Strategy And Decision-making In Highly Complex And Dynamic Environments

M. Schleith & L. Pretorius, H. Steyn

Organizations face increasing challenges in maintaining their competitiveness in highly dynamic and uncertain environments. This paper presents an initial System Dynamics model for strategy definition and strategy implementation under deep uncertainty. The proposed model combines System Dynamics with an iterative decision-making approach and considers the dynamic relationships between strategic decisions, implementation activities, competitiveness and financial capabilities. The simulation results show how the speed of strategy implementation influences competitiveness and financial capabilities. They also show the importance of continuously adapting strategic actions during the implementation process. From a management perspective, the model provides a structured approach to better understand the relationships between strategic decisions, implementation activities and their impact over time. It supports managers in identifying actions with high strategic potential, continuously monitoring their implementation and adjusting priorities when assumptions or environmental conditions change. Furthermore, the results indicate that delays in strategy implementation can reduce competitiveness. Such delays can also tie up financial resources that could otherwise be available for future strategic actions. The model therefore provides an initial basis for supporting strategy definition and implementation in highly complex and dynamic environments. Further research will include empirical calibration and validation of the proposed model using qualitative and quantitative data from the German automotive industry.

IEEE Engineering Management Review, 2026

DOI: 10.1109/EMR.2026.3731285

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