Organizational Adaptation

Conceptual Overview

The outer context in which an organization operates (its task environment) is important when discussing organizational adaptation. It serves as a broad source of critical contingencies that can impose reasons for differences and commonalities across organizations. There is a debate in the literature over whether organizational adaptation is environmentally or managerially derived. For example, on one side of this debate, natural selection theorists, who adopt an environmentally derived point of view, believe that external constraints are so strong that organizations retain very little discretion over their own actions. They believe that such things as political processes, number and size of firms within an industry, market share, technological processes, and information processing requirements determine organizational characteristics and outcomes. This makes managerial discretion very limited and unimportant.

Limitations of this environmental determinism perspective revolve around the traditional contingency perspective and its emphasis on eliminating the need for management. Specifically, the strategy of an organization cannot follow automatically from an environmental situation; otherwise, few, if any, distinguishing features between competitors would exist within an industry. Industry structural characteristics and the importance placed on various activities and performance can vary. On the other hand, firms within an industry can collaborate to make their environments more manageable. The individual organization borrows and adapts ideas that have survival potential. This is the enacted environment, which can vary according to managers' perceptions of organizations' distinctive competencies and environmental uncertainty.

On the other side of this debate, theorists who adopt an organizational or managerial point of view believe that large and powerful firms are subject to very little constraint, resulting in almost unlimited discretion. Although there are always some external constraints (e.g., governmental, economic, industrial) and internal constraints (e.g., human needs, power structures, information systems, technological processes), the dominant management coalition retains a certain amount of discretion over (1) the industry in which to operate and (2) the goals that allow the organization enough slack to engage in satisficing behavior. Once performance exceeds this satisficing level, management's values and preferences prevail over determinalistically derived theories of management.

Equifinality is also seen as possible, in terms of achieving a particular outcome when starting from a specific set of initial conditions. Although constraints are considered to exist, decision makers retain much discretion over other strategic activities, such as environmental analysis, strategy formulation, strategy implementation, and strategy evaluation.

The debate over organizational-managerial choice versus environmental determinism can be problematic and distortive. Because of the ambiguity on both sides of the argument, an interactive, rather than absolute, view of organizational adaptation is more accepted. This neocontingency perspective of the adaptation [Page 1012]refers to the process of organizational adaptation. The open systems theory of organizations triggers thinking about independence and interactive effects that exist between a system and its environment. Those who support this interactive view argue that choice is both a cause and a consequence of environmental influences because cause and consequence interact and conflict, which results in noticeable organizational adaptations. For example, individuals and their organizations can choose in decision-making circumstances, enacting their own environments. Yet structural characteristics of industries may exist that are not easily controlled by individuals and their organizations.

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