Resilience of Medium-Sized Enterprises in VUCA Conditions / Dr. Melika Molk Ara

Fara Eghtesad Bein-al-Melal | The term “resilience” has gained significant traction in the discourse among industrialists and economists, particularly following the onset of the COVID-19 pandemic, which inflicted substantial losses and damages on various industries and businesses. Consequently, the enhancement of resilience has become a focal point in numerous discussions and research endeavors. But what does resilience fundamentally entail? The economic crisis of 2007 catalyzed the emergence of the Fourth Industrial Revolution, which was subsequently followed by the health crisis of 2020, paving the way for the Fifth Industrial Revolution. This latest revolution is characterized by far loftier objectives than merely producing and providing profitable products; it emphasizes three core pillars: “humanity, sustainability, and resilience.” The third pillar, resilience, ensures that industrial production can sustain and support critical infrastructures during times of crisis. In this context, the establishment of adaptable production capacities and the design of flexible organizational processes can mitigate adverse effects. The role and power of industries in the Fifth Industrial Revolution extend beyond mere employment and profit generation; indeed, industry serves as a resilient agent for fostering social welfare. The framework of the Fifth Industrial Revolution posits that industry, particularly in Europe, must encompass the triad of sustainability, humanity, and resilience to emerge as a competitive and desirable entity in the future. While the Fourth Industrial Revolution focused on enhancing productivity through emerging technologies, the Fifth Industrial Revolution is pivoting towards social transformations and emerging realities. In this regard, the concept of resilience is often discussed within the context of VUCA conditions. How can we analyze this phenomenon? Given the profound changes across various cultural, social, political, and economic domains, today’s world has become increasingly unstable and ambiguous. The volatility, uncertainty, complexity, and ambiguity inherent in contemporary issues have rendered the acronym VUCA—standing for Volatility, Uncertainty, Complexity, and Ambiguity—an essential managerial shorthand. The primary challenge within the VUCA world is forecasting future scenarios while enhancing collaboration among businesses through modern solutions. Elements such as decision-making and communication emerge as pivotal factors for success in achieving organizational goals. Regarding the first component of VUCA—volatility—it must be acknowledged that volatility refers to unstable and variable conditions. The current world is undergoing such rapid changes that the risks associated with these fluctuations complicate decision-making processes, necessitating optimal decisions made in real-time. In this context, the necessity for resilience in volatile conditions is more pronounced than ever. Concerning the second component—uncertainty—it is crucial to note that a multitude of unpredictable events occur globally, making effective forecasting and resource allocation exceedingly challenging for decision-makers. The rapid pace of environmental changes contributes to this uncertainty. The third component—complexity—encompasses issues such as chaotic problems, a lack of causal chains, and a certain level of confusion surrounding organizations. The volume of information continues to increase, with interdependencies that must be considered. The complex landscape of today demands a perspective that transcends collective views on threats and opportunities. The fourth component—ambiguity—arises when the meaning of a subject remains unclear even with sufficient information. The diversity and expansiveness of our world contribute to environmental ambiguity.