Chapter 6: Conceptions of Environments
While most researchers recognize that the environment
has a strong influence on organizational behavior, there are many definitions
and conceptions about environments in OB literature. This chapter explores
the diversity of these conceptions.
Hall and Fagen (1956) state that "for a given system, the environment
is the set of all objects a change in whose attributes affect the system
and also those objects whose attributes are changes by the behavior of the
Scott notes four common groupings of organizations in research at the ecological
level -- organization sets, organization
populations, areal organizational
fields, and functional organizational
fields. Different theoretical perspectives use different groups depending
on their research objectives.
Remember that organizational fields and environments evolve over time. Organizations
may develop temporary alliances with other organizations for specific purposes
(even when competing in other arenas). Areal organization definitions are
useful in some areas (communities) but not in others (transportation sytems).
Various researchers have developed typologies to describe organizational
environments. Emery and Trist classified
them by extent of interlocking relationships, and Warren based his on
Meyer and Scott (1983) define two types of organizational environments --
technical and institutional.
One can also cross classify these two environments according to the relative
amount of pressure an organization encounters:
Subjective vs Objective Definitions of Environments
Should we rely on subjective or objective definitions of environments? Lawrence
and Lorsch (1967) and Weick (1979) suggest that basing it on participant's
perceptions is the best (if not only) way. Weick notes that participants
enact their environment, selectively perceiving and modifying their environment,
March (Cohen and March 1974) adds to this through definition of an attention
structure to "describe the distribution of connections among people,
types of information sent and received, distribution of problems,and (decision
rules)" (Scott p 141).
Ultimately, you can't separate subjective(enacted) and objective characterizations
of environments. Parts of the enviroment can affect organizational outcomes
even if they are not perceived. What we measure dependes on what we are
trying to predict -- predicting organizational choices may rely on participant
perceptions, but predicting organizational outcomes requires additional
information potentially unknown to the participants.
Organizations and Environments
Contingency and resource depedency theorists argue that organziations can
adapt to environmental changes, while population ecologists emphasize structural
intertia that prevents adaptation -- more optimal organizational forms are
selected, and less optimal ones are replaced. But organizations also influence
their environments, through advertising, building contracts with suppliers,
mergers, lobbying, etc. Organizations can also select environments by changing
their product mix or diversifying.
Absorption and Interpenetration
Organizations can absorb part of the environment (through vertical integration)
or return part of their organization to the environment (outsourcing). All
of this makes boundary definitions difficult.
The Evolution of Environments
The prevelant view is that modern organizational environments are becoming
more complex at an increasing rate (Emery and Trist, 1965), largely through
technical change. This means that uncertainty also increases, and the ratio
of externally to internally induced changes also is increasing (Scott p.
147). This trend is still unclear, however. and there are instances where
changing governance structures and technical changes may actually reduce
"Organizations are viewed as interdependent with environments in a
number of senses. Participant's perceptions of their environments together
with the attention structures of organizations result in enacted environments
that are products of both environmental features and organizational information
systems. Environments directly affect organizational outcomes, which in
turn affect subsequent perceptions and decisions. Environments influence
organizations, but organizations also modify and select their environments.
And environments supply the materials and ingredients of which organizations
are composed" (Scott p. 149)