Environmental Uncertainty in organizations
Environmental uncertainty can be a serious threat to the achievement of the set goals for an organization. The type of the organization is never an issue when it comes to environmental uncertainty given that any type of organization can and is always faced with an uncertain period in its lifetime. What differentiates between the organizations is the ability to adjust and adapt to the new circumstances as provided by the newly evolved operational timeline.
This is where organic organizations or firms or companies are better placed, since through their nature, they are able to quickly get into the new system of conditions and ...
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...move on. Mechanistic organizations always find it hard to operate in these changed circumstances and survival chances are always reduced (Tosi, 2002). Different reactions are given by these two types of organization when faced with environmental uncertainty. Also, the modifications or adjustments or steps taken in a bid to adapt to the new operational climate are different.
All the same, these reactions and the steps taken for adaptation into the new business surroundings are very important as they are always geared towards ensuring that the firm, organization, company or institution survives and meets expectations besides achieving its objectives. This paper discusses the complex issue of environmental uncertainty, the way both organic and mechanistic organizations react to environmental uncertainty as well as the way in which these two types of firms can be able to adapt to these uncertain conditions.
At the end of the paper, there is a summary of the whole work that captures the concept of adaptation to environmental uncertainties by the two concerned types of organizations which include the organic and mechanistic type.
2. 0 Introduction Environmental uncertainty can be defined as the vacillating, wavering, un-determinability or unpredictability of the circumstances under which a company or firm or organization operates. This unsure nature of the operational climate always leads to problems for the organization and it is the reaction of the firm towards these unstable conditions that determines the ultimate success of the organization.
Poor reactions will always lead to poor adaptation and this definitely compromises the strength of the organization. Appropriate reactions on the other hand result in perfect or smooth adaptation and the strength of the organization gets enhanced. Different organizations react differently to environmental uncertainty and thus get affected in different ways during this moment of environmental uncertainty. 2. 1 Background information Since time immemorial, man has always been faced with unascertainable conditions for which he has had to struggle to respond to due to their abnormal nature.
The evolution of business entities has resulted into two main types of organizations. These are organic organizations which are defined as organizations with the ability to adjust to new or changed circumstances due to their flexible nature and mechanistic organizations which are defined as the organizations which are not easily adaptable to changed or unstable conditions since they are more or less the same as bureaucracies with rigid operational models that follow routine settings.
Burns and Stalker in their book entitled Theory on mechanistic and organic organizations, clearly points out that, organic organizations are non- rigid whereas mechanistic organizations are rigid and fixed in their operation mode (Burns and Stalker, 1962). 3. 0 Literature Review The Journal of Business Research provides us with amazing information on how environmental uncertainty influences small businesses.
Managers and other business leaders tend to engage in less planning when faced with uncertain circumstances or conditions in the business world. Dean A. Shepherd and Mark Shanley in their book entitled
New Venture Strategy: Timing, Environmental Uncertainty and Performance (Entrepreneurship and the Management of Growing Enterprises), presents us with a set of ideas on how to survey the market and determine whether it is ripe for our new product and whether it is indeed certain enough to accommodate our venture.
Ramirez and Waldman of Arizona State University in their paper entitled: Does Leadership matter? Leadership qualities and profitability under situations of perceived environmental uncertainty, point out the issue that leadership is vital a factor in times of environmental uncertainty but then again they state clearly that environmental uncertainty is significant in its impact on businesses and the way the organization responds determines its success through the uncertain environmental period (Raynor, 2007).
This is where they say that leadership is vital in times of environmental uncertainty. The Journal of Economics also examines the aspect of business uncertainty form the angle of finance and accounting. Avinash and Robert in Investment under Uncertainty recognize the fact that businesses face uncertainties and therefore need to be prepared (Avinash and Robert, 1994)