A Study on Organizational Decision-making from the Perspective of Uncertainty and Ambiguity

This study examines the effects of ambiguity and uncertainty on organizational decision-making using an agent-based simulation framework. The model integrates hyperbolic discounting to capture shifts in decision-makers’ preferences from long- to short-term orientations over time. Ambiguity is defined as unclear organizational goals and decision criteria, whereas uncertainty refers to unpredictable environmental changes. The simulation showed that uncertainty strongly reduces decision efficiency, whereas ambiguity degrades decision quality. The results highlight how excessive ambiguity and uncertainty can lead to organizational resource inefficiencies. Specifically, I found that situations with high ambiguity and low uncertainty produced the least resource-efficient outcomes than situations with both high ambiguity and uncertainty. This study emphasizes the need to design decision processes that consider environmental complexity and recommends further empirical validation.