Environment, Organization And Effectiveness: A Biographical Approach[1]

Answers to the question of what makes an organization effective have proved elusive despite more than 20 years of intensive theorizing and research. Yet the search for answers, which gained momentum with Lawrence and Lorsch's (1969) Organization and Environment, clearly has had salutary effects on students of organizations and their work. This paper offers an approach to analysing organizations explicitly based on two of those benefits. The first is the shift toward a more dynamic orientation for explaining organizational configurations and outcomes. The second is the identification of strategic decisionmaking as the key link between organizational environment, structures, and effectiveness. By merging these two, we construct a biographical approach to the study of organizations. This approach sees organizations as evolving through time in response to, or in anticipation of, both external and internal forces. We view effectiveness as the outcome of a variety of decisions taken by one or more groups of organizational actors ‐ elites or coalitions ‐ in the context of bounded rationalities and environmental and structural constraints. So decision processes underpin observed configurations of environmental and structural features and link these configurations to effectiveness. An organization's biography ‐ the pattern of its evolution ‐ can be conceptualized as a succession of decisions and their consequences, with some decisions having a major long‐term influence on the direction taken by the organization and its effectiveness, while others have but an incremental influence. This article is an initial effort to make concrete our ideas. The opening section discusses organizational decision‐making and organizational effectiveness. This is the core of our approach: a basis for categorizing organizational decisions and in particular for singling out those which can be regarded as strategic. It is our contention that significant decisions vary across organizations and that it will embrace rather than ignore history and context. And ultimately, it will enhance our understanding of organizational effectiveness.