Organizational Environments

Conceptual Overview

The distinction between organizations and their environment made it possible for organization scientists to consider organizations as discrete entities. Yet the two are not easy to separate. If a clear boundary is drawn between organizations and their environment, new questions about the permeability of these boundaries arise. Organization members simultaneously perform activities in and outside organizations. Therefore, Pfeffer and Salancik defined the control of organizations over activities of employees as the boundary of an organization. Outside these boundaries, the influence of organizational environment on the activities of employees is more dominant than is internal organizational control. Starbuck defined two boundaries, according to one's distance from the organization's center. The first boundary includes both organization members and people who are conventionally regarded as member of other organizations but are involved in the organization's activities. The second boundary implies that no one outside is involved in the organization's activities.

Organizations and environments are interrelated as organizations are dependent on their environment and the environment creates uncertainties for organizations. This interdependence receives primary attention in the open systems perspective. Any boundary between organization and environment is partially arbitrary; organizations are perceived as open systems with permeable boundaries. Scott saw organizations as open systems in which an organization is a coalition of shifting interest groups that develop goals by negotiation. The structure of the coalition, its activities, and its outcomes are strongly influenced by environmental factors.

To solve the problem of permeable boundaries, organization anthropologist Chanlat developed a framework to study organizations and their environments by focusing on human behavior while at the same time exploring all the relationships within the environment that run through organization life at different levels. Chanlat used a holistic analysis of organizational environments to understand individuals' behavior in organizations. He distinguished five closely linked levels of organizational reality. The first level is the individual level, in which Chanlat saw human reality as a subtle interaction of the biological, the psychic, and the social. At this level, individuals construct and deconstruct their own reality and cope with conflicts, tensions, uncertainties, and ambiguities. At the second level, the interactional level, the identity of the individual is formed in interaction with others. The interactions, both formal and informal, can appear between two different individuals or two different groups. The third level, the organization level, focuses on the organizational cultures. The fourth level, the society level, concerns national cultures. These national cultures have evolved due to geography, history, political and economic forces, language, and religion. The fifth level, the world level, deals with transnational ideologies such as religion, globalization, and liberalization. Each level is analytically independent and contains elements that are linked to each other in relatively stable relations. There is no hierarchy among the different levels; the levels are contingent in nature, and the relationships can move in any direction.

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