In the winter of 1918–1919 a flu pandemic swept the world killing millions. In 1921, Frank Knight published his book, Risk, uncertainty and profit. Knight distinguished between risk and uncertainty, defining uncertainty as a setting where neither the possible outcomes nor the probability of those outcomes are known or knowable when a decision is being made (Knight, 1921). Knight acknowledged that in an ever-changing world future events have so many unknown factors that it is incalculable. Frank Knight was almost certainly influenced by the pandemic of 1918–1919.
In what is an ironic twist of fate, the Academy of Management’s Special Theory Forum (STF) on “The Implications of Uncertainty for Management and Organization Theories,” will be published just after the coronavirus pandemic of 2019–2020. The conversation for the special issue was spearheaded by a conference on Knightian Uncertainty hosted by Sharon Alvarez in the spring of 2018, University of Pittsburgh, and attended by almost 100 scholar participants. The call for the STF went out in 2018, when most of us were not anticipating nor expecting a pandemic. In a recent Wall Street Journal article (Schrager, 2020), the current pandemic was cited as a case of Knightian Uncertainty.
Knight’s work mostly influenced economics, and more recently entrepreneurship, has generated fewer insights in business and management. Indeed, much of the work by management scholars has often been characterized as being risk-based and behind the phenomena in terms of our theory development. However, in the case of this special topic forum on Knightian Uncertainty, the management scholars involved as editors, authors, reviewers, and interested others have provided cutting edge management theory ahead of the phenomena. In this groundbreaking AMR special topic forum, four papers have been accepted, and another three are still under review, that address the implications of Knightian Uncertainty for management scholars.
Please check out these ground-breaking papers:
Editors’ Comments: Should Management Theories Take Uncertainty Seriously?
Sharon Alvarez, Allan Afuah and Cristina Gibson
Probability Logic Fails in Immitigable Uncertainty, But Strategic Logic Does Not
Mark D Packard and Brent B. Clark
Branching and Anchoring: Complementary Asset Configurations in Conditions of Knightian Uncertainty
Curba Morris Lampert, Minyoung Kim and Francisco Polidoro Junior
When Is More Uncertainty Better? A Model of Uncertainty Regulation and Effectiveness
Mark Anthony Griffin and Gudela Grote
Opportunities as Artifacts and Entrepreneurship as Design
Henrik Berglund, Marouane Bousfiha and Yashar Mansoori
Elbows to all,
Sharon Alvarez
Knight, F. H. 1921. Risk, uncertainty and profit. New York: Hart, Schaffner and Marx.
Schrager, A. March 23, 2020. “Risk, uncertainty, and Coronavirus, We don’t have enough data to know whether drastic lockdowns are worth the economic damage.” Wall Street Journal Opinion, Commentary.
