Is the degree of change and the degree of complexity in an organizations environment?
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journal article Dimensions of Organizational Environments: An Exploratory Study of Their Impact on Organization StructureThe Academy of Management Journal Vol. 22, No. 4 (Dec., 1979) , pp. 672-693 (22 pages) Published By: Academy of Management https://doi.org/10.2307/255808 https://www.jstor.org/stable/255808
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Subscribe to JPASS Unlimited reading + 10 downloads Purchase article $29.00 - Download now and later Abstract This study sought to (1) develop a comprehensive typology for interpreting and analyzing organizational environments, (2) empirically test the validity of the typology, and (3) examine the relationships between three environmental characteristics (complexity, change rate, and routineness of problem/opportunity states), perceived environmental uncertainty, and organizational variables. It was found that the three environmental dimensions had a significant impact on organizational characteristics. Journal Information The Academy of Management Journal presents cutting edge research that provides readers with a forecast for new management thoughts and techniques. All articles published in the journal must make a strong empirical and/or theoretical contribution. All empirical methods including (but not limited to) qualitative, quantitative, or combination methods are represented. Articles published in the journal are clearly relevant to management theory and practice and identify both a compelling practical management issue and a strong theoretical framework for addressing it. For more than 40 years the journal has been recognized as indispensable reading for management scholars. The journal has been cited in such forums as The Wall Street Journal, The New York Times, The Economist and The Washington Post. The journal is published six times per year with a circulation of 15,000. Publisher Information The Academy of Management (the Academy; AOM) is a leading professional association for scholars dedicated to creating and disseminating knowledge about management and organizations. The Academy's central mission is to enhance the profession of management by advancing the scholarship of management and enriching the professional development of its members. The Academy is also committed to shaping the future of management research and education. Founded in 1936, the Academy of Management is the oldest and largest scholarly management association in the world. Today, the Academy is the professional home for more than 18290 members from 103 nations. Membership in the Academy is open to all individuals who find value in belonging. Rights & Usage This item is part of a JSTOR Collection. Environmental, complexity is referred to the heterogeneity and range of activities which are relevant to an organization’s operations. Thus, more diverse the relevant environmental activities and more these are, the higher is the complexity. The heterogeneity relates to the variety of activities in the environment affecting the organization. Complexity or non-complexity of environment is a matter of perception. Starbuck states that ‘the same environment one organization perceives as unpredictable, complex, and evanescent, another organization might see as static and easily understood’ Organizations dealing with non-complex environment have one advantage in the sense that there are fewer critically important information categories necessary for decision-making. When the environmental sectors are same and limited, the organizations are not required to process complex information for their actions. Moreover, the volume of information processed is low though there might be large sector of environment. As against this, organizations working in complex environment have to process a large variety of information. Environmental Variability: The degree of environmental variability is an important determinant of organizational functioning. In fact, the environment, being dynamic, changes over the period of time, but it is the rate of change which is a matter of concern. There can be low or high change rate, though again it is matter of perception. Both low and high change rates can be dichotomized further into stable and unstable rates. Stable rates occur in a situation where most of the important factors influencing a situation are changing predictably in value and where set of critical factors remains constant. Unstable rates take place when a situation is loose and erratic. Here, both the value of important variables independent and intervening and the kinds of relevant variables in the set are changing unpredictably. Child refers to environmental variability as “the degree of change that may be seen as a function of three variables: (i) the frequency of change in relevant activities; (ii) the degree of difference involved at each, and (iii) the degree of irregularity in the overall patters of change. There are four types of environmental movement: low- stable change, high-stable change, low-unstable change, and high-unstable change-all having different effects on an organization. The degree of variability in the environment affects the organisational functioning by affecting the task performance. More is the variability in the environment; more will be the uncertainty in the task performance. Galbraith, observes that ‘greater the task uncertainty, the greater the amount of information that must be processed among decision-makers during task execution in order to achieve a given level of performance’. He has defined uncertainty as ‘the difference between the amount of information required to perform the task and the amount of information already possessed by the organisation’. The basic effect of uncertainty is to limit the ability of the organisation to preplan or to make decisions about activities in advance of their execution. Taking both dimensions of the nature of environment- complexity and variability, environment may be seen in terms of a continuum ranging from turbulent to simple with varying degree of complexity and variability as shown in the figure. Figure: Continuum of environmental complexity and variability A turbulent environment has following characteristics:
The above characteristics of environment may be because of high rate of change which may not be predictable, e.g. sudden change in Government policies, technological breakthroughs, threats for, or actual, war, change in prices of any product at international level (like the substantial increase in crude oil prices by OPEC in 1973), etc. A simple environment has the following characteristics:
Is the degree of change and complexity in an organizations environment?The correct answer is C) environmental uncertainty. Reason: The external environment of a company keeps changing over time. This circumstance is highly complex and variable too. The magnitude of complicacy and change inside an organization's external environment is known as environmental uncertainty.
What is the complexity of the environment?Complexity refers to the number of elements in the organization's environment and their connections. In a highly complex environment there are many variables that can affect the company. The variables are hard to identify and measure and are connected in ways that are hard to understand.
What is environmental complexity in business?Environmental complexity is the number of important components in the organizational environment (Duncan, 1972). According to Gibbs (1994), environmental complexity is defined by the number and diversity of environmental components that the organization interacts with.
What is environmental uncertainty and complexity?Environmental uncertainty complexity essentially is a reflection of the environment in which a project is undertaken, and it is hard to imagine many facets of a project that can bring more uncertainty than having the team distributed across multiple locations.
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