Characteristics of Organizational Environments and Perceived Environmental Uncertainty

TLDR

The study examines 22 decision groups in manufacturing and R&D firms to identify environmental characteristics that lead to decision‑making uncertainty. Researchers defined two environmental dimensions—simple‑complex, based on the number of factors considered, and static‑dynamic, based on how much those factors change over time. They found that dynamic‑complex environments generate the highest uncertainty, and that the static‑dynamic dimension is a stronger predictor of uncertainty than the simple‑complex dimension.

Abstract

Twenty-two decision groups in three manufacturing and three research and development organizations are studied to identify the characteristics of the environment that contribute to decision unit members experiencing uncertainty in decision making.' Two dimensions of the environment are identified. The simple-complex dimension is defined as the number of factors taken into consideration in decision making. The static-dynamic dimension is viewed as the degree to which these factors in the decision unit's environment remain basically the same over time or are in a continual process of change. Results indicate that individuals in decision units with dynamic-complex environments experience the greatest amount of uncertainty in decision making. The data also indicate that the static-dynamic dimension of the environment is a more important contributor to uncertainty than the simple-complex dimension.