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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OrganizationalAdapta- The prevailing assumption in recent literature is that
tion: StrategicChoice strategic choice and environmental determinism represent
and Environmental mutually exclusive, competing explanations of organiza-
tional adaptation. The present paper, in contrast, argues
Determinism that choice and determinism are independent variables
that can be positioned on two separate continua to develop
Lawrence G. Hrebiniak a typology of organizational adaptation. The interactions of
and these variables result in four main types: (1) natural selec-
William F. Joyce tion, with minimum choice and adaptation or selection out,
(2) differentiation, with high choice and high environmen-
tal 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 organiza-
tions, the decisional emphasis on means or ends, political
behavior and conflict, and the search activities of the orga-
nization 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 eitherorgani-
zationallyor environmentallydeterminedis misleadingand
divertsresearchinquiryaway fromthe criticalinteractive
natureof organization-environment relationshipsinthe
adaptationprocess.
CHOICEVERSUSDETERMINISM
Astley andVande Ven's (1983) recent exhaustive review
suggests a majordifference in currenttheory between a
deterministicand a voluntaristicorientationintheories of orga-
nizationaladaptation.One of the dimensions in theirtypology
is a continuumrangingfromdeterminismto voluntarism,
which is dividedto place majorschools of organizationalanaly-
sis intotwo mutuallyexclusive categories. Whiletheirplace-
ment 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 differ-
ent 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
? 1985 by Cornell University. organizationaladaptation.The importantconceptualand prac-
0001-8392/85/3003-0336/$1 .00. tical issues are the interactionor interdependenceof events
336/AdministrativeScience Quarterly,30 (1985): 336-349

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 with individualinterpretationsof them, and the resultantdeci-
sions or actions. Astley andVande Ven (1983: 267), for
example, concludedthat the interestingresearchquestions
about complex organizationswould (1)admitto both determi-
nistic 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 uni-
directionalcausation,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 resultantten-
sions culminatein changes over time. The issue is how choice
is both a cause and a consequence of environmentalinflu-
ences, 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 relativevulner-
abilitiesof 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 power-
ful organizationconfrontingequallypowerfulstakeholdersindi-
cates 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 deter-
minismare 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 determi-
1 nism. Italso allows for a needed integrationof the diverse and
Theterm "adaptation" inthe currentlitera- disparateliteraturesin organizationtheory, management, and
tureis employedina numberof ways, economics, which currentlyfocus on the prepotencyeitherof
rangingsimplyfrom"change,"including
bothproactiveandreactivebehavior(Miles choice or environmentaldeterminismin the adaptation
andSnow, 1978),to a morespecificde- process.
notationof "reaction"to environmental
forces ordemands(AstleyandVande Ven,
1983).Theusage inthis paperis more OFADAPTATION
consistentwiththe formermeaning,in-
TYPOLOGY
dicatingchangethatobtainsas a resultof The present argumentis that organizationalchoice and en-
aligningorganizational capabilitieswith en-
virornmental contingencies(Hrebiniak and vironmentaldeterminismcan be positionedas independent
Joyce, 1984).Thisview allowsforproac- variablesinthe adaptationprocess. Individualsand their institu-
tive or reactiveorganizationalbehaviorin,
anticipationof or reactionto exogenous tions can choose in decision-makingcircumstances;they can
variables. 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;structuralcharacteris-
tics 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,suggest-
ing 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 transforma-
tion processes, and variousmethods or means. Even if it is
assumed that the environmentof an open system is highly
deterministic,controllingfullyand preciselythe ends or out-
comes 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 environmentaldetermi-
nism, equifinalityindicatesthat organizationalchoice nonethe-
less exists as a separate, independentvariableimportantto the
development of a dynamicequilibriumwith the externalen-
vironment.Choice,then, can be separatedfrom environmental
determinismin a logicalway, as a necessary definingcharac-
teristicof the organizationas an open system.

The purposeof the followingdiscussion is to examine the two

variablesin interaction.Choiceand determinismcan be repre-
sented 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 determinedfromwith-
out, 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 11Differentiationor Focus
Maximum choice Differentiatedchoice
Adaptation by design Adaptation within constraints

LU~~~~~~~~~~4

U
0

(n IV UndifferentiatedChoice \I NaturalSelection
Incrementalchoice Minimum choice
Adaptation by chance Adaptation or selection out

I~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Low
Low DETERMINISM
ENVIRONMENTAL High

Examples of Quadrant I situations include organizations work-

ing under conditions labeled as perfectly competitive. Viewed
in the long
runc individualfirms exercise little discretion be-
cause 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
products to command premium prices and excess profits is
vagrie wihintheenvronen (Jcobt 174;Pfefe"an
difficult, if not impossible. Firms that do not keep abreast of
339/AS~t September 1985
technological and market changes find costs rising above a
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 undifferenti-
ated 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 com-
petitive 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 depen-
dency, resultingin highenvironmentalcontrolover the
organization.
Managerialaction is obviouslylimitedand constrainedin orga-
nizationsfallingin Quadrant1,but individualsmay stilltryto
exercise options that mitigateagainst peremptoryenvironmen-
tal demands. Purposefulorganizationalactions, includingtech-
nologicaldiscoveries and other innovations,can substantially
alterthe abilityto compete underQuadrantIconditionsand
affect competitiveadvantage.Itis also possible that an orga-
nizationunderQuadrantIconditionswill 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 organiza-
tion'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 environmen-
tal 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, orga-
nizationsenjoyan influenceover others intheirtask environ-
ment (Emerson,.1962; Pfeffer, 1981). The organizationsin
QuadrantIllconfronta pluralisticenvironmentinwhich move-
ment 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 Hrebin-
iak,1980). Underconditionsin QuadrantIll,adaptationis by
design. Organizational innovationsand proactivebehaviorare
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 organiza-
tionaladaptationprocess.
InQuadrant11,both strategicchoice and environmentaldeter-
minismare 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 immutableenviron-
340/ASQ, September 1985

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 mentalconditionsseverely constraincertainoutcomes or be-
haviorsbut allow leeway and choice in others; and organiza-
tions 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 typi-
callyclosely regulatedin such diverse areas as productcharac-
teristics, representationsof performance,capitalrequire-
ments, and legalconstraintson the means of conducting
business. Yet individualchoice of strategy is paradoxicallyhigh,
due to factors such as size, marketstructure(e.g., highcon-
centration),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 gov-
ernment regulation,controls,and mandatorywarningsto con-
sumers aboutthe detrimentaleffects of theirproducts,posi-
tioned themselves so as to follow differentiationand focus
strategies and affect theirmarketsthroughextensive advertis-
ing, marketing,and lobbying.
Quadrant11also includesorganizationsincludedin multiple
niches, with each characterizedby a differentset of con-
straints,opportunities,and competing organizations.A multi-
productor multidivisional organizationwith productsor
businesses havinglittlemarketand technologicalrelatedness
withinor across industries(Rumelt,1974; Hrebiniakand
Joyce, 1984), as well as varyinglevels or types of concentra-
tion, competition,demand characteristics,and priceelastici-
ties, would very likelyconfrontthe conditionsof QuadrantII.
Despite the clearimpactand peremptorynatureof environ-
mentalfactors in some niches, the organizationstillenjoys
autonomyand a favorablepositionin others. Similarly,a multi-
unitorganizationin differentenvironmentalniches or markets,
but with fairlyhighinterdependenceacross the units due to
common technologies or verticalintegrationrequirements,
would reflectthis conditionof varyingconstraints,opportuni-
ties, and competition.The coordinated,centralizedstrategies
and simultaneousdecentralizationof business units in hetero-
geneous settings that characterizeglobalcompetition(Porter,
1980) are indicativeof this type of strategicsetting.
The last examples emphasize an importantpointabout prob-
lems of level of analysis,even inthe analysisof intraorganiza-
tionaldecisions. A quasi-autonomousunitin a largerorganiza-
tion 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 orga-
nizationmay 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 highen-
vironmentaldeterminismneed not necessarily preventindi-
vidualchoice 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 externalcon-
straints.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(Lind-
blom, 1965; Marchand Olsen, 1976; Weick, 1979). When
organizationshave no apparentstrategicthrust,it is possible to
dismiss rationalityas a guidingprincipleof organizationalbe-
haviorand to replaceit with arationalityand even capricious-
ness to explainactionover time. Buta more likelyand logical
explanationof QuadrantIVorganizationsmay simplybe that
they have an arrayof internalstrengths and competences that
are inappropriate to externalopportunitiesand conditions.Ifthe
process of strategyformulationis based in parton the align-
ment of internalcapabilitieswith exogenous contingencies
(Chandler,1962; Rumelt,1974; March,1981; Hrebiniakand
Joyce, 1984), it is reasonableto arguethat an inappropriatemix
or insufficientnumberof internalcapabilitieswill preventorga-
nizationsfromacting,despite the benignity,munificence,or
lackof threatof the environment.Inthis view, the task of the
organizationis to develop the capabilitiesor distinctivecompe-
tences needed to take advantageof environmentalconditions
and therebyalterand escape fromthe conditionsof Quadrant
IV(Quinn,1980). Because the prevailingconditionsof Quad-
rantIVultimatelycan 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 peremp-
toryexternalcontingencies 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 environmentele-
ments 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 externalenviron-
ment. To use Weber's (1947, 1967) term, a "struggle"be-
tween 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 effective-
ness 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 highcounter-
vailingpower and resources of the environment;in Quadrant
111,the organization'sresourcedependencies are the lowest
and the numberof strategicoptions the highest; undercondi-
tions 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 environ-
mentaldominance.
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). Max-
imumchoice is found in QuadrantIll,consistent with the
strategic choice literature(Levineand White, 1961; Child,
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 OrganizationalAdaptation

Table1
Effect of FourOrganizationalTypes in Choice-DeterminismTypology on OrganizationalVariables
Variable QuadrantI Quadrant11 QuadrantIII QuadrantIV
High determinism High determinism Low determinism Low determinism
Low choice Highchoice Highchoice Low choice
Choice Minimum Differentiated Maximum Incremental
Numberof
strategicchoices Few Medium-high High Few
Decisionemphasis Means Primary- means Primary- ends Means-ends
Secondary - ends Secondary - means
(efficiencyconcerns) (effectiveness concerns)
Genericstrategies Defender, Differentiation Differentiation Reactor
cost leader Focus - analyzer Focus - prospector
Autonomy,innovation Low Medium High Low
(external (internalconstraints)
constraints)
Politicalbehavior, Low-medium High High Low
conflict (interorganizational) (interorganizational)
Search Solution- Solution-driven; Slacksearch Problematic
driven some slacksearch

1972; Weick, 1979). The introduction of differentiated (Quad-

rant 11)and incremental (Quadrant IV)choice, however, pre-
sents 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 deci-
sion 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)organiza-
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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 orga-
nizationsin 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 primaryorgani-
zationaltask in QuadrantIIis to maneuveraroundexternally
imposed prescriptionsand proscriptions;in Quadrant111, the
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 care-
ful analysisof environmentaltrends and a consequent delay in
committingthemselves to a new environmentalniche, be-
haviorconsistent with QuadrantIIconditions;the risk-taking,
creativity,and innovationof the prospectorare clearlymost
consistent with the munificentconditionsof Quadrant11.The
unstable reactor,characterizedby no clearagreement on out-
comes, 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 intraorgani-
zationaldifferences, and some externallydirectedconflictin
Quadrant1.One could hypothesize highconflictfor both Quad-
rant11and 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,
1963; Jacobs, 1974). Incontrast,intraorganizational conflictis
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 Organizational Adaptation

likelyto be higherin Quadrant111, where few externalcon-

straintsexist and internalcompetitionfor resources and influ-
ence is the more probablecontributorto conflict.
Search processes. Inthe present typology,search processes
are not consistent with the popularbinarydistinctionbetween
strategicchoice and environmentaldeterminismin the litera-
ture, which basicallysuggests higheffective search versus
low, ineffective search at the two extremes of a single con-
tinuum.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 prob-
lematicdependencies, the organizationactivelyseeks ways to
lessen the controlor influenceof environmentalforces.
InQuadrantIll,by contrast,search is also highbut is qualita-
tivelydifferentthan in QuadrantI;externallygenerated con-
straintsand dependencies are fewer, if they exist, and the time
inwhich to make strategicdecisions is longerand less prob-
lematic.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 Quad-
rant1.Slacksearch is less tied to specific organizationalneeds
or pressures and is even apt occasionallyto resemble a pro-
cess 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 useful-
ness of the typologydeveloped in explainingthe relation
between choice and determinism.

DISCUSSION
The most obvious conclusionof this study is that the inter-
dependence and interactionsbetween strategicchoice and
environmentaldeterminismdefine adaptation;each is insuffi-
cient 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 con-
sequence of the other inthe adaptationprocess. To under-
stand 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 depen-
dencies 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 ex-
pected 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 importantenvironmentalele-
ments (Dahl,1963; Thompson,1967). Environmentalele-
ments - 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
process that is both organizationallyand environmentally
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 typologysug-
gests the complexityand interdependenceof importantvari-
ables and decision processes as a functionof both choice and
determinism.Contraryto the need to recognizethis complex-
ityand interdependence,the importantliteratureon organiza-
tions is dividedamong variousfields. Researchon organiza-
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 Organizational Adaptation

tionaladaptationis the subject of inquiryin organizational

behavior,management,and economics, which emphasize
differentand often competing assumptions, foci, and explana-
tions of cause and effect. What is needed is a greaterempha-
sis on integrationratherthandifferentiationof views. Re-
search needs to be more concerned with reducingconceptual
or theoreticalbarriersbetween disciplinesand literaturesand
the consequent emphasis on eclectic approachesto explain
organizationalbehavior.

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