Organizational form and core competencies: An analysis of organizational responses to environmental change

This dissertation examines the role of organizational form in the adaptation of organizations to environmental change. Two general research questions guide the investigation: (1) Does organizational form affect organizational responses to environmental change? and (2) To what extent is response effectiveness related to the core competencies of an organization's form? On the basis of a review of relevant literature, two propositions are presented. First, it is proposed that when faced with environmental change, organizations will respond in ways characteristic of their prevailing organizational form. Second, it is proposed that organizations employing competency-consistent responses to environmental change will outperform organizations employing competency-inconsistent responses. Operational hypotheses, based on the propositions, were tested in a longitudinal study of the Florida hospital industry in the 1980s.; The results of hypotheses tests and additional exploratory analyses suggest that when organizational form is suited to the emerging environmental conditions, form moderates organizational responses and their effectiveness. In such cases, the organizations appear to be able to enact responses from their available response sets that maintain consistency with prior form and effect performance improvements. The organizations in the sample identified as possessing competencies in both efficiency and innovativeness were most aptly suited to the environment; they were able to effectively pursue competency-consistent responses to environmental change. When the environmental change demands responses that require organizations to depart from their prevailing form, most organizations are constrained by their narrowly prescribed response sets and fail to respond in a coherent manner. However, some organizations were able to respond in ways inconsistent with their prevailing form and improve their performance from doing so; those responses essentially moved them toward becoming the more flexible form of organization that was best suited to the environment. In addition, those organizations with few honed competencies prior to the environmental shift displayed adaptive capabilities, as they were able to develop necessary competencies and improve their performance.; The findings of this study provide partial support for the configurational, adaptive, and ecological theories of organizational change and highlight the need to consider multiple theoretical views in the examination of organizational adaptation to environmental change.