Organizational Adaptation: Strategic Choice and Environmental Determinism
Author(s): Lawrence G. Hrebiniak and William F. Joyce
Source: Administrative Science Quarterly, Vol. 30, No. 3 (Sep., 1985), pp. 336-349
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OrganizationalAdaptation: StrategicChoice
and Environmental
Determinism
Lawrence G. Hrebiniak
and
William F. Joyce
The prevailing assumption in recent literature is that
strategic choice and environmental determinism represent
mutually exclusive, competing explanations of organizational adaptation. The present paper, in contrast, argues
that choice and determinism are independent variables
that can be positioned on two separate continua to develop
a typology of organizational adaptation. The interactions of
these variables result in four main types: (1) natural selection, with minimum choice and adaptation or selection out,
(2) differentiation, with high choice and high environmental determinism and adaptation within constraints, (3)
strategic choice, with maximum choice and adaptation by
design, and (4) undifferentiated choice, with incremental
choice and adaptation by chance. These types influence
the number and forms of strategic options of organizations, the decisional emphasis on means or ends, political
behavior and conflict, and the search activities of the organization in its environment.
One of the most pervasiveand centralargumentsin recent
treatments of organizationaladaptationconcerns whether it is
manageriallyor environmentallyderived(Astleyand Vande
Ven, 1983). At issue is a view of adaptationas a process
reflectingchoice and selection versus one inwhich it is a
necessary reactionto peremptoryenvironmentalforces (Child,
1972; Aldrich,1979). Inanalogousterms, the issue is one of
the prepotencyof voluntarismor externaldeterminisminthe
strategicchange process (Hannanand Freeman,1977). The
present paperargues that classifyingchange as eitherorganizationallyor environmentallydeterminedis misleadingand
divertsresearchinquiryaway fromthe criticalinteractive
natureof organization-environment
relationshipsinthe
adaptationprocess.
? 1985 by Cornell University.
0001-8392/85/3003-0336/$1 .00.
CHOICEVERSUSDETERMINISM
Astley andVande Ven's (1983) recent exhaustive review
suggests a majordifference in currenttheory between a
deterministicand a voluntaristicorientationintheories of organizationaladaptation.One of the dimensions in theirtypology
is a continuumrangingfromdeterminismto voluntarism,
which is dividedto place majorschools of organizationalanalysis intotwo mutuallyexclusive categories. Whiletheirplacement of schools of analysis in one categoryor the other is
intendedsolely to classify them, it clearlyimpliesthe either-or
natureof the debate on the prepotencyof voluntarismor
determinism.Majorapproachesto the issue of strategic
change or adaptationemphasize mutuallyexclusive and different ends of what is reallya single continuum.
A relatedimplicationin the existing literatureis the assumption
that a binarydistinctionbetween choice and determinism
capturesthe realityof organizationalbehaviorand change. As
popularand intuitivelypleasingas these categories may be, a
relianceon one or the other directs attentionaway fromthe
fact that both are essential to an accuratedescriptionof
organizationaladaptation.The importantconceptualand practical issues are the interactionor interdependenceof events
336/AdministrativeScience Quarterly,30 (1985): 336-349
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1
inthe currentliteraTheterm "adaptation"
tureis employedina numberof ways,
rangingsimplyfrom"change,"including
bothproactiveandreactivebehavior(Miles
andSnow, 1978),to a morespecificdenotationof "reaction"to environmental
forces ordemands(AstleyandVande Ven,
1983).Theusage inthis paperis more
consistentwiththe formermeaning,indicatingchangethatobtainsas a resultof
capabilitieswith enaligningorganizational
and
contingencies(Hrebiniak
virornmental
Joyce, 1984).Thisview allowsforproacbehaviorin,
tive or reactiveorganizational
anticipationof or reactionto exogenous
variables.
with individualinterpretationsof them, and the resultantdecisions or actions. Astley andVande Ven (1983: 267), for
example, concludedthat the interestingresearchquestions
about complex organizationswould (1)admitto both deterministic and voluntaristicviews, and (2)juxtaposethose views to
study theirinteractionsand reciprocalinterdependence
over time.
The same view is expressed by Weick (1979),who arguedthat
constructionof mutuallyexclusive categories, relianceon unidirectionalcausation,and focusing on originsand terminations
of variablessuch as "choice"are problematicand distortingfor
theoristand practitioneralike.What is criticalis an abilityto
"thinkin circles"(Weick,1979: 52), to investigatethe process
of interactionor mutualcausation,as a reciprocalrelationship
between two sets of variablesunfolds.The importantresearch
issue of voluntarismversus determinismis the relationship
between them and how theirinteractionsand resultanttensions culminatein changes over time. The issue is how choice
is both a cause and a consequence of environmentalinfluences, as cause and consequence interactand conflictto
resultin noticeableorganizationaladaptations.
A similarview is expressed in studies on power (e.g., Dahl,
1963; Jacobs, 1974; Pfefferand Salancik,1978; Pfeffer,
1981), inwhich the underlyingdependencies or relativevulnerabilitiesof organizationand environmentinteractto create
tensions and produceboth organizationaland environmental
change. The implicitpower model is one of influenceand
countervailingpower, and the relativepower of organization
and environment,i.e., externalstakeholders,over time is the
key to explainingthe prepotencyof choice or determinismin
the adaptationprocess. Ifhighorganizationalpower suggests
greaterchoice, while higherpower of stakeholdersresults in
greaterenvironmentaldeterminism,the occasion of a powerful organizationconfrontingequallypowerfulstakeholdersindicates that highchoice and highdeterminismmay coexist.
The purposeof this paperis to develop this interactiveview of
the adaptationprocess in organizations.1Followingthe advice
and lead of Astley andVande Ven (1983),Weick (1979), and
others (Jacobs, 1974), it is arguedthat: (1)choice and determinismare not at opposite ends of a single continuumof
effect but in realityrepresenttwo independentvariables,and
(2)the interactionor interdependenceof the two must be
studied to explainorganizationalbehavior.The paperdevelops
a typologyof strategicdecision makingthatfacilitatesthe
study of the interactionsbetween voluntarismand determinism. Italso allows for a needed integrationof the diverse and
disparateliteraturesin organizationtheory, management, and
economics, which currentlyfocus on the prepotencyeitherof
choice or environmentaldeterminismin the adaptation
process.
OFADAPTATION
TYPOLOGY
The present argumentis that organizationalchoice and environmentaldeterminismcan be positionedas independent
variablesinthe adaptationprocess. Individualsand their institutions can choose in decision-makingcircumstances;they can
construct,eliminate,or redefinethe objectivefeatures of an
337/ASQASeptember 1985
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Organizational Adaptation
environment,thereby purposivelycreatingtheirown measures
of realityand delimitingtheirown decisions (Child,1972;
Weick, 1979). On the other hand,discerniblefeatures of the
actualenvironmentare also important;structuralcharacteristics of industriesor domainsand variousniches clearlyexist,
some of which are intractableto controlby individualsand their
organizations.At times the effects of these are peremptory
(Hannanand Freeman,1977; Aldrich,1979; Porter,1980); at
other times they must at least be considered in the strategic
decisions of organizations.Usingtwo separate, independent
factors emphasizes that choice and determinismmust interact
or coalesce to define a causal fabricor context either nurturant
of any given organizationalvariationor hostile to it (Emeryand
Trist,1965).
Thisapproachfollows logicallyfromthe open-systems theory
of organizations(Miller,1965; von Bertalanffy,1968). An open
system tends towarda state of dynamicequilibriumwith its
environmentthroughthe continuousexchange of materials,
data,and energy. Boththe system and its environmentcan
affect this process of exchange and transformation,suggesting theirindependenceand the importanceof theirinteractive
effects. More importantly,open systems are characterizedby
equifinality,that is, the same outcomes can be achieved in
multipleways, with differentresources, diverse transformation processes, and variousmethods or means. Even if it is
assumed that the environmentof an open system is highly
deterministic,controllingfullyand preciselythe ends or outcomes that are tolerated,organizationalchoice is stillpossible,
due to the controlover and selection of the means by which
the prescribedoutcomes may be achieved. Even inthe most
constrainingand debilitatingcase of environmentaldeterminism, equifinalityindicatesthat organizationalchoice nonetheless exists as a separate, independentvariableimportantto the
development of a dynamicequilibriumwith the externalenvironment.Choice,then, can be separatedfrom environmental
determinismin a logicalway, as a necessary definingcharacteristicof the organizationas an open system.
The purposeof the followingdiscussion is to examine the two
variablesin interaction.Choiceand determinismcan be represented on axes rangingfrom low to highas shown in Figure1.
Eachaxis denotes varianceon levels of assertiveness and
potentialto influenceothers (DaftandWeick, 1984). The
quadrantshelp to define the domainand scope of power in the
relationshipbetween organizationand environment(Dahl,
1963) and the relativevulnerabilityof each in an interactive
setting (Jacobs, 1974; Pfeffer, 1981).
QuadrantI basicallyshows the conditionsor assumptions
underlyingthe populationecology, naturalselection approach
to adaptation- low strategic choice and high environmental
determinism(Hannanand Freeman,1977; Aldrich,1979), in
which it is arguedthat organizationsenjoyvirtuallyno control
over exogenous factors.Adaptationis determinedfromwithout, as the environmentselects organizationsand allows only
those forms with appropriatevariationsto remain.As Figure1
indicates,proponentsof this view argue that, underthese
conditions,organizationsadaptor are selected out.
338/ASQ, September 1985
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Figure 1. Relation of strategic choices and environmental determinism in organizational adaptation.
High
A\
\
Strategic Choice
Maximum choice
Adaptation by design
11Differentiationor Focus
Differentiatedchoice
Adaptation within constraints
LU~~~~~~~~~~4
U
0
IV UndifferentiatedChoice
Incrementalchoice
Adaptation by chance
(n
\I
NaturalSelection
Minimum choice
Adaptation or selection out
I~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Low
Low
DETERMINISM
ENVIRONMENTAL
High
Examples of Quadrant I situations include organizations working under conditions labeled as perfectly competitive. Viewed
in the long
runc
individualfirms exercise little discretion because market or competitive forces determine the "fair"yreturn
that an organization can achieve. Prices are dictated by a
market in which demand is perfectly elastic. Differentiating
to command premium prices and excess profits is
products
vagrie
wihintheenvronen
(Jcobt
174;Pfefe"an
difficult, if not impossible. Firms that do not keep abreast of
339/AS~t
September 1985
and market changes find costs rising above a
technological
horizontal demand curve, clearly threatening survival. Quadrant
I would include mnanysmall organizations, those selling
commodity-type products, and simple systems (Herbst, 1957;
Aldrich, 1979), as well as large organizations with undifferentiated products or services, conf ronted with low entry and exit
barriers and with no way of achieving a lasting competitive
advantage (Bain, 1957; Porter, 1980).
Quadrant I can also include organizations in imperfectly competitive niches. The niche is important because it defines a
population of organizations that face similar, if not identical,
political and economic constraints. The oligopoly that is tied to
a given niche and finds adaptation to other niches impossible
because of entry barriersand resource constraints is highly
dependent on the distribution of resources and political
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OrganizationalAdaptation
Salancik,1978; Porter,1980). Strategicchoice and deviant
organizationalbehaviorare difficultbecause of this dependency, resultingin highenvironmentalcontrolover the
organization.
Managerialaction is obviouslylimitedand constrainedin organizationsfallingin Quadrant1,but individualsmay stilltryto
exercise options that mitigateagainst peremptoryenvironmental demands. Purposefulorganizationalactions, includingtechnologicaldiscoveries and other innovations,can substantially
alterthe abilityto compete underQuadrantIconditionsand
affect competitiveadvantage.Itis also possible that an organizationunderQuadrantIconditionswill exercise strategic
choice and attemptto change its domain,task environment,or
industry.Such an attempt, of course, depends on these factors
and on whether or not there are exit barriersinthe organization's currentdomain,the heightof entrybarriersin the new
environment,the transferability
of resources to new ventures,
and the political-economiccontext withinwhich such a
strategicchoice is made (Dahl,1963; Thompson, 1967; Porter,
1980; Pfeffer, 1981).
At the opposite extreme in Figure1 are organizationsexisting
underthe more munificentand benignconditionsof Quadrant
Ill,markedby high organizationalchoice and low environmental determinism.Strategicchoice determines organizational
domainor task environment,so that autonomyand controlare
the ruleratherthanthe exception. InQuadrant111,
resource
dependencies are not very problematic(Lawrence,1981), and,
when power is viewed as the obverse of dependency, organizationsenjoyan influenceover others intheirtask environment (Emerson,.1962; Pfeffer, 1981). The organizationsin
QuadrantIllconfronta pluralisticenvironmentinwhich movement withinand between niches or marketsegments is not
severely constrainedby exit or entrance barriers.Because of
the lackof problematicdependencies on scarce resources and
few politicalconstraints,the organizationcan purposelyenact,
define, and otherwise affect its domainandthe exogenous
conditionsunderwhich it desires to compete (Levineand
White, 1961; Rumelt,1979; Weick, 1979; Snow and Hrebiniak,1980). Underconditionsin QuadrantIll,adaptationis by
innovationsand proactivebehaviorare
design. Organizational
easier, due to the benignenvironment(Lawrence,1981), and
"prospectors"(Milesand Snow, 1978) are more likelyto
emerge, due to the conditionsfavoringdeterminismand
choice.
Most of the literatureon adaptationhas focused on Quadrants
I(NaturalSelection)and Ill(StrategicChoice).Yet there are two
additionalbut relativelyneglected sets of conditionsthat can
expandour understandingof decision makingand the organizationaladaptationprocess.
InQuadrant11,both strategicchoice and environmentaldeterminismare high,defininga turbulentcontext for adaptation
(Emeryand Trist,1965). Underthese conditions,there are
certainclearexogenous factorsthat affect decision making,
but the organizationnonetheless enjoys choice despite the
peremptorynatureof externalforces and constraints.Typical
cases here would includeorganizationsin an environmental
niche in which certainrules,constraints,or immutableenviron340/ASQ, September 1985
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mentalconditionsseverely constraincertainoutcomes or behaviorsbut allow leeway and choice in others; and organizations includedin multipleniches or domains, each with its own
constraints,opportunities,and populationof competing
organizations.
Perhapsthe clearest examples of organizationsin Quadrant11
are largefirmsin highlyregulatedindustries,which are typicallyclosely regulatedin such diverse areas as productcharacteristics, representationsof performance,capitalrequirements, and legalconstraintson the means of conducting
business. Yet individualchoice of strategy is paradoxicallyhigh,
due to factors such as size, marketstructure(e.g., highconcentration),multiplemeans or methods of achievingdesired
outcomes, and low resourcedependency on externalsources.
Such organizationsare able to follow differentiationor focus
strategies (Porter,1980), choose marketniches or segments
withinthe constraintslaiddown by the environment,or pursue
effective generic strategies, despite externalforces (Berleand
Means, 1932; Miles and Snow, 1978; Porter,1980; Snowand
Hrebiniak,1980). Forexample, Miles and Cameron(1982)
discussed how largecompanies in one industry,despite government regulation,controls,and mandatorywarningsto consumers aboutthe detrimentaleffects of theirproducts,positioned themselves so as to follow differentiationand focus
strategies and affect theirmarketsthroughextensive advertising, marketing,and lobbying.
Quadrant11also includesorganizationsincludedin multiple
niches, with each characterizedby a differentset of constraints,opportunities,and competing organizations.A multiproductor multidivisional
organizationwith productsor
businesses havinglittlemarketand technologicalrelatedness
withinor across industries(Rumelt,1974; Hrebiniakand
Joyce, 1984), as well as varyinglevels or types of concentration, competition,demand characteristics,and priceelasticities, would very likelyconfrontthe conditionsof QuadrantII.
Despite the clearimpactand peremptorynatureof environmentalfactors in some niches, the organizationstillenjoys
autonomyand a favorablepositionin others. Similarly,a multiunitorganizationin differentenvironmentalniches or markets,
but with fairlyhighinterdependenceacross the units due to
common technologies or verticalintegrationrequirements,
would reflectthis conditionof varyingconstraints,opportunities, and competition.The coordinated,centralizedstrategies
and simultaneousdecentralizationof business units in heterogeneous settings that characterizeglobalcompetition(Porter,
1980) are indicativeof this type of strategicsetting.
The last examples emphasize an importantpointabout problems of level of analysis,even inthe analysisof intraorganizationaldecisions. A quasi-autonomousunitin a largerorganization can confronta totallydifferentset of exogenous market
factors thananotherunitin the same organization,although
the largerorganizationis certainlyan "exogenous" factorin the
environmentalsurveillanceand strategicdecisions of the two
units.Thisdependence of the subsystem on the supersystem
of which it is an integralif semiautonomous parthighlightstwo
levels of analysis:one indicatesthat the supersystem can set
some limitson the behaviorof the subsystem; the other
emphasizes the freedom of choice and varyingexogenous
341/ASQ, September 1985
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Organizational Adaptation
conditionsof subsystems vis-6-viseach other and the larger
system (Katzand Kahn,1966; Williamson,1975; Hoferand
Schendel, 1978). The partsor subsystems of the whole organizationmay be placed indifferentquadrantsin Figure1, with
the net effect that strategicchoice and environmentalfactors
determinethe placement of the whole organizationor system
of which the subsystem is part.Bothwhole organizationsand
independentsubunits may be used in the analysis;at both
levels, choice and determinismare centralto the definitionof
strategiccontext and the factors relatedto adaptation.
The essential pointis that externalconstraintsand highenvironmentaldeterminismneed not necessarily preventindividualchoice and impacton strategicadaptation.Although
adaptationand choice occurwithinconstraints(Figure1),
organizationsin QuadrantIInonetheless can develop various
strategicoptions.
QuadrantIVin Figure1 is a relatively"placid"situation(Emery
and Trist,1965) characterizedby low strategicchoice and low
environmentaldeterminism;organizationsincludedhere tend
to lackstrategicchoice, despite a paucityof externalconstraints.Changecan be labeledadaptationby chance, since
organizationsapparentlyexhibitno coherent strategyto take
advantageof fortuitousenvironmentalconditions.
Because QuadrantIVorganizationsand elements of theirtask
environmentboth appearreluctant,unwilling,or unableto
create dependencies and exercise influence,a researchfocus
on organizationsinthis context clearlycan resultin such
recentlydiscussed phenomenaas "muddlingthrough"and
"garbagecan" descriptionsof organizationalbehavior(Lindblom, 1965; Marchand Olsen, 1976; Weick, 1979). When
organizationshave no apparentstrategicthrust,it is possible to
dismiss rationalityas a guidingprincipleof organizationalbehaviorand to replaceit with arationalityand even capriciousness to explainactionover time. Buta more likelyand logical
explanationof QuadrantIVorganizationsmay simplybe that
they have an arrayof internalstrengths and competences that
to externalopportunitiesand conditions.Ifthe
are inappropriate
process of strategyformulationis based in parton the alignment of internalcapabilitieswith exogenous contingencies
(Chandler,1962; Rumelt,1974; March,1981; Hrebiniakand
Joyce, 1984), it is reasonableto arguethat an inappropriatemix
or insufficientnumberof internalcapabilitieswill preventorganizationsfromacting,despite the benignity,munificence,or
lackof threatof the environment.Inthis view, the task of the
organizationis to develop the capabilitiesor distinctivecompetences needed to take advantageof environmentalconditions
and therebyalterand escape fromthe conditionsof Quadrant
IV(Quinn,1980). Because the prevailingconditionsof QuadrantIVultimatelycan resultin the creationof dependencies or
alterationsfavoringthe relativeinfluenceof eitherorganization
or environment,adaptationby chance is stillan apt description
of what appearsto be a relativelyunstablecontext for decision
making,action,and the exercise of power.
Two studies (Milesand Snow, 1978; Snow and Hrebiniak,
1980) providesome insightinto QuadrantIV.Both studies
discuss the existence of "reactors,"firmsdevelopingfew
innovationsor engaging in littleor no proactivebehaviorand in
342/ASQ, September 1985
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which internalcapabilitiesor distinctivecompetences are not
developed to take advantageof a benignenvironment.But
organizationsfacingfew environmentalconstraintsor peremptoryexternalcontingencies must act to develop and benefit
froma competitiveadvantageor distinctivecompetence, for a
lackof purposiveaction leads to poorerperformancerelativeto
others exhibitingmore aggressive behavior(Porter,1980;
Snow and Hrebiniak,1980). Such inactionalso heightens the
possibilitythat competitorsand other task environmentelements will create a sufficientnumberof new problematic
dependencies to move the organizationto QuadrantI in Figure
1 (Porter,1980). Inessence, QuadrantIVis unstable,forcing
the organizationto seek movement to anotherdomain.
The present analysissuggests that the adaptationprocess is
dynamic;over time, an organization'spositionmay shift as a
resultof strategicchoices or changes in the externalenvironment. To use Weber's (1947, 1967) term, a "struggle"between organizationand environmentunfoldsas different
actors emerge, controlover scarce resources fluctuates, and
power bases shift in time. Hisdiscussion also suggests that
the outcome of this struggle depends in parton the effectiveness of organizationaldecision making.The present analysis
indicatesthat: (1) controlover scarce resources is centralto
the relationshipbetween choice and determinism,and (2)
strategicchoice is possible in allquadrantsof Figure1,
althoughthe qualitativenatureand impactof the decision
process certainlyvarieswith the organization-environment
context.
The underlyingimplicationsof the typologyabout power and
its effects on the types of decisions or choices are shown in
Figure1. InQuadrantIof Figure1, choices are possible but
limitedbecause of the organization'slackof resources and
power vis-a-visthe environment;in QuadrantII,choice is high
but selective or "differentiated"because of the highcountervailingpower and resources of the environment;in Quadrant
the organization'sresourcedependencies are the lowest
111,
and the numberof strategicoptions the highest; underconditions of QuadrantIV,organizationalchoices are incremental,
due to a lackof the resources necessary to allow takingfull
advantageof a benignenvironment.
RESEARCHIMPLICATIONS
OFTYPOLOGY
Table 1 presents some of the researchimplicationsof the
typologyand suggests the issues or problemsassociated with
organizationaladaptationas controlover scarce resources and
power bases fluctuates between organizationaland environmentaldominance.
Types of organizational choice. As suggested above, types
of organizationalchoice varyacross the differentquadrantsof
the typology.Minimumchoice is found in Quadrant1.While
severely constrained,organizationsinthis Quadrantare not
"inactive"in a "naturalevolution"over time (Astleyand Vande
Ven, 1983: 247), norare they completelyat the mercyof
externalinfluences,as naturalselection approacheswould
suggest (Hannanand Freeman,1977; Aldrich,1979). Maximumchoice is found in QuadrantIll,consistent with the
strategic choice literature(Levineand White, 1961; Child,
343/ASQ, September 1985
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OrganizationalAdaptation
Table1
Effect of FourOrganizationalTypes in Choice-DeterminismTypology on OrganizationalVariables
Variable
Choice
Numberof
strategicchoices
Decisionemphasis
QuadrantIII
QuadrantIV
High determinism High determinism
Low choice
Highchoice
Low determinism
Highchoice
Low determinism
Low choice
Minimum
Differentiated
Maximum
Incremental
Few
Means
Medium-high
Primary- means
High
Primary- ends
Few
Means-ends
QuadrantI
Quadrant11
Secondary
Genericstrategies
-
ends
Secondary
-
means
Defender,
(efficiencyconcerns)
Differentiation
(effectiveness concerns)
Differentiation
Reactor
cost leader
Focus
Focus
Autonomy,innovation Low
(external
constraints)
Low-medium
Politicalbehavior,
conflict
SolutionSearch
driven
-
analyzer
-
prospector
Medium
High
Low
(internalconstraints)
High
(interorganizational)
Solution-driven;
some slacksearch
High
(interorganizational)
Slacksearch
Low
Problematic
1972; Weick, 1979). The introduction of differentiated (Quadrant 11)and incremental (Quadrant IV)choice, however, presents additional implications for research, as shown in Table 1.
Number and type of strategic options. From the arguments
about choice, it follows that the number and type of strategic
options would vary across the typology. There are few viable
strategic options in Quadrants I and IV,but for different
reasons; external constraints delimit choice in Quadrant 1,
whereas internal factors inhibitdecision making in Quadrant IV.
The number of options is highest in Quadrant Ill and, one could
argue, fairly high in Quadrant 11,where choice coexists with
externally generated constraints. But the types of choice
what organizations can control and affect - varies significantly
between Quadrants IIand Ill, despite the high number of
strategic options available in each case. These significant
differences, as well as others in Table 1, can be highlighted and
underscored by focusing on two critical components of decision making, i.e., means and ends (Simon, 1976; Thompson,
1967) and on the notion of equifinality in open systems (Miller,
1965; von Bertalanffy, 1968).
Emphasis on means and ends. Table 1 suggests that the
constrained choice of Quadrant I really reflects control over
means. The "simple system" (Herbst, 1957) or firm in a highly
competitive, atomistic industry confronts many givens, most
notably, constraints on or lack of control over markets, prices,
demand, and even profitability(the "fair return") (Bain, 1957;
Stonier and Hague, 1961). Whatever choice exists focuses
primarilyon means, different techniques to transform inputs or
produce outputs in more efficient ways so as to achieve some
excess profit or even a short-lived competitive advantage
(Bain, 1957). Industry structure allows for some control over
intraorganizationalprocess but not over extraorganizational
market outcomes.
InQuadrant11,environmentalcontrolis high,for example, over
what ends (products,services, industrypenetration)organiza344/ASQ, September 1985
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tions can pursue in regulatedindustries,but the organization
nonetheless enjoys highchoice over means or methods of
competition.Equifinality
suggests that regulatedor controlled
ends can be attainedin differentways, most notably,with
differentinputs,strategies, or activitiesand with variousinitial
states or conditions(Miller,1965; von Bertalanffy,1968; Miles
and Snow, 1978; Snow and Hrebiniak,1980); differentiated
choice and multiplestrategies are possible. InQuadrantIll,in
contrast,the primarystrategicemphasis is on ends ratherthan
means. Insuch a benignenvironment,organizationsare free to
develop new products,services, customers, and marketsand
to diversifyintoareas of endeavorthat are relatedor unrelated
to existingareas of emphasis. Thereis a concernwith means
or efficiency,of course, but the overridingemphasis in organizationsin QuadrantIIIis likelyto be more on considerations
of "effectiveness"; to borrowfrom Barnard(1938), Quadrant
11Iorganizationsare freerto focus on the rightthings rather
than havingto do prespecifiedthings right.The primaryorganizationaltask in QuadrantIIis to maneuveraroundexternally
the
imposed prescriptionsand proscriptions;in Quadrant111,
focus is more on goals and exercisingdiscretionto optimize
valuedorganizationaloutcomes.
Generic strategies. The researchdone on generic strategies
(Milesand Snow, 1978; Porter,1980; Snowand Hrebiniak,
1980) suggests a relationshipbetween predominantstrategy
and quadrantlocation.Cost leaders or defenders are likelyto
predominatein Quadrant1.Differentiationand focus strategies
are most likelyin QuadrantsIIand Ill,but the incidenceof
analyzersand prospectorswould varybetween those two
quadrants.Analyzersare more cautious,often relyingon careful analysisof environmentaltrends and a consequent delay in
committingthemselves to a new environmentalniche, behaviorconsistent with QuadrantIIconditions;the risk-taking,
creativity,and innovationof the prospectorare clearlymost
consistent with the munificentconditionsof Quadrant11.The
unstable reactor,characterizedby no clearagreement on outcomes, uncrystallizedor problematicrelationsbetween means
and ends (Thompson,1967), and a lackof focused strategy or
clear membershipin a strategicgroup(Porter,1980), would
appearto be most likelyto flourishunderthe conditionsof
QuadrantIV.
Political behavior and conflicts. Table 1 suggests different
implicationsfor researchon politicalbehaviorand conflicts.
The workof Marchand Simon (1958), Lawrenceand Lorsch
(1967), Sherifet al. (1961),and others suggests that severity
and type of conflictvarywith similarityof goals, perceptionsof
superordinateoutcomes, and the existence of common focus
for enmityand competitivevigor.Thiswould suggest low
conflictin QuadrantIV,characterizedby few clear intraorganizationaldifferences, and some externallydirectedconflictin
Quadrant1.One could hypothesize highconflictfor both Quadrant11and Illorganizations,but for differentreasons. Conflictin
Quadrant11would be in largepartexternallydirectedbecause
of the exogenous factors and stakeholderswhose power or
controlis a problemfor the organization.Intraorganizational
conflictwould be low because of the superordinatenatureof
the externallygenerated exigencies or dependencies (Dahl,
conflictis
1963; Jacobs, 1974). Incontrast,intraorganizational
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Organizational Adaptation
where few externalconlikelyto be higherin Quadrant111,
straintsexist and internalcompetitionfor resources and influence is the more probablecontributorto conflict.
Search processes. Inthe present typology,search processes
are not consistent with the popularbinarydistinctionbetween
strategicchoice and environmentaldeterminismin the literature, which basicallysuggests higheffective search versus
low, ineffective search at the two extremes of a single continuum.The present analysissuggests that both the amount
and qualitativenatureof search varyacross the typology
(March,1981; HrebiniakandJoyce, 1984). InQuadrant1,
search is probablynot low or impotent,as the population
ecologists or environmentaldeterministsargue. Rather,search
is more likelyto be highbut "solutiondriven,"directedtoward
the solutionof specific problems,e.g., loweringcost curves
andincreasingefficiencyto competeorsurviveunderperfectly
competitiveconditions(March,1981). Facinga host of problematicdependencies, the organizationactivelyseeks ways to
lessen the controlor influenceof environmentalforces.
InQuadrantIll,by contrast,search is also highbut is qualitativelydifferentthan in QuadrantI;externallygenerated constraintsand dependencies are fewer, if they exist, and the time
inwhich to make strategicdecisions is longerand less problematic.The adaptationand implementationhorizonsare
longer(March,1981; Hrebiniakand Joyce, 1984), allowingfor
a more relaxedapproachto search activities,what March
(1981)calls "slacksearch." Search is not drivenby the quest
for immediatesolutions that marksthe search activityin Quadrant1.Slacksearch is less tied to specific organizationalneeds
or pressures and is even apt occasionallyto resemble a process of "dabbling"or nondirectedactivity.
InQuadrant11,search would be both solution-drivenand slack
search,.The problematicnatureof the environmentdemands
that solution-drivensearch be high,as the organization
attempts to gain controlover key environmentalstakeholders
and contingencies or reduce theirimpact.Butorganizational
choice is simultaneouslyhigh,with controlover some ends but
primarilyover means or internalprocesses. Some dabblingis
possible, therefore,as the organizationengages in slack
search and experimentationin areas inwhich it enjoys control
and influence. InQuadrantIV,search is problematic,because
of the organization'sinabilityto take advantageof a benign,
placidenvironment.
Othervariablesundoubtedlycan be identifiedand variationsin
them predictedas a functionof organizationallocationin Figure
1. The purposeof this paper,however, is not to providean
exhaustive coverage of such variablesbut to stress the usefulness of the typologydeveloped in explainingthe relation
between choice and determinism.
DISCUSSION
The most obvious conclusionof this study is that the interdependence and interactionsbetween strategicchoice and
environmentaldeterminismdefine adaptation;each is insufficient and both are necessary to a satisfadtoryexplicationof
organizationaladaptation.
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A second and relatedconclusionis that adaptationis a dynamic
process that is the resultof the relativestrengthand type of
power or dependency between organizationand environment.
The forces of Figure1 are not static; actions by organizations
and environmentalelements that underliethe different
strategiccontexts are potentiallyimportantforthe creationor
alterationof dependencies or relativevulnerabilitiesthat will
affect futureactions and decisions (Jacobs, 1974; Lawrence,
1981). Changes resultfromthe interactionbetween choice
and determinism(Weber,1947, 1967), the interplayof various
politicaland economic forces (Dahl,1963), and the interplay
between means and ends over time (Thompson,1967; March,
1981). Bothstrategicchoice and environmentaldeterminism
providethrustsfor change; each is both a cause and a consequence of the other inthe adaptationprocess. To understand this dynamicchange phenomenon, it is necessary to
"thinkin circles"(Weick,1979), to investigatethe reciprocity
of relationshipsbetween organizationand environment,and to
study the mutualcausationthat obtains.
Viewingadaptationas a dynamicprocess reveals that for any
given organization,elements or variablesrelatedto strategic
choice and environmentaldeterminismexist simultaneously.
InQuadrantIof Figure1, the environmentis prepotent,but
strategicdecisions are directedtowardthe alterationof dependencies and the movement of the organization,at minimum,
towardQuadrant11.InQuadrant11,both the organizationand
environmentalelements have power; analysisof internaland
exogenous forces revealsthat each side is vulnerablein some
areas but simultaneouslyis able to create dependencies in
others. Anygiven organizationin QuadrantIIcould be expected to attempt to reduce its vulnerabilitiesthrough(1)
competitiveactions to differentiatefurtherits productsor
services, buildentrybarriersor reduce exit barriers,or reduce
problematicdependencies on suppliersor customers (Porter,
1980); or (2) politicalactions such as collusion,cooperation,or
co-optationto absorbor diffuse importantenvironmentalelements (Dahl,1963; Thompson,1967). Environmentalelements
-
competitors, regulators, consumers
-
in turn, exer-
cise theirinfluencein similarattempts to retainor increase
competitiveor politicaladvantage.The net resultof these
interactionsis that organizationsmay remainin Quadrant11,
gain additionalinfluenceover theirenvironmentand move to
QuadrantIll,or lose power and move towardthe relatively
disadvantageousconditionsof Quadrant1.Whateverthe actual
evolution,the essential pointis that adaptationis a dynamic
and environmentally
process that is both organizationally
inspired.
A finalimportantimplicationof the present analysis is that
simple models relyingon the conceptualconstructionof
mutuallyexclusive, competing explanationsof cause and
effect may not be sufficientto capturethe complexityand
richness of organizationalbehavior.The discussion of the
researchimplications(Table1) of the present typologysuggests the complexityand interdependenceof importantvariables and decision processes as a functionof both choice and
determinism.Contraryto the need to recognizethis complexityand interdependence,the importantliteratureon organizations is dividedamong variousfields. Researchon organiza347/ASQ, September 1985
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Organizational Adaptation
tionaladaptationis the subject of inquiryin organizational
behavior,management,and economics, which emphasize
differentand often competing assumptions, foci, and explanations of cause and effect. What is needed is a greateremphasis on integrationratherthandifferentiationof views. Research needs to be more concerned with reducingconceptual
or theoreticalbarriersbetween disciplinesand literaturesand
the consequent emphasis on eclectic approachesto explain
organizationalbehavior.
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