Information Overload and Uncertainty in Strategic Change

In the context of strategy implementation, information overload is a key factor that greatly influences the effectiveness of strategic change. In large organizations, top management is responsible for creating a supportive organizational climate aiming to increase job satisfaction and eliminate uncertainty deriving from strategic change. Yet, considering that information overload creates additional uncertainty, it becomes critical to cope with it to ensure effective strategy implementation.

Information Overload Defined

Bertram Gross defines information overload as the difficulty in understanding an issue and make the right decisions because of the presence of excessive information. In the context of strategy implementation, information overload is a strategic risk generated from wrong decisions taken by overburdened managers, who spend a lot of time on looking for information rather than evaluating it. In doing so, it often results in low quantity, low value, high ambiguity and dysfunctional behaviors, but most importantly in uncertainty.

Information Overload & Uncertainty

The key factors that lead to uncertainty as a result of information overload are the following:

a) External & Internal forces

Uncertainty is mostly related to external situations that influence an organization. Particularly large organizations may be affected by external key forces which define the broader socioeconomic environment that they operate, but also by internal organizational processes that affect the managerial interactions and increase uncertainty. Under pressure people react with stress, panic, and anxiety and thus uncertain environment decisions are subject to emotional rather than rational conditions.

b) Intense Acquisition Plans

Large organizations typically implement intense acquisition plans aiming to expand both locally and globally. This creates uncertainty to organizational members, especially in lower levels, as a result of psychological strain during organizational change. Strategic change requires heavy decision making and heavy spending on branch network expansion. It also implies information overload for middle management to effectively monitor the environment and identify the expansion opportunities. In reality, the organization puts pressure on all organizational members, at all levels, by expecting them to proceed to radical changes as to anticipate the transition phase following the intense expansion plan. Pressure creates uncertainty.

c) Great Geographical Expansion

Large organizations that constantly expand geographically cannot implement effective participative decision making. Through strategic flexibility reflected on rapid communication between teams operating in the local and international business units of the organization, organizational structure is integrated in the strategic decision making. However, extreme pressure to achieve consensus lacking direct contact because of the geographical distance creates pressure that eventually creates uncertainly.

How to Cope with Information Overload?

Quality of interaction and quality of information is essential to the successful strategy implementation. In the interactions occurring within large organizations managers should act as information brokers in order to ensure effective transfer of information to all organizational levels. Effective transfer of information facilitates the transition period deriving from strategy formulation and resulting in strategy implementation stage.

Top management should emphasize fair organizational processes and structures, and organizational harmony to make employees feel secure. Given that large organizations often experience states of crisis, it is more likely to encounter authoritative leadership which impedes the effective communication of the strategic goal and provides little delegation to subordinates in the decision making process. This creates uncertainty to organizational members as a result of unfair organizational processes.

Finally, the need for change should be perceived as justifiable and instill trust and confidence to employees. This presupposes a bottom-down approach to lower level employees using adequate communication channels to ensure understanding of the organizational culture.

Sources:

Gross, Bertram M. (1964). The Managing of Organizations: The Administrative Struggle, Free Press of Glencoe, pp. 856

Bower J.L., Gilbert G.C. (2007). How managers' everyday decisions create or destroy your company's strategy. Harvard Business Review, February 2007, 72-79.