Strategic Management: Formulation and Implementation

Environmental Forces

The first set of forces in emergent change outside of strategic intention or official organizational goals derives from how an organization relates to its environment.

Whether an organization and its members desire it or not, change is necessary to remain viable and competitive given the dynamism of the environments. Understanding this change dynamic requires a longer historical view of the fate of organizations over time.

Three theories should be kept in mind while exploring the possibilities for how environmental forces push organizations to change: the natural selection model of evolutionary theory, resource dependency perspective, institutional theory.

The natural selection model of evolutionary theory, by analogy to biological processes, emphasizes the external determination of the fate of organizations. This idea builds on Darwin's theory of natural selection, which holds that only those species that can adjust to environmental change survive; they are "selected" for survival by the environment.

In this view, change for a particular organization occurs through an evolutionary process involving random mutation, environmental selection of those forms fit to survive, and retention or reinforcement of selected pattern. In natural selection theories luck or chance plays a more important role than strategic choice.

One macroevolutionary view, know in sociological lingo as "population ecology," sees organizations as buffeted about by forces in the environment, lucky if they manage to get into a favorable position, fated to die if they do not (Hannan, 1977; Hannan and Freeman, 1989). Population ecology draws analogies to the biological evolution of species in exploring how populations of organizations are transformed by environmental changes (Aldrich and Pfeffer, 1976; Hanna and Freeman, 1989).

Population ecologists have attempted do describe the characteristics of organizations that make it easier or harder to adopt to changing environments (Hannna and Freeman, 1984). However, this model does no account for change in environments themselves, because "environment" is used in such a nonspecific way, embodying everything from industry to geographic territory. Moreover, this theory neglects the role of interorganizational ties, which are consider vital in understanding organizational change.

The resource dependence model emphasizes the dependence of organizations on their environments for resources. However, unlike the population ecology model, this model affirms that organizations strive to acquire control over resources that will minimize their dependency on environments.

To the extent that other organization control their critical resources, they have power other organizations. The more critical the resources in the environment furnished to the organization, the more the organization wishes to control these resources. This typically requires one organization to engage in strategic activities with other organizations, especially those that supply them with resources or compete for these resources, such as when a plant tries to buy or form an arrangement with a fuel supplier.

Institutional models look at social and political forces surrounding organizations, maintaining that organizations must fits social expectations and values. If they do, they are more likely to survive that if the not do not, regardless of efficiency. This model holds that organizations strive to maintain legitimacy by conforming to institutionalized beliefs about how they ought to be constructed.

Therefore, organizations need legitimacy to show that the organization is behaving "appropriately" and seek to emulate role models perceived to be successful, aided by experts and educators that promulgate popular models. Over time, the organizations that survive tend to look alike not because that is the form best adapted to the economic environment, but because of the transmission and acceptance of values.