Action and Contingency Postulates in Organization-Environment Relations

Abstract

Two models of organization-environment relations are examined. One postulates organizational structure or behavior as contingent on environments; organizations are viewed as adapting to environmental changes. Conversely, the second model postulates environments as dependent upon organizations; organizations are viewed as actively manipulating environments. The two alternative models are empirically assessed and compared on a heterogeneous sample of 27 business corporations. In the contingency model, environmental manipulation is used to predict different dimensions of organizational technology. In the action model, the causal order is reversed; technology is used to predict environmental manipulation. Organizational assets are controlled in both models to eliminate the possible bias of differential resources. We find similar predictive power for both models. Explained variance was about equal, and standardized regression coefficients were similar across the models as well. It is thus concluded that a full understanding of organization-environment interaction will require simultaneous consideration of their effects upon one another.