Management under uncertainty. First, managers often behave as if reality were something objective, stable, and fully available for observation.

However, organizations rarely operate in such a simple world.

Instead, managers interpret incomplete information, competing narratives, conflicting interests, uncertain evidence, and changing environments before making decisions.

Therefore, management may be better understood not as the search for absolute certainty, but as the disciplined interpretation of uncertain realities.

The Limits of Certainty

Initially, the work of Werner Heisenberg offers an important intellectual warning.

In physics, the uncertainty relations show that certain properties, such as position and momentum, cannot simultaneously be specified with unlimited precision. Philosophers of physics continue to debate exactly what this means, including whether it concerns measurement, knowledge, physical indeterminacy, or the limits of classical concepts. Stanford Encyclopedia of Philosophy

Therefore, it would be incorrect to say that Heisenberg demonstrated that “everything is uncertain” or that social reality is subjective.

Nevertheless, his work suggests a broader intellectual lesson: the way we observe, measure, and describe a phenomenon can affect what we are able to know about it.

Consequently, managers should be cautious whenever an organizational problem is presented as completely obvious.

Organizations Do Not Simply Discover Reality

Moreover, organizations do not only observe their environments.

Instead, they classify information, select indicators, establish categories, define priorities, create reports, choose terminology, and decide which facts deserve attention.

As a result, what an organization calls “reality” is partly shaped by its systems of interpretation.

A sales decline, for example, can be described as:

• a market problem;
• a pricing problem;
• a leadership problem;
• a positioning problem;
• a customer-experience problem;
• a productivity problem;
• or a temporary fluctuation.

Importantly, the same event can generate very different organizational responses depending on how it is represented.

Power and the Construction of Organizational Reality

Furthermore, not everyone has the same ability to define which interpretation becomes dominant.

In organizations, senior executives, boards, consultants, analysts, regulators, major investors, technology platforms, and other influential actors often have greater power to define the language through which problems are understood.

However, this does not require assuming that a single elite secretly controls reality.

Rather, different groups possess unequal resources to frame problems, establish agendas, produce accepted knowledge, and influence which interpretations become legitimate.

Prompts as a Metaphor for Power

Today, artificial intelligence offers a useful metaphor.

For example, when we generate an image with AI, we begin with a prompt.

The prompt tells the system:

• what should be emphasized;
• what should be excluded;
• what perspective should be used;
• what style should dominate;
• and what kind of result should appear.

Consequently, two different prompts can generate two very different representations of the same underlying subject.

Likewise, organizations constantly create their own forms of prompts.

A strategic question such as:

“How can we reduce costs?”

creates a different field of analysis from:

“How can we create more value?”

Similarly:

“Why are employees resisting change?”

is different from:

“What conditions are preventing this change from working?”

Therefore, the formulation of the question already influences the reality that managers will subsequently examine.

Who Writes the Prompt?

More importantly, managers should ask who is defining the initial question.

Sometimes, the board writes the prompt.

Sometimes, senior management does.

Sometimes, consultants, regulators, financial markets, technology systems, customers, or political institutions influence it.

Consequently, the first strategic task may not be answering the question.

It may be asking:

Who defined this question?

Why was it defined this way?

What assumptions does it contain?

What does it exclude?

Who benefits if this interpretation becomes dominant?

Elites, Institutions and Competing Realities

Furthermore, societies and organizations contain groups with different degrees of influence.

Therefore, powerful groups can often promote particular interpretations more effectively than less powerful groups.

For instance, those who control capital, institutions, information systems, professional expertise, communication channels, or formal authority may have greater ability to establish categories and define priorities.

However, power is rarely absolute.

Instead, competing actors continuously challenge existing interpretations, introduce new evidence, redefine problems, and construct alternative narratives.

Thus, organizational reality is often contested rather than fixed.

Management as Interpretive Responsibility

For this reason, management should involve more than accepting the dominant representation of a problem.

Instead, managers should actively test the assumptions behind that representation.

A responsible manager might ask:

What evidence supports this interpretation?

What evidence contradicts it?

What alternative explanation exists?

Which variables are missing?

Whose perspective is absent?

What would happen if we reformulated the original question?

As a result, management becomes partly an exercise in disciplined skepticism.

Strategic Decisions Without Absolute Certainty

Nevertheless, organizations cannot wait until uncertainty disappears.

Indeed, complete certainty is rarely available.

Therefore, decision-making requires action under incomplete knowledge.

The challenge is not to eliminate uncertainty.

The challenge is to distinguish:

• what is known;
• what is assumed;
• what is interpreted;
• what is uncertain;
• and what remains unknown.

Consequently, better management depends on recognizing the limits of knowledge without becoming incapable of action.

A Recursive Approach to Meaning

In this context, two simple questions become particularly useful:

What does it mean?

What does it represent?

Then, each answer can be questioned again.

A falling performance indicator may represent declining sales.

But what does declining sales represent?

Perhaps weaker demand.

And what does weaker demand represent?

Perhaps changing customer preferences, stronger competition, poor positioning, reduced purchasing power, or another cause entirely.

Eventually, the analysis may reach evidence, assumptions, interests, values, mechanisms, or a point where no further conclusion is justified.

Therefore, the objective is not endless interpretation.

It is to avoid premature certainty.

The Manager as Reality Tester

Ultimately, managers do not simply receive reality.

They receive representations of reality.

Reports, dashboards, forecasts, presentations, consultant recommendations, market research, financial indicators, and strategic plans are all representations.

Therefore, one of the manager’s most important responsibilities is to test them.

Finally, management under uncertainty requires humility.

The question is not:

“What is the definitive truth?”

The more useful question may be:

“Given the evidence available, what interpretation is currently the most defensible, what alternatives remain plausible, and what decision can we responsibly make now?”

Final Thought

Ultimately, uncertainty is not a failure of management.

It is part of management.

Therefore, the quality of a decision depends not only on the information available, but also on the questions asked, the assumptions challenged, the interests recognized, and the alternative realities considered.

Perhaps the most dangerous managerial mistake is not uncertainty itself.

It is believing that one interpretation is reality simply because it has become dominant.

Affonso Henriques
PhD by ESADE Business School & Law – Barcelona – Spain