begun to look at leadership coming not only
from the formal leader, but also from team members, resulting in different
forms of shared or distributed leadership (Denis, Langley, & Sergi, 2012).
Findings from a range of team settings seem to indicate that shared leadership is beneficial for team performance, but questions remain, for instance
in relation to the management of complex tasks (D’Innocenzo, Mathieu, &

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Kukenberger, 2016). One could argue that sharing leadership involves both
reducing uncertainty as more resources can be devoted to managing uncertainty, but it also creates uncertainty as roles are redefined and adapted in
the team. Depending on the balance between these two processes in a particular team, shared leadership may or may not be suitable for accomplishing
complex tasks.
Diversity in teams has received growing attention over the last decades,
especially as a means to foster innovation (Anderson et al., 2014). In simple
terms, having team members with diverse knowledge, expertise, and
attitudes working together should infuse variety into decision-making and
problem-solving that promotes information elaboration and creation of
novel and useful ideas. However, the evidence for team diversity being
beneficial for innovation or more generally for team performance is mixed
because diversity also brings about frictions and conflict based on processes
of social categorization, such as stereotyping. Over the years, a multitude
of mediators and moderators have been suggested to further explain under
which conditions information elaboration or social categorization becomes
more salient (Van Knippenberg & Mell, 2016). Only recently, though, the
fact that team diversity creates uncertainty for team members about the
right ways to think and act has been acknowledged as one important underlying mechanism. Following Hogg’s (2007) uncertainty–identity theory,
uncertainty reduction is considered a motive for members’ identification
with diverse teams and for specific behavior in those teams, such as performance monitoring (Guillaume, Dawson, Otaye-Ebede, Woods, & West,
2017).
Lastly, voice or speaking up in teams is a phenomenon closely linked to
uncertainty management (Grote, 2015). Voice has been defined as “discretionary communication of ideas, suggestions, concerns, or opinions about
work-related issues with the intent to improve organizational or unit functioning” (Morrison, 2011, p. 375). Uncertainty comes into play as individuals
evaluate costs and benefits of speaking up for themselves, but speaking up
can also increase uncertainty for the team. When concerns are raised about a
particular course of action or a reassessment of a situation is offered, the need
for more knowledge is created. Often this increased uncertainty is exactly
what keeps people from speaking up, especially in critical situations where
the team’s emotional and cognitive resources are stretched already (Bienefeld
& Grote, 2012). The uncertainty resulting from voicing doubts and new ideas
will be beneficial if the team is able to shift into a mode of divergent thinking
during its on-going activity, but is also capable of converting back to convergent thinking to adapt their course of action in a timely manner. Important
prerequisites for this to happen are inclusive leadership and psychological
safety because they create a nonthreatening climate within the team, which

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frees resources for problem-solving and learning (Nembhard & Edmondson,
2006).
UNCERTAINTY MANAGEMENT IN ORGANIZATIONS

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Starting from early studies on contingencies for the design of organizational
structures and processes to today’s strategic management literature, environmental uncertainty is considered a key construct for understanding and
shaping organizational action (Van de Ven, Ganco, & Hinings, 2013). Two
important theoretical frameworks that spell out mechanisms for uncertainty
management in organizations are contingency theory and organizational
control theory. Contingency theory was developed in a series of models
in the 1960s, all following the main thrust that Tayloristic minimization of
uncertainty as a fundamental design principle can only be successful in
environments with few uncertainties and well-known tasks, while all other
conditions require designs that support active adaptation to uncertainties.
Much of recent writing has emphasized that contingencies may not be so
clear-cut and that many organizations need to adopt mechanisms for reducing and absorbing external uncertainty simultaneously. In their discussion
of the future of contingency theory, Van de Ven et al. (2013) also argued for
the need to pay more attention to the generative capacity of individuals in
organizational design as a source of internal uncertainty.
Organizational control theory has evolved from the question of how
managers can ensure that their subordinates direct their efforts toward
achieving the organization’s goals (Cardinal, Kreutzer, & Miller, 2017).
Uncertainty is regarded as an inherent element in the manager–subordinate
relationship based on agency theory as outlined in economics, which holds
that subordinates’ motivation and behavior is geared to own personal goals
rather than the organization’s objectives unless controlled by their managers. Similar to contingency theory, different kinds of control mechanisms
are assumed to match particular organizational conditions. Long, Sitkin,
Cardinal, and Burton (2015) contrasted the agency perspective of organizational control with an information processing perspective, which focuses
more on managers’ role in reducing uncertainty for their subordinates
rather than for themselves. They find that combinations of different control
mechanisms generally are more effective than a single mechanism and that
with increasing levels of uncertainty stemming from highly complex tasks,
informal control mechanisms such as frequent personal meetings become
more important than formal control of subordinates’ behavior or output.
These conceptual developments align with a general tendency in organizational research to explore more complex patterns of uncertainty management rather than emphasize uncertainty reduction alone. To illustrate this

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general tendency, I discuss three research streams: innovation, organizational
change, and managing paradox.
Innovation research has long been dominated by the distinction between
exploitation and exploration introduced by March (1991). Exploitation
aims at making the most of existing knowledge, in terms of highly efficient
routine processes accomplishing well-established goals. Exploration, on the
other hand, is concerned with knowledge creation and learning, which may
eventually lead to new options for exploitation. Recent management literature has addressed the necessity to concurrently exploit and explore to stay
competitive, termed ambidexterity, which has been shown to be particularly
important in highly uncertain environments (O’Reilly & Tushman, 2013).
An on-going debate concerns the question of whether radical innovation
on the one hand and routine performance/incremental innovation on
the other, can—simultaneously or sequentially—happen within the same
organizational unit or only in parallel structures geared toward one or the
other. A more explicit consideration of uncertainty management might
help to solve this conundrum because it would help to study particular
configurations of uncertainty and effective mechanisms for responding to
those uncertainties. Furthermore, the deliberate introduction of uncertainty,
which is central to any organizational initiative aimed at radical innovation,
should be addressed.
Organizational change is a fascinating domain with respect to uncertainty
management. Core to any change is by definition an increase in uncertainty
for everyone affected by the change, which is thought to be a root cause for
resisting change as well (Bordia, Hobman, Jones, Gallois, & Callan, 2004).
Providing opportunities for active participation in the change process is
believed to alleviate resistance because it grants individuals some control
over the process and helps to reduce uncertainty. Furthermore, the necessity
of change needs to be irrefutable for individuals to be willing to bear the
uncertainty. Interestingly, though, Sonenshein (2010) found that managers
simultaneously presented change as significant and insignificant in their
communication to employees in order to reach out to both employees who
welcomed change and those who feared it. Uncertainty is prevalent not only
for the people affected by the change but also for those driving the change.
One of the few studies which has examined change agents themselves
looked at the impact of their personal support networks on the successful
implementation of change (Battilana & Casciaro, 2012). It was found that
changes which implied a higher degree of uncertainty seemed to require
more diverse networks.
Contingency thinking is pervasive in the organizational literature, as many
of the above examples show. However, the assumption that there are best
matches between organizational and environmental characteristics, which

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lead to either/or choices, has been challenged by proponents of paradoxical
thinking. Their main argument is that any situation an organization can find
itself in will require a mix of seemingly contradictory responses, such as
concurrently catering for efficiency and adaptability, routine and innovation,
and stability and change (Schad, Lewis, Raisch, & Smith, 2016). The necessity
to manage paradoxical tensions has been elaborated on in a number of research
domains, innovation and organizational change being among the prime
examples (Lüscher & Lewis, 2008; Miron-Spektor & Erez, 2017). While there
is still substantial debate around the question of how organizations—and
individuals and teams for that matter—can simultaneously respond to
conflicting demands (Grote, Kolbe & Waller, 2018; O’Reilly & Tushman,
2013; Schad et al., 2016), the literature on paradox opens a new perspective
on uncertainty management, which will be expanded on in the concluding
section of this essay.
AN ATTEMPTED SYNTHESIS ACROSS LEVELS AND SOME RESEARCH
RECOMMENDATIONS

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The discussion up to this point has provided ample evidence that to date
uncertainty has been treated in a rather one-sided manner with reducing
external uncertainty as the dominant focus. I have also given some examples
for an emerging broader view, where processes of reducing and creating
uncertainty are intertwined and where uncertainty may be beneficial, such
as in creativity, innovation, organizational change, learning about oneself
through feedback seeking, carrying out more demanding jobs, sharing
leadership functions, working in more diverse teams, or voicing concerns in
team decision-making.
However, a more agentic approach to uncertainty management still raises
many questions of how responsiveness to external uncertainty and the deliberate creation of internal uncertainty interact to bring about success or failure
at the individual, team, and organizational level. The literature on managing
paradox (Schad et al., 2016) provides an important starting point for research
into these questions because it emphasizes the concurrent consideration of
seemingly contradictory, but interdependent management practices. Tensions between concepts such as learning versus performance, cooperation
versus competition, or profit versus purpose are assumed to be fundamental to constituting these concepts themselves, as two sides of the same
coin. Thus, research on any of these concepts should adopt an and/both
rather than an either/or perspective in order to gain a more complete
understanding of the tensions involved and the best ways to manage them.
Studying uncertainty management with a paradox lens involves an expansion toward a multi-level framework, as processes of reducing and creating

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uncertainty may simultaneously happen at different levels of an organization
and also outside its boundaries. For instance, in their study of new ventures,
Hmieleski and Ensley (2007) found intriguing configurations of team diversity and leadership styles indicating that responses to external uncertainty
are themselves a mix of reducing (directive leadership, homogenous teams)
and increasing uncertainty (empowering leadership, heterogeneous teams).
These responses incorporate the team level, but also the organizational level
in as much as the use of particular leadership styles and team compositions
constitute deliberate decisions by top management.
A research agenda built on a multi-level framework of uncertainty reduction and creation in organizations will also stimulate psychological and
organizational theorizing more generally. Introducing deliberate increases
of uncertainty into models of self-regulation opens up new avenues for
research where individual agency reaches beyond finding the best ways to
protect goal striving against external threats. Especially, more knowledge
on how new goals and the uncertainty surrounding their achievement are
embraced is dearly needed (Scherbaum & Vancouver, 2010). Examining
self-regulatory processes may benefit from the rigorous operationalization
of uncertainty in decision-making research in order to better understand the
ambiguity of uncertainty itself for decision-makers. Such research would
align well with the growing literature that shows the importance of harnessing cognitive and emotional ambivalence for successful performance.
A more complete understanding of the interplay between uncertainty
creation and reduction at different levels of the organization is also crucial
for enriching contingency theory with more elaborate configurations of individual agency and structural mechanisms and for complementing models of
organizational control by considering uncertainties at different levels of the
organization. Lastly, examining the tensions between uncertainty reduction
and uncertainty creation for individuals, teams, and organizations becomes
ever more important with the current surge of opportunities and challenges
attached to the so-called second machine age (Brynjolfsson & McAfee, 2014).
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Gudela Grote is a professor of Work and Organizational Psychology at the
Department of Management, Technology, and Economics at the ETH Zürich.
She studied psychology at the University of Marburg and the Technical
University in Berlin. She received her PhD from the Georgia Institute of
Technology, Atlanta. In her research, Prof. Grote strives to provide psychologically based concepts and methods for integrative job and organizational
design, taking into consideration the changing technological, economic
and societal demands and opportunities. Of special interest in her work
is the increasing flexibility and virtuality of work and consequences for
the individual and organizational management of uncertainty. Application
areas are teamwork and standardization in high-risk systems, effects of new
technologies on work processes, and the management of the employment
relationship. Prof. Grote is associate editor of the journal Safety Science and
member of the editorial board of several other journals. She has published
widely on topics in organizational behavior, human factors, human resource

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management, and safety management and has consulted with major private
and public organizations. Gudela Grote has been Head of the Department of
Management, Technology, and Economics at ETH Zürich and is past president of the European Association of Work and Organizational Psychology.
She is a fellow of the Society for Industrial and Organizational Psychology.
RELATED ESSAYS

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Making Sense of Control: Change and Consequences (Psychology), Margie E.
Lachman et al.
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Effortful Control (Psychology), Tracy L. Spinrad and Nancy Eisenberg
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Political Conflict and Youth: A Long-Term View (Psychology), Brian K. Barber
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and Johan S. G. Chu
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Organizational Populations and Fields (Sociology), Heather A. Haveman and
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Domestic Political Institutions and Alliance Politics (Political Science),
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The Institutional Logics Perspective (Sociology), Patricia H. Thornton et al.

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Managing Uncertainty in Work
Organizations
GUDELA GROTE

Abstract

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Managing uncertainty is a crucial task for organizations. This essay argues that
uncertainty management should not only be understood in terms of reducing
externally generated uncertainty, as previous research has predominantly done, but
should also consider internal uncertainty creation. Evidence from extant research
illustrates how this expanded perspective is better able to capture the paradoxical
tensions inherent in uncertainty management. A multilevel approach is proposed
as processes of reducing and creating uncertainty simultaneously happen and
create complementarities across levels of analysis. Major theoretical frameworks,
such as self-regulation, decision-making under uncertainty, contingency theory,
and organizational control, will benefit from adopting such an expanded perspective because their explanatory power is currently limited due to the one-sided
view of uncertainty as an external threat to individual, team, and organizational
goal-striving.

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INTRODUCTION
Uncertainty is a pervasive concept in many scientific disciplines as well
as in everyday life (Grote, 2009). In our personal experience, it related to
cognitions and emotions in situations where we would want to know more
in order to make sound judgments and act effectively. Such a lay understanding is not unlike formal definitions found in the scientific literature:
For instance, Galbraith (1973) defined uncertainty as the difference between
the amount of information required to perform a task and the amount of
information already possessed by the actor. Definitions abound, however,
and substantially differ by scientific discipline (Lipshitz & Strauss, 1997).
Frequently, a distinction is made between risk and uncertainty, where risk is
a quantifiable form of uncertainty based on probability estimates, while the
term uncertainty is reserved for nonquantifiable uncertainty (Knight, 1921).
As this essay focuses on uncertainty in work organizations, a definition
Emerging Trends in the Social and Behavioral Sciences.
Robert A. Scott and Marlis Buchmann (General Editors) with Stephen Kosslyn (Consulting Editor).
© 2018 John Wiley & Sons, Inc. ISBN 978-1-118-90077-2.

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close to those used in the organization sciences is applied: Uncertainty is a
state of lacking or ambiguous information in relation to a task to be accomplished. It can have many different sources, such as incomplete information,
inadequate understanding of available information, or undifferentiated (i.e.,
equally attractive or unattractive) alternatives (Lipshitz & Strauss, 1997).
This essay argues (i) that to date uncertainty has been treated in a rather
one-sided—and often implicit—manner as externally generated threat to the
functioning of individuals, teams, and organizations. It maintains (ii) that,
by explicitly considering uncertainty from a broader perspective, which
includes external and internal sources of uncertainty and also possible
benefits of uncertainty, many phenomena in work organizations can be
understood more fully. This new perspective also allows providing better
support for individual and organizational uncertainty management. I
develop these arguments by examining some prominent theoretical frameworks at the individual, team, and organizational level with respect to their
treatment of uncertainty and by discussing several salient phenomena at
each level within the suggested broader understanding of uncertainty. I will
conclude with some considerations across levels and recommendations for
future research.
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INDIVIDUAL UNCERTAINTY MANAGEMENT
Two fundamental paradigms in psychology have uncertainty at their core:
self-regulation and decision-making. Self-regulation comprises all processes
that “enable an individual to guide his/her goal-directed activities over time
and across changing circumstances (contexts)” (Karoly, 1993). Self-regulation
models of individual functioning have been developed in close conceptual
proximity to cybernetics. Individuals pursue goals, understood as reference
values in control theory terms, and have to overcome externally generated
disturbances in reaching those goals, where the necessary adaptations
are conceptualized as negative (discrepancy reducing) feedback loops. In
the most general sense, in self-regulation, uncertainty gets in the way of
achieving valued goals. In the respective research, uncertainty itself is not
considered in much detail, though, as individual level prerequisites and
processes related to (un)successful adaptation are at the center of attention
(Lord, Diefendorff, Schmidt, & Hall, 2010).
Research on decision-making is mostly undertaken within a paradigm that
very explicitly addresses uncertainty even in its name, “decision-making
under uncertainty.” Here, uncertainty is defined in terms of probabilities
attached to gains or losses the individual has to decide upon. Research has
centered around people’s inadequate processing of probability information
from the mathematical standpoint of maximizing subjective expected utility

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(Shafir & LeBoeuf, 2002). For instance, Kahneman and Tversky (1979)
showed that people are more uncertainty averse in choices concerning
gains compared to losses, leading them to prefer a certain lower gain over
an uncertain higher gain, while preferring an uncertain higher loss over
a certain lower loss. In more recent research, Wilson, Centerbar, Kermer,
and Gilbert (2005) discovered the “pleasure paradox,” where people’s
positive mood lasted longer when kept uncertain about the exact nature of
a positive event. Lerner, Li, Valdesolo, and Kassam (2015) discussed differential linkages between emotions, uncertainty perceptions, and subsequent
behaviors more generally, where for instance anger produces assessments
of high predictability and high personal control, while fear is related to
perceived low predictability and low personal control. To date, these more
intricate insights into individual uncertainty management have not been
applied to work contexts much, which points to a fruitful avenue for future
inquiry.
There are also many constructs in personality psychology describing personal dispositions related to uncertainty. The basic tenet is that people are
averse to uncertainty, but the degree to which this is the case may differ.
Examples are tolerance for ambiguity, uncertainty orientation, and learning
versus performance goal orientation. Two theories that build on uncertainty
aversion as a general psychological principle are uncertainty–identity theory (Hogg, 2007) and the uncertainty management theory of fairness (Lind
& van den Bos, 2002). Both theories explain processes related to their focal
construct, social identity in one case, perceptions of and reactions to (lack of)
fairness in the other case, in terms of mechanisms of uncertainty management. People identify with a social group as a way of reducing uncertainty
about how they should feel, think and behave and about what behavior to
expect from others. Perceived fairness helps people to cope with high levels
of uncertainty and the resulting perceived lack of control.
In order to discuss individuals’ uncertainty management at work in more
detail, I have chosen three pervasive phenomena—creativity, feedback
seeking, and stress at work—as examples because they require proactivity
and are therefore well suited to illustrate the limitations of a one-sided
view on uncertainty as an external and threatening force on behavior.
Creativity, the production and implementation of novel and useful ideas
(Amabile & Pratt, 2016), is the most obvious example for the relevance
of uncertainty creation in organizations. Creativity requires questioning
current routines and assumptions and embracing uncertainty during exploring and learning. Research on personal dispositions and cultural factors
related to openness to uncertainty has provided rather mixed evidence,
though, pointing to complex interactions between personal and contextual
factors underlying creative processes (Anderson, Potocnik, & Zhou, 2014).

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Self-regulation theory, especially the distinction between a regulatory focus
on promoting desired outcomes versus preventing undesired ones, has also
informed creativity research, indicating that both promotion and prevention
orientation may support creative task performance (Baas, De Dreu, &
Nijstad, 2011). A promising new direction in creativity research is based on
a paradox perspective, pointing to the need to both embrace and reduce
uncertainty for successful innovation. Miron-Spektor and Erez (2017) argue
that the outcomes of novelty and usefulness and the cognitive processes of
divergent and convergent thinking involved in creativity require a delicate
balance between openness to uncertainty and efforts to hone in on desired
solutions.
Feedback seeking, that is efforts aimed at determining the correctness and
adequacy of behavior with respect to achieving valued goals, is a crucial
element of self-regulatory processes. Much of early research on feedback
seeking in work organizations was based on the assumption that the prime
motive for feedback seeking is the desire to reduce uncertainty about oneself
(Ashford, De Stobbeleir, & Nujella, 2016). However, research has shown that
this assumption may be too simplistic. On the one hand, people seem rather
less than more likely to seek feedback with higher levels of uncertainty
about themselves (Anseel, Beatty, Shen, Lievens, & Sackett, 2013). On the
other hand, ambivalent feedback, that invokes both positive and negative
emotions and thus may, in fact, increase uncertainty rather than reduce
is, has been found to be particularly beneficial for performance, notably
creative performance (Harrison & Dossinger, 2017). As Ashford et al. (2016)
have stated in their recent review, learning appears to be a better framework
for understanding feedback seeking behavior than uncertainty reduction,
which opens up new routes for inquiry into feedback seeking as a potentially
uncertainty-creating behavior.
The final example, stress at work, at first sight is probably the least likely
phenomenon to discuss in support of arguments concerning benefits of
uncertainty. One prominent model to explain stress at work focuses on the
mismatch between job demands and job control (Karasek, 1979), pointing
especially at detrimental effects when job demands are high, but job control
is low. The job design literature has provided complementary evidence
by showing that high demands—when coupled with high control—have
positive effects on motivation and well-being at work (Parker, Morgeson,
& Johns, 2017). Raising job demands usually entails increasing uncertainty
also, because more complex tasks tend to contain elements that are not
fully predictable and difficult to routinize (Griffin, Neal, & Parker, 2007). In
order to manage this uncertainty well, employees need to be empowered to
make decisions themselves rather than defer to managerial control. Turning
this thinking around, if one wants to increase employee motivation and

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commitment by providing employees with more opportunities to exercise
their own capabilities and judgment, one has to introduce uncertainty into
their jobs (Slocum & Sims, 1980).
UNCERTAINTY MANAGEMENT IN TEAMS

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Besides many theories in social psychology that aim at explaining particular
social processes, two overarching frameworks refer to team processes and
outcomes more generally. They both happen to be related to uncertainty.
One framework is a team-level version of self-regulation theory, where now it
is not the individual actor who sets goals and strives to achieve them in the
face of potentially adverse environmental conditions, but it is the team, with
cross-level interactions tying team-level and individual-level self-regulation
together (Chen & Kanfer, 2006). The second framework, building and
expanding on self-regulation, is team adaptation, where the emphasis is on
the interaction between teams and their environments and the processes
that allow teams to readjust team functioning during and after external disturbances (Kozlowski & Bell, 2008). One frequently used distinction for such
adaptation processes is that between action and transition phases in teams
(Marks, Mathieu, & Zaccaro, 2001). Processes during transition phases are to
prepare teams for what is to come, while processes in action phases comprise
execution of plans and ad hoc adjustments if needed. Beyond this short-term
view on team adaptation, there are also models that describe longer-term
adaptation as teams get to know each other, learn from their daily working
together and develop and adjust routines for accomplishing their tasks
(Dionysiou & Tsoukas, 2013). As in individual-level theories, the dominant
assumption is that uncertainty stems mostly from the environment and that
teams have to reduce it to operate effectively.
Three team-level phenomena in work organizations are described to illustrate the necessity to broaden the view on uncertainty management at that
level as well: leadership, diversity, and voice. Implicit in much of the research
on leadership is the assumption that leaders reduce uncertainty for their subordinates by providing guidance and support, be it, for instance, as transformational leaders who give a greater sense of purpose to their teams by
invoking and enacting a vision of a desirable organizational future, or as
directive leaders who set goals and plan and supervise their achievement.
In recent years, research has begun to look at leadership coming not only
from the formal leader, but also from team members, resulting in different
forms of shared or distributed leadership (Denis, Langley, & Sergi, 2012).
Findings from a range of team settings seem to indicate that shared leadership is beneficial for team performance, but questions remain, for instance
in relation to the management of complex tasks (D’Innocenzo, Mathieu, &

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Kukenberger, 2016). One could argue that sharing leadership involves both
reducing uncertainty as more resources can be devoted to managing uncertainty, but it also creates uncertainty as roles are redefined and adapted in
the team. Depending on the balance between these two processes in a particular team, shared leadership may or may not be suitable for accomplishing
complex tasks.
Diversity in teams has received growing attention over the last decades,
especially as a means to foster innovation (Anderson et al., 2014). In simple
terms, having team members with diverse knowledge, expertise, and
attitudes working together should infuse variety into decision-making and
problem-solving that promotes information elaboration and creation of
novel and useful ideas. However, the evidence for team diversity being
beneficial for innovation or more generally for team performance is mixed
because diversity also brings about frictions and conflict based on processes
of social categorization, such as stereotyping. Over the years, a multitude
of mediators and moderators have been suggested to further explain under
which conditions information elaboration or social categorization becomes
more salient (Van Knippenberg & Mell, 2016). Only recently, though, the
fact that team diversity creates uncertainty for team members about the
right ways to think and act has been acknowledged as one important underlying mechanism. Following Hogg’s (2007) uncertainty–identity theory,
uncertainty reduction is considered a motive for members’ identification
with diverse teams and for specific behavior in those teams, such as performance monitoring (Guillaume, Dawson, Otaye-Ebede, Woods, & West,
2017).
Lastly, voice or speaking up in teams is a phenomenon closely linked to
uncertainty management (Grote, 2015). Voice has been defined as “discretionary communication of ideas, suggestions, concerns, or opinions about
work-related issues with the intent to improve organizational or unit functioning” (Morrison, 2011, p. 375). Uncertainty comes into play as individuals
evaluate costs and benefits of speaking up for themselves, but speaking up
can also increase uncertainty for the team. When concerns are raised about a
particular course of action or a reassessment of a situation is offered, the need
for more knowledge is created. Often this increased uncertainty is exactly
what keeps people from speaking up, especially in critical situations where
the team’s emotional and cognitive resources are stretched already (Bienefeld
& Grote, 2012). The uncertainty resulting from voicing doubts and new ideas
will be beneficial if the team is able to shift into a mode of divergent thinking
during its on-going activity, but is also capable of converting back to convergent thinking to adapt their course of action in a timely manner. Important
prerequisites for this to happen are inclusive leadership and psychological
safety because they create a nonthreatening climate within the team, which

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frees resources for problem-solving and learning (Nembhard & Edmondson,
2006).
UNCERTAINTY MANAGEMENT IN ORGANIZATIONS

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Starting from early studies on contingencies for the design of organizational
structures and processes to today’s strategic management literature, environmental uncertainty is considered a key construct for understanding and
shaping organizational action (Van de Ven, Ganco, & Hinings, 2013). Two
important theoretical frameworks that spell out mechanisms for uncertainty
management in organizations are contingency theory and organizational
control theory. Contingency theory was developed in a series of models
in the 1960s, all following the main thrust that Tayloristic minimization of
uncertainty as a fundamental design principle can only be successful in
environments with few uncertainties and well-known tasks, while all other
conditions require designs that support active adaptation to uncertainties.
Much of recent writing has emphasized that contingencies may not be so
clear-cut and that many organizations need to adopt mechanisms for reducing and absorbing external uncertainty simultaneously. In their discussion
of the future of contingency theory, Van de Ven et al. (2013) also argued for
the need to pay more attention to the generative capacity of individuals in
organizational design as a source of internal uncertainty.
Organizational control theory has evolved from the question of how
managers can ensure that their subordinates direct their efforts toward
achieving the organization’s goals (Cardinal, Kreutzer, & Miller, 2017).
Uncertainty is regarded as an inherent element in the manager–subordinate
relationship based on agency theory as outlined in economics, which holds
that subordinates’ motivation and behavior is geared to own personal goals
rather than the organization’s objectives unless controlled by their managers. Similar to contingency theory, different kinds of control mechanisms
are assumed to match particular organizational conditions. Long, Sitkin,
Cardinal, and Burton (2015) contrasted the agency perspective of organizational control with an information processing perspective, which focuses
more on managers’ role in reducing uncertainty for their subordinates
rather than for themselves. They find that combinations of different control
mechanisms generally are more effective than a single mechanism and that
with increasing levels of uncertainty stemming from highly complex tasks,
informal control mechanisms such as frequent personal meetings become
more important than formal control of subordinates’ behavior or output.
These conceptual developments align with a general tendency in organizational research to explore more complex patterns of uncertainty management rather than emphasize uncertainty reduction alone. To illustrate this

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general tendency, I discuss three research streams: innovation, organizational
change, and managing paradox.
Innovation research has long been dominated by the distinction between
exploitation and exploration introduced by March (1991). Exploitation
aims at making the most of existing knowledge, in terms of highly efficient
routine processes accomplishing well-established goals. Exploration, on the
other hand, is concerned with knowledge creation and learning, which may
eventually lead to new options for exploitation. Recent management literature has addressed the necessity to concurrently exploit and explore to stay
competitive, termed ambidexterity, which has been shown to be particularly
important in highly uncertain environments (O’Reilly & Tushman, 2013).
An on-going debate concerns the question of whether radical innovation
on the one hand and routine performance/incremental innovation on
the other, can—simultaneously or sequentially—happen within the same
organizational unit or only in parallel structures geared toward one or the
other. A more explicit consideration of uncertainty management might
help to solve this conundrum because it would help to study particular
configurations of uncertainty and effective mechanisms for responding to
those uncertainties. Furthermore, the deliberate introduction of uncertainty,
which is central to any organizational initiative aimed at radical innovation,
should be addressed.
Organizational change is a fascinating domain with respect to uncertainty
management. Core to any change is by definition an increase in uncertainty
for everyone affected by the change, which is thought to be a root cause for
resisting change as well (Bordia, Hobman, Jones, Gallois, & Callan, 2004).
Providing opportunities for active participation in the change process is
believed to alleviate resistance because it grants individuals some control
over the process and helps to reduce uncertainty. Furthermore, the necessity
of change needs to be irrefutable for individuals to be willing to bear the
uncertainty. Interestingly, though, Sonenshein (2010) found that managers
simultaneously presented change as significant and insignificant in their
communication to employees in order to reach out to both employees who
welcomed change and those who feared it. Uncertainty is prevalent not only
for the people affected by the change but also for those driving the change.
One of the few studies which has examined change agents themselves
looked at the impact of their personal support networks on the successful
implementation of change (Battilana & Casciaro, 2012). It was found that
changes which implied a higher degree of uncertainty seemed to require
more diverse networks.
Contingency thinking is pervasive in the organizational literature, as many
of the above examples show. However, the assumption that there are best
matches between organizational and environmental characteristics, which

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lead to either/or choices, has been challenged by proponents of paradoxical
thinking. Their main argument is that any situation an organization can find
itself in will require a mix of seemingly contradictory responses, such as
concurrently catering for efficiency and adaptability, routine and innovation,
and stability and change (Schad, Lewis, Raisch, & Smith, 2016). The necessity
to manage paradoxical tensions has been elaborated on in a number of research
domains, innovation and organizational change being among the prime
examples (Lüscher & Lewis, 2008; Miron-Spektor & Erez, 2017). While there
is still substantial debate around the question of how organizations—and
individuals and teams for that matter—can simultaneously respond to
conflicting demands (Grote, Kolbe & Waller, 2018; O’Reilly & Tushman,
2013; Schad et al., 2016), the literature on paradox opens a new perspective
on uncertainty management, which will be expanded on in the concluding
section of this essay.
AN ATTEMPTED SYNTHESIS ACROSS LEVELS AND SOME RESEARCH
RECOMMENDATIONS

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The discussion up to this point has provided ample evidence that to date
uncertainty has been treated in a rather one-sided manner with reducing
external uncertainty as the dominant focus. I have also given some examples
for an emerging broader view, where processes of reducing and creating
uncertainty are intertwined and where uncertainty may be beneficial, such
as in creativity, innovation, organizational change, learning about oneself
through feedback seeking, carrying out more demanding jobs, sharing
leadership functions, working in more diverse teams, or voicing concerns in
team decision-making.
However, a more agentic approach to uncertainty management still raises
many questions of how responsiveness to external uncertainty and the deliberate creation of internal uncertainty interact to bring about success or failure
at the individual, team, and organizational level. The literature on managing
paradox (Schad et al., 2016) provides an important starting point for research
into these questions because it emphasizes the concurrent consideration of
seemingly contradictory, but interdependent management practices. Tensions between concepts such as learning versus performance, cooperation
versus competition, or profit versus purpose are assumed to be fundamental to constituting these concepts themselves, as two sides of the same
coin. Thus, research on any of these concepts should adopt an and/both
rather than an either/or perspective in order to gain a more complete
understanding of the tensions involved and the best ways to manage them.
Studying uncertainty management with a paradox lens involves an expansion toward a multi-level framework, as processes of reducing and creating

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uncertainty may simultaneously happen at different levels of an organization
and also outside its boundaries. For instance, in their study of new ventures,
Hmieleski and Ensley (2007) found intriguing configurations of team diversity and leadership styles indicating that responses to external uncertainty
are themselves a mix of reducing (directive leadership, homogenous teams)
and increasing uncertainty (empowering leadership, heterogeneous teams).
These responses incorporate the team level, but also the organizational level
in as much as the use of particular leadership styles and team compositions
constitute deliberate decisions by top management.
A research agenda built on a multi-level framework of uncertainty reduction and creation in organizations will also stimulate psychological and
organizational theorizing more generally. Introducing deliberate increases
of uncertainty into models of self-regulation opens up new avenues for
research where individual agency reaches beyond finding the best ways to
protect goal striving against external threats. Especially, more knowledge
on how new goals and the uncertainty surrounding their achievement are
embraced is dearly needed (Scherbaum & Vancouver, 2010). Examining
self-regulatory processes may benefit from the rigorous operationalization
of uncertainty in decision-making research in order to better understand the
ambiguity of uncertainty itself for decision-makers. Such research would
align well with the growing literature that shows the importance of harnessing cognitive and emotional ambivalence for successful performance.
A more complete understanding of the interplay between uncertainty
creation and reduction at different levels of the organization is also crucial
for enriching contingency theory with more elaborate configurations of individual agency and structural mechanisms and for complementing models of
organizational control by considering uncertainties at different levels of the
organization. Lastly, examining the tensions between uncertainty reduction
and uncertainty creation for individuals, teams, and organizations becomes
ever more important with the current surge of opportunities and challenges
attached to the so-called second machine age (Brynjolfsson & McAfee, 2014).
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Gudela Grote is a professor of Work and Organizational Psychology at the
Department of Management, Technology, and Economics at the ETH Zürich.
She studied psychology at the University of Marburg and the Technical
University in Berlin. She received her PhD from the Georgia Institute of
Technology, Atlanta. In her research, Prof. Grote strives to provide psychologically based concepts and methods for integrative job and organizational
design, taking into consideration the changing technological, economic
and societal demands and opportunities. Of special interest in her work
is the increasing flexibility and virtuality of work and consequences for
the individual and organizational management of uncertainty. Application
areas are teamwork and standardization in high-risk systems, effects of new
technologies on work processes, and the management of the employment
relationship. Prof. Grote is associate editor of the journal Safety Science and
member of the editorial board of several other journals. She has published
widely on topics in organizational behavior, human factors, human resource

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management, and safety management and has consulted with major private
and public organizations. Gudela Grote has been Head of the Department of
Management, Technology, and Economics at ETH Zürich and is past president of the European Association of Work and Organizational Psychology.
She is a fellow of the Society for Industrial and Organizational Psychology.
RELATED ESSAYS

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Making Sense of Control: Change and Consequences (Psychology), Margie E.
Lachman et al.
Regulatory Focus Theory (Psychology), E. Tory Higgins
Multitasking (Communications & Media), Matthew Irwin and Zheng Wang
Effortful Control (Psychology), Tracy L. Spinrad and Nancy Eisenberg
Emotion Regulation (Psychology), Paree Zarolia et al.
Gender and Work (Sociology), Christine L. Williams and Megan Tobias Neely
Organizations and the Production of Systemic Risk (Sociology), Charles
Perrow
Political Conflict and Youth: A Long-Term View (Psychology), Brian K. Barber
Stability and Change in Corporate Governance (Sociology), Gerald F. Davis
and Johan S. G. Chu
Institutions and the Economy (Sociology), Carl Gershenson and Frank
Dobbin
Organizational Populations and Fields (Sociology), Heather A. Haveman and
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Domestic Political Institutions and Alliance Politics (Political Science),
Michaela Mattes
The Institutional Logics Perspective (Sociology), Patricia H. Thornton et al.

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Managing Uncertainty in Work
Organizations
GUDELA GROTE

Abstract

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Managing uncertainty is a crucial task for organizations. This essay argues that
uncertainty management should not only be understood in terms of reducing
externally generated uncertainty, as previous research has predominantly done, but
should also consider internal uncertainty creation. Evidence from extant research
illustrates how this expanded perspective is better able to capture the paradoxical
tensions inherent in uncertainty management. A multilevel approach is proposed
as processes of reducing and creating uncertainty simultaneously happen and
create complementarities across levels of analysis. Major theoretical frameworks,
such as self-regulation, decision-making under uncertainty, contingency theory,
and organizational control, will benefit from adopting such an expanded perspective because their explanatory power is currently limited due to the one-sided
view of uncertainty as an external threat to individual, team, and organizational
goal-striving.

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INTRODUCTION
Uncertainty is a pervasive concept in many scientific disciplines as well
as in everyday life (Grote, 2009). In our personal experience, it related to
cognitions and emotions in situations where we would want to know more
in order to make sound judgments and act effectively. Such a lay understanding is not unlike formal definitions found in the scientific literature:
For instance, Galbraith (1973) defined uncertainty as the difference between
the amount of information required to perform a task and the amount of
information already possessed by the actor. Definitions abound, however,
and substantially differ by scientific discipline (Lipshitz & Strauss, 1997).
Frequently, a distinction is made between risk and uncertainty, where risk is
a quantifiable form of uncertainty based on probability estimates, while the
term uncertainty is reserved for nonquantifiable uncertainty (Knight, 1921).
As this essay focuses on uncertainty in work organizations, a definition
Emerging Trends in the Social and Behavioral Sciences.
Robert A. Scott and Marlis Buchmann (General Editors) with Stephen Kosslyn (Consulting Editor).
© 2018 John Wiley & Sons, Inc. ISBN 978-1-118-90077-2.

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close to those used in the organization sciences is applied: Uncertainty is a
state of lacking or ambiguous information in relation to a task to be accomplished. It can have many different sources, such as incomplete information,
inadequate understanding of available information, or undifferentiated (i.e.,
equally attractive or unattractive) alternatives (Lipshitz & Strauss, 1997).
This essay argues (i) that to date uncertainty has been treated in a rather
one-sided—and often implicit—manner as externally generated threat to the
functioning of individuals, teams, and organizations. It maintains (ii) that,
by explicitly considering uncertainty from a broader perspective, which
includes external and internal sources of uncertainty and also possible
benefits of uncertainty, many phenomena in work organizations can be
understood more fully. This new perspective also allows providing better
support for individual and organizational uncertainty management. I
develop these arguments by examining some prominent theoretical frameworks at the individual, team, and organizational level with respect to their
treatment of uncertainty and by discussing several salient phenomena at
each level within the suggested broader understanding of uncertainty. I will
conclude with some considerations across levels and recommendations for
future research.
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INDIVIDUAL UNCERTAINTY MANAGEMENT
Two fundamental paradigms in psychology have uncertainty at their core:
self-regulation and decision-making. Self-regulation comprises all processes
that “enable an individual to guide his/her goal-directed activities over time
and across changing circumstances (contexts)” (Karoly, 1993). Self-regulation
models of individual functioning have been developed in close conceptual
proximity to cybernetics. Individuals pursue goals, understood as reference
values in control theory terms, and have to overcome externally generated
disturbances in reaching those goals, where the necessary adaptations
are conceptualized as negative (discrepancy reducing) feedback loops. In
the most general sense, in self-regulation, uncertainty gets in the way of
achieving valued goals. In the respective research, uncertainty itself is not
considered in much detail, though, as individual level prerequisites and
processes related to (un)successful adaptation are at the center of attention
(Lord, Diefendorff, Schmidt, & Hall, 2010).
Research on decision-making is mostly undertaken within a paradigm that
very explicitly addresses uncertainty even in its name, “decision-making
under uncertainty.” Here, uncertainty is defined in terms of probabilities
attached to gains or losses the individual has to decide upon. Research has
centered around people’s inadequate processing of probability information
from the mathematical standpoint of maximizing subjective expected utility

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(Shafir & LeBoeuf, 2002). For instance, Kahneman and Tversky (1979)
showed that people are more uncertainty averse in choices concerning
gains compared to losses, leading them to prefer a certain lower gain over
an uncertain higher gain, while preferring an uncertain higher loss over
a certain lower loss. In more recent research, Wilson, Centerbar, Kermer,
and Gilbert (2005) discovered the “pleasure paradox,” where people’s
positive mood lasted longer when kept uncertain about the exact nature of
a positive event. Lerner, Li, Valdesolo, and Kassam (2015) discussed differential linkages between emotions, uncertainty perceptions, and subsequent
behaviors more generally, where for instance anger produces assessments
of high predictability and high personal control, while fear is related to
perceived low predictability and low personal control. To date, these more
intricate insights into individual uncertainty management have not been
applied to work contexts much, which points to a fruitful avenue for future
inquiry.
There are also many constructs in personality psychology describing personal dispositions related to uncertainty. The basic tenet is that people are
averse to uncertainty, but the degree to which this is the case may differ.
Examples are tolerance for ambiguity, uncertainty orientation, and learning
versus performance goal orientation. Two theories that build on uncertainty
aversion as a general psychological principle are uncertainty–identity theory (Hogg, 2007) and the uncertainty management theory of fairness (Lind
& van den Bos, 2002). Both theories explain processes related to their focal
construct, social identity in one case, perceptions of and reactions to (lack of)
fairness in the other case, in terms of mechanisms of uncertainty management. People identify with a social group as a way of reducing uncertainty
about how they should feel, think and behave and about what behavior to
expect from others. Perceived fairness helps people to cope with high levels
of uncertainty and the resulting perceived lack of control.
In order to discuss individuals’ uncertainty management at work in more
detail, I have chosen three pervasive phenomena—creativity, feedback
seeking, and stress at work—as examples because they require proactivity
and are therefore well suited to illustrate the limitations of a one-sided
view on uncertainty as an external and threatening force on behavior.
Creativity, the production and implementation of novel and useful ideas
(Amabile & Pratt, 2016), is the most obvious example for the relevance
of uncertainty creation in organizations. Creativity requires questioning
current routines and assumptions and embracing uncertainty during exploring and learning. Research on personal dispositions and cultural factors
related to openness to uncertainty has provided rather mixed evidence,
though, pointing to complex interactions between personal and contextual
factors underlying creative processes (Anderson, Potocnik, & Zhou, 2014).

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Self-regulation theory, especially the distinction between a regulatory focus
on promoting desired outcomes versus preventing undesired ones, has also
informed creativity research, indicating that both promotion and prevention
orientation may support creative task performance (Baas, De Dreu, &
Nijstad, 2011). A promising new direction in creativity research is based on
a paradox perspective, pointing to the need to both embrace and reduce
uncertainty for successful innovation. Miron-Spektor and Erez (2017) argue
that the outcomes of novelty and usefulness and the cognitive processes of
divergent and convergent thinking involved in creativity require a delicate
balance between openness to uncertainty and efforts to hone in on desired
solutions.
Feedback seeking, that is efforts aimed at determining the correctness and
adequacy of behavior with respect to achieving valued goals, is a crucial
element of self-regulatory processes. Much of early research on feedback
seeking in work organizations was based on the assumption that the prime
motive for feedback seeking is the desire to reduce uncertainty about oneself
(Ashford, De Stobbeleir, & Nujella, 2016). However, research has shown that
this assumption may be too simplistic. On the one hand, people seem rather
less than more likely to seek feedback with higher levels of uncertainty
about themselves (Anseel, Beatty, Shen, Lievens, & Sackett, 2013). On the
other hand, ambivalent feedback, that invokes both positive and negative
emotions and thus may, in fact, increase uncertainty rather than reduce
is, has been found to be particularly beneficial for performance, notably
creative performance (Harrison & Dossinger, 2017). As Ashford et al. (2016)
have stated in their recent review, learning appears to be a better framework
for understanding feedback seeking behavior than uncertainty reduction,
which opens up new routes for inquiry into feedback seeking as a potentially
uncertainty-creating behavior.
The final example, stress at work, at first sight is probably the least likely
phenomenon to discuss in support of arguments concerning benefits of
uncertainty. One prominent model to explain stress at work focuses on the
mismatch between job demands and job control (Karasek, 1979), pointing
especially at detrimental effects when job demands are high, but job control
is low. The job design literature has provided complementary evidence
by showing that high demands—when coupled with high control—have
positive effects on motivation and well-being at work (Parker, Morgeson,
& Johns, 2017). Raising job demands usually entails increasing uncertainty
also, because more complex tasks tend to contain elements that are not
fully predictable and difficult to routinize (Griffin, Neal, & Parker, 2007). In
order to manage this uncertainty well, employees need to be empowered to
make decisions themselves rather than defer to managerial control. Turning
this thinking around, if one wants to increase employee motivation and

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commitment by providing employees with more opportunities to exercise
their own capabilities and judgment, one has to introduce uncertainty into
their jobs (Slocum & Sims, 1980).
UNCERTAINTY MANAGEMENT IN TEAMS

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Besides many theories in social psychology that aim at explaining particular
social processes, two overarching frameworks refer to team processes and
outcomes more generally. They both happen to be related to uncertainty.
One framework is a team-level version of self-regulation theory, where now it
is not the individual actor who sets goals and strives to achieve them in the
face of potentially adverse environmental conditions, but it is the team, with
cross-level interactions tying team-level and individual-level self-regulation
together (Chen & Kanfer, 2006). The second framework, building and
expanding on self-regulation, is team adaptation, where the emphasis is on
the interaction between teams and their environments and the processes
that allow teams to readjust team functioning during and after external disturbances (Kozlowski & Bell, 2008). One frequently used distinction for such
adaptation processes is that between action and transition phases in teams
(Marks, Mathieu, & Zaccaro, 2001). Processes during transition phases are to
prepare teams for what is to come, while processes in action phases comprise
execution of plans and ad hoc adjustments if needed. Beyond this short-term
view on team adaptation, there are also models that describe longer-term
adaptation as teams get to know each other, learn from their daily working
together and develop and adjust routines for accomplishing their tasks
(Dionysiou & Tsoukas, 2013). As in individual-level theories, the dominant
assumption is that uncertainty stems mostly from the environment and that
teams have to reduce it to operate effectively.
Three team-level phenomena in work organizations are described to illustrate the necessity to broaden the view on uncertainty management at that
level as well: leadership, diversity, and voice. Implicit in much of the research
on leadership is the assumption that leaders reduce uncertainty for their subordinates by providing guidance and support, be it, for instance, as transformational leaders who give a greater sense of purpose to their teams by
invoking and enacting a vision of a desirable organizational future, or as
directive leaders who set goals and plan and supervise their achievement.
In recent years, research has begun to look at leadership coming not only
from the formal leader, but also from team members, resulting in different
forms of shared or distributed leadership (Denis, Langley, & Sergi, 2012).
Findings from a range of team settings seem to indicate that shared leadership is beneficial for team performance, but questions remain, for instance
in relation to the management of complex tasks (D’Innocenzo, Mathieu, &

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Kukenberger, 2016). One could argue that sharing leadership involves both
reducing uncertainty as more resources can be devoted to managing uncertainty, but it also creates uncertainty as roles are redefined and adapted in
the team. Depending on the balance between these two processes in a particular team, shared leadership may or may not be suitable for accomplishing
complex tasks.
Diversity in teams has received growing attention over the last decades,
especially as a means to foster innovation (Anderson et al., 2014). In simple
terms, having team members with diverse knowledge, expertise, and
attitudes working together should infuse variety into decision-making and
problem-solving that promotes information elaboration and creation of
novel and useful ideas. However, the evidence for team diversity being
beneficial for innovation or more generally for team performance is mixed
because diversity also brings about frictions and conflict based on processes
of social categorization, such as stereotyping. Over the years, a multitude
of mediators and moderators have been suggested to further explain under
which conditions information elaboration or social categorization becomes
more salient (Van Knippenberg & Mell, 2016). Only recently, though, the
fact that team diversity creates uncertainty for team members about the
right ways to think and act has been acknowledged as one important underlying mechanism. Following Hogg’s (2007) uncertainty–identity theory,
uncertainty reduction is considered a motive for members’ identification
with diverse teams and for specific behavior in those teams, such as performance monitoring (Guillaume, Dawson, Otaye-Ebede, Woods, & West,
2017).
Lastly, voice or speaking up in teams is a phenomenon closely linked to
uncertainty management (Grote, 2015). Voice has been defined as “discretionary communication of ideas, suggestions, concerns, or opinions about
work-related issues with the intent to improve organizational or unit functioning” (Morrison, 2011, p. 375). Uncertainty comes into play as individuals
evaluate costs and benefits of speaking up for themselves, but speaking up
can also increase uncertainty for the team. When concerns are raised about a
particular course of action or a reassessment of a situation is offered, the need
for more knowledge is created. Often this increased uncertainty is exactly
what keeps people from speaking up, especially in critical situations where
the team’s emotional and cognitive resources are stretched already (Bienefeld
& Grote, 2012). The uncertainty resulting from voicing doubts and new ideas
will be beneficial if the team is able to shift into a mode of divergent thinking
during its on-going activity, but is also capable of converting back to convergent thinking to adapt their course of action in a timely manner. Important
prerequisites for this to happen are inclusive leadership and psychological
safety because they create a nonthreatening climate within the team, which

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frees resources for problem-solving and learning (Nembhard & Edmondson,
2006).
UNCERTAINTY MANAGEMENT IN ORGANIZATIONS

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Starting from early studies on contingencies for the design of organizational
structures and processes to today’s strategic management literature, environmental uncertainty is considered a key construct for understanding and
shaping organizational action (Van de Ven, Ganco, & Hinings, 2013). Two
important theoretical frameworks that spell out mechanisms for uncertainty
management in organizations are contingency theory and organizational
control theory. Contingency theory was developed in a series of models
in the 1960s, all following the main thrust that Tayloristic minimization of
uncertainty as a fundamental design principle can only be successful in
environments with few uncertainties and well-known tasks, while all other
conditions require designs that support active adaptation to uncertainties.
Much of recent writing has emphasized that contingencies may not be so
clear-cut and that many organizations need to adopt mechanisms for reducing and absorbing external uncertainty simultaneously. In their discussion
of the future of contingency theory, Van de Ven et al. (2013) also argued for
the need to pay more attention to the generative capacity of individuals in
organizational design as a source of internal uncertainty.
Organizational control theory has evolved from the question of how
managers can ensure that their subordinates direct their efforts toward
achieving the organization’s goals (Cardinal, Kreutzer, & Miller, 2017).
Uncertainty is regarded as an inherent element in the manager–subordinate
relationship based on agency theory as outlined in economics, which holds
that subordinates’ motivation and behavior is geared to own personal goals
rather than the organization’s objectives unless controlled by their managers. Similar to contingency theory, different kinds of control mechanisms
are assumed to match particular organizational conditions. Long, Sitkin,
Cardinal, and Burton (2015) contrasted the agency perspective of organizational control with an information processing perspective, which focuses
more on managers’ role in reducing uncertainty for their subordinates
rather than for themselves. They find that combinations of different control
mechanisms generally are more effective than a single mechanism and that
with increasing levels of uncertainty stemming from highly complex tasks,
informal control mechanisms such as frequent personal meetings become
more important than formal control of subordinates’ behavior or output.
These conceptual developments align with a general tendency in organizational research to explore more complex patterns of uncertainty management rather than emphasize uncertainty reduction alone. To illustrate this

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general tendency, I discuss three research streams: innovation, organizational
change, and managing paradox.
Innovation research has long been dominated by the distinction between
exploitation and exploration introduced by March (1991). Exploitation
aims at making the most of existing knowledge, in terms of highly efficient
routine processes accomplishing well-established goals. Exploration, on the
other hand, is concerned with knowledge creation and learning, which may
eventually lead to new options for exploitation. Recent management literature has addressed the necessity to concurrently exploit and explore to stay
competitive, termed ambidexterity, which has been shown to be particularly
important in highly uncertain environments (O’Reilly & Tushman, 2013).
An on-going debate concerns the question of whether radical innovation
on the one hand and routine performance/incremental innovation on
the other, can—simultaneously or sequentially—happen within the same
organizational unit or only in parallel structures geared toward one or the
other. A more explicit consideration of uncertainty management might
help to solve this conundrum because it would help to study particular
configurations of uncertainty and effective mechanisms for responding to
those uncertainties. Furthermore, the deliberate introduction of uncertainty,
which is central to any organizational initiative aimed at radical innovation,
should be addressed.
Organizational change is a fascinating domain with respect to uncertainty
management. Core to any change is by definition an increase in uncertainty
for everyone affected by the change, which is thought to be a root cause for
resisting change as well (Bordia, Hobman, Jones, Gallois, & Callan, 2004).
Providing opportunities for active participation in the change process is
believed to alleviate resistance because it grants individuals some control
over the process and helps to reduce uncertainty. Furthermore, the necessity
of change needs to be irrefutable for individuals to be willing to bear the
uncertainty. Interestingly, though, Sonenshein (2010) found that managers
simultaneously presented change as significant and insignificant in their
communication to employees in order to reach out to both employees who
welcomed change and those who feared it. Uncertainty is prevalent not only
for the people affected by the change but also for those driving the change.
One of the few studies which has examined change agents themselves
looked at the impact of their personal support networks on the successful
implementation of change (Battilana & Casciaro, 2012). It was found that
changes which implied a higher degree of uncertainty seemed to require
more diverse networks.
Contingency thinking is pervasive in the organizational literature, as many
of the above examples show. However, the assumption that there are best
matches between organizational and environmental characteristics, which

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lead to either/or choices, has been challenged by proponents of paradoxical
thinking. Their main argument is that any situation an organization can find
itself in will require a mix of seemingly contradictory responses, such as
concurrently catering for efficiency and adaptability, routine and innovation,
and stability and change (Schad, Lewis, Raisch, & Smith, 2016). The necessity
to manage paradoxical tensions has been elaborated on in a number of research
domains, innovation and organizational change being among the prime
examples (Lüscher & Lewis, 2008; Miron-Spektor & Erez, 2017). While there
is still substantial debate around the question of how organizations—and
individuals and teams for that matter—can simultaneously respond to
conflicting demands (Grote, Kolbe & Waller, 2018; O’Reilly & Tushman,
2013; Schad et al., 2016), the literature on paradox opens a new perspective
on uncertainty management, which will be expanded on in the concluding
section of this essay.
AN ATTEMPTED SYNTHESIS ACROSS LEVELS AND SOME RESEARCH
RECOMMENDATIONS

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The discussion up to this point has provided ample evidence that to date
uncertainty has been treated in a rather one-sided manner with reducing
external uncertainty as the dominant focus. I have also given some examples
for an emerging broader view, where processes of reducing and creating
uncertainty are intertwined and where uncertainty may be beneficial, such
as in creativity, innovation, organizational change, learning about oneself
through feedback seeking, carrying out more demanding jobs, sharing
leadership functions, working in more diverse teams, or voicing concerns in
team decision-making.
However, a more agentic approach to uncertainty management still raises
many questions of how responsiveness to external uncertainty and the deliberate creation of internal uncertainty interact to bring about success or failure
at the individual, team, and organizational level. The literature on managing
paradox (Schad et al., 2016) provides an important starting point for research
into these questions because it emphasizes the concurrent consideration of
seemingly contradictory, but interdependent management practices. Tensions between concepts such as learning versus performance, cooperation
versus competition, or profit versus purpose are assumed to be fundamental to constituting these concepts themselves, as two sides of the same
coin. Thus, research on any of these concepts should adopt an and/both
rather than an either/or perspective in order to gain a more complete
understanding of the tensions involved and the best ways to manage them.
Studying uncertainty management with a paradox lens involves an expansion toward a multi-level framework, as processes of reducing and creating

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uncertainty may simultaneously happen at different levels of an organization
and also outside its boundaries. For instance, in their study of new ventures,
Hmieleski and Ensley (2007) found intriguing configurations of team diversity and leadership styles indicating that responses to external uncertainty
are themselves a mix of reducing (directive leadership, homogenous teams)
and increasing uncertainty (empowering leadership, heterogeneous teams).
These responses incorporate the team level, but also the organizational level
in as much as the use of particular leadership styles and team compositions
constitute deliberate decisions by top management.
A research agenda built on a multi-level framework of uncertainty reduction and creation in organizations will also stimulate psychological and
organizational theorizing more generally. Introducing deliberate increases
of uncertainty into models of self-regulation opens up new avenues for
research where individual agency reaches beyond finding the best ways to
protect goal striving against external threats. Especially, more knowledge
on how new goals and the uncertainty surrounding their achievement are
embraced is dearly needed (Scherbaum & Vancouver, 2010). Examining
self-regulatory processes may benefit from the rigorous operationalization
of uncertainty in decision-making research in order to better understand the
ambiguity of uncertainty itself for decision-makers. Such research would
align well with the growing literature that shows the importance of harnessing cognitive and emotional ambivalence for successful performance.
A more complete understanding of the interplay between uncertainty
creation and reduction at different levels of the organization is also crucial
for enriching contingency theory with more elaborate configurations of individual agency and structural mechanisms and for complementing models of
organizational control by considering uncertainties at different levels of the
organization. Lastly, examining the tensions between uncertainty reduction
and uncertainty creation for individuals, teams, and organizations becomes
ever more important with the current surge of opportunities and challenges
attached to the so-called second machine age (Brynjolfsson & McAfee, 2014).
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Gudela Grote is a professor of Work and Organizational Psychology at the
Department of Management, Technology, and Economics at the ETH Zürich.
She studied psychology at the University of Marburg and the Technical
University in Berlin. She received her PhD from the Georgia Institute of
Technology, Atlanta. In her research, Prof. Grote strives to provide psychologically based concepts and methods for integrative job and organizational
design, taking into consideration the changing technological, economic
and societal demands and opportunities. Of special interest in her work
is the increasing flexibility and virtuality of work and consequences for
the individual and organizational management of uncertainty. Application
areas are teamwork and standardization in high-risk systems, effects of new
technologies on work processes, and the management of the employment
relationship. Prof. Grote is associate editor of the journal Safety Science and
member of the editorial board of several other journals. She has published
widely on topics in organizational behavior, human factors, human resource

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management, and safety management and has consulted with major private
and public organizations. Gudela Grote has been Head of the Department of
Management, Technology, and Economics at ETH Zürich and is past president of the European Association of Work and Organizational Psychology.
She is a fellow of the Society for Industrial and Organizational Psychology.
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