THE CHANGING

ENVIRONMENT
Simple–Complex Dimension
• The simple–complex dimension concerns environmental complexity,
which refers to heterogeneity, or the number and dissimilarity of
external elements relevant to an organization’s operations.
• Example :
Hardware Store in a
SIMPLE Suburban
Community

University &
COMPLEX
Aerospace firms
Stable–Unstable Dimension
• The stable–unstable dimension refers to whether elements in the
environment are dynamic.
• An environmental domain is stable if it remains the same over a
period of months or years. Under unstable conditions, environmental
elements shift abruptly.
• Example :
STABLE Public Utility

E – Commerce &
UNSTABLE
Music
 Framework for Assessing
Environmental Uncertainty
Organizational Departments Differentiation to
Meet Needs of Sub-environments
R&D Manufacturing Sales
Scientific Raw Materials • Customers
Journals Labor • Distribution
Research Centers Suppliers System
Professional Production • Advertising
Equipment Agencies
Association
• Competitors
Adapting To a Changing
Environment
 Adding Positions and Departments
Director of
Media relations
New
Positions Director of
Campaign
Management
Uncertainty Complexity

Procurements

New
Marketing
Departments

Finance
 Building Relationships
A. Buffering roles

Buffer
Department A

Uncertainty
Uncertainty of Purchasing Human Resource
Technical Core Concerning
Materials Department Department
Employees

Buffer
Department B
Building Relationships
• Boundary Spanning Roles
Link and Coordinate organizations with key elements in the external
Environments.
Examples:
a. Market-research departments
b. Engineering and Research Departments
 Differences in Goals and Orientations
R&D Manufacturing Sales
Characteristics
Departement Department Department
New
Efficient Customer
Goals development,
production satisfaction
quality
Time Horizon Long Short Short
Interpersonal
Mostly task Task Social
Orientation
Formality of
Low High High
Structure
 Environmental Uncertainty and
Organizational Integrators
Industry Plastic Food Container

Environmental
High Moderate Low
Uncertainty

Department
High Moderate Low
Differentiation
Percent of
Management in 22% 17% 0%
Integrating Roles
 Organization Forms
Mechanistic
Tasks are broken down into
specialized, separate parts.
Tasks are rigidly defined.
There is a strict hierarchy of
authority and control, and there
are many rules.
Knowledge and control of tasks
are centralized at the top of the
organization.
Communication is vertical.
Organic
Employees contribute to the
common task of the department.
Tasks are adjusted and redefined
through teamwork.
There is less hierarchy of
authority and control, and there
are few rules.
Knowledge and control of tasks
are located anywhere in the
organization.
Communication is horizontal.
 Role of Planning and Forecasting in a
Changing External Environment
1. Keep organizations geared for speedy response
2. Concentrate on day-to-day operations efficiency
3. Prepare contingencies for different external environment
impacts
4. Soften adverse impacts of external shifts
Contingency Framework for Uncertainty and
Organizational Responses
Dependence on External Resources
• Resource dependence means that organizations depend on the
environment but strive to acquire control over resources to minimize
their dependence.
• Organizations are vulnerable if vital resources are controlled by other
organizations, so they try to be as independent as possible.
Organizations do not want to become too vulnerable to other
organizations because of negative effects on performance.
Influencing External Resources

there are two strategies:

1. Establishing Formal Relationships

2. Influencing Key Sectors
Establishing Formal Relationships

Includes:
1. Acquire an Ownership Stake
2. Form Joint Ventures and Partnerships
3. Lock in Key Players
4. Recruit Executives
5. Get Your Side of the Story Out
Influencing Key Sectors

Includes:
1. Change Where You Do Business
2. Get Political
3. Unite with Others
4. Don’t Fall into Illegitimate Activities
Organization-Environment Integrative
Framework