Organizational

Environments
Environment
 Is the set of pressures and forces around an
organization that have the potential to affect the
way it operates and its ability to acquire scarce
resources (material & skilled employees;
information; support of external stakeholders like
customers)

 Forces affecting organizations are:

 Competition from rivals for customers
 Rapid change in technology
 Increase in prices of raw material raising the operating
cost

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Dimensions of Organizational
Environment (Dess & Beard, 1984)
 Munificence (richness): Capacity

 Dynamism: Stability-instability, turbulence

 Complexity: Homogeneity-heterogeneity,
concentration-dispersion

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Enacted Environment
 How the environment becomes known to the
organization (i.e., its managers) (Miles & Snow, 1974)
 Organization responds only to what it perceives;
those things that are not noticed do not affect its
decisions and actions
 Same "objective" environment may appear
differently to different organizations
 Organizational information processing systems
become critical in determining how the
organization adjusts to its environment

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Miles & Snow Typology of Strategic
Choices
 Prospectors
 Suited to a dynamic, growing environment,
where creativity is more important than
efficiency. More likely to have an organic
organizational structure

 Defenders
 Concerned primarily with internal efficiency
and control to produce reliable, high-quality
products for steady customers. Suitable for
stable environment or declining industry. More
likely to have a mechanistic structure
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Miles & Snow Typology of Strategic
Choices
 Analyzers
 Trying to maintain a stable business while
innovating on the periphery
 Balances efficiency and learning

 Reactors
 Respond to environmental threats and
opportunities in an ad hoc manner
 Design characteristics may shift abruptly

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Organizational Configuration
Five basic parts of the organization (Mintzberg,
1981):

 Technical / Operating Core

 Management
 Strategic Apex (Top Management)
 Middle Management
 Techno-structure
 Support Staff

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Mintzberg’s Typology

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Environment & Structure
 Successful firms in a stable environment tend to
have “mechanistic” or highly bureaucratized
structures and processes;

 Successful firms in changing and uncertain

environment tend to have “organic” or flexible
structures and processes (Burns and Stalker, 1961).

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Environment & Structure
As environments become more
turbulent, organizations change…
 From vertical to horizontal structures
 From routine tasks to empowered tasks
 From formal control to shared information
 From competitive to collaborative strategy
 From rigid to adaptive control

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Contingency Framework for Environmental Uncertainty
and Organizational Responses

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