To Shape or Adapt: Knowledge Problems, Epistemologies, and Strategic Postures under Knightian Uncertainty

Despite the longstanding recognition of the importance of uncertainty in strategy, strategy researchers have given limited attention to the distinct challenges and processes involved in strategy making under uncertainty. To address this gap, we build on Knight’s and Shackle’s seminal ideas about how strategists address the incomplete knowledge problems that uncertainty poses. We argue that strategists adopt two distinct strategic postures when crafting strategies in uncertain markets—shaping and adapting—and theorize their constituent elements: intentions, epistemologies, and enactment strategies. Our framework extends current understanding of strategy under uncertainty by integrating research on adapting strategies, based on scientific epistemologies, which guide continuous experimentation and learning, with research on shaping strategies, based on design epistemologies, which guide significant symbolic and resource investments intended to create new market orders.