The measurement of environmental performance: an application of Ashby's law

Abstract

Abstract Ashby's law of requisite variety is a fundamental law of organizations. An implication of the law for business organizations is that they must develop sufficient information management and decision‐making capacity to cope with the complexity in the environment in which they operate. The law has the major limitation that, for all practical purposes, variety cannot be measured; the number of states of anything other than the simplest ‘controller’ is a vast, incomputable value. However, it is possible to carry out relative studies—comparing organizations and, in this case, comparing effectiveness in different contexts. To do this, a questionnaire was used to gauge managers' perceptions of business context complexity and organizational capacity. The paper describes a study of the UK textile industry and, in particular, the response of that industry to environmental (i.e., green) pressures and opportunities. The study was undertaken both at the level of individual companies and of the industry itself. Comparisons of performance are made between the organizations' responsiveness to their natural and commercial environments. Copyright © 2003 John Wiley & Sons, Ltd.