The environment of an organization has an enormous impact on organizational performance. Of paramount concern to all organizational managers is the attainment of necessary resources and customers from the environment in a timely and efficient manner. The distribution of organizational factors, namely those individuals, groups, or organizations in the environment who buy the organization's goods or services, provide raw materials, new technologies, capital, labor, information, and competition, will greatly affect how an organization operates. Managers have opportunities to respond to environmental factors in a variety of ways. Efforts to respond to environmental factors by changing organizational activities are referred to as adaptation. Managers may also choose to control environmental factors by setting up favorable linkages with them or by influencing their activities.
Depending on environmental and organizational circumstances, managers may choose to adapt the organization, control the environment, or both. The decision whether to adapt the organization or control the environment will depend on the domains in which the factors are located. For instance, a manufacturer of shoes may adapt to customer demands for style by collecting information about consumer tastes in footwear. At the same time, the firm may be active in lobbying Congress to restrict the import of shoes from overseas.
Organizational adaptation implies that part or all of the organization is transformed to make its activities more compatible with existing environmental conditions. The greater the amount of uncertainty arising from the environment, the greater the need for managers to seek a variety of ways to adapt the organization.
For an organization to be successful when the environment is uncertain, managers must develop strategies and structures to protect the organization's technical core. The technical core is an organization's internal operations, which must be conducted in a predictable and orderly manner to be efficient. Thus, mechanisms must be set up that will "seal off" the technical core from environmental factors that might disrupt the internal operations of the organization. These mechanisms can be seen as coping strategies because they are designed to cope with uncertainties produced by factors in the environment. The five coping strategies are buffering, smoothing, forecasting, rationing, and boundary spanning.