Business Case Studies & Business Publications

Managing Economic Uncertainty

Sun, Bo

Technical Note

Managing Economic Uncertainty

Sun, Bo

GEM-0244 | Published June 10, 2025 | 17 Pages Technical Note

Collection: Darden School of Business

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This technical note examines strategic decision-making frameworks for managing economic uncertainty in business and policymaking contexts. The note presents two primary approaches: the "Wait and See" strategy, grounded in real options theory, which emphasizes maintaining flexibility and awaiting better information before making irreversible commitments; and the "Whatever It Takes" strategy, based on minimax principles from robust control theory, which advocates for decisive action to ensure resilience against adverse scenarios. The note also explores uncertainty outsourcing through strategic partnerships as a complementary approach and provides key decision criteria for selecting the appropriate strategy based on a range of factors. The framework emphasizes the importance of building capabilities during stable periods to enable effective uncertainty management when crises emerge. This note's appendix provides practical guidance on measuring the uncertainty of varying sources. At the University of Virginia Darden School of Business, this case is used in a second-year elective course on managing uncertainty, in conjunction with a business case, "From Lab to Market: Navigating Uncertainty" (UVA-GEM-0235); the framework is illustrated through the analysis of the case. The tech note can also be useful for graduate-level classes on uncertainty, strategic decision-making, and risk management, offering both theoretical frameworks and practical tools for navigating complex business environments under uncertainty.