The Influence of Institutional and Task Environment Relationships on Organizational Performance: The Canadian Construction Industry

Abstract

This study compared the influence of organizations' relationships to the institutional versus task environment on organizational performance in the Canadian construction industry. This industry is characterized by both intense institutional regulation and strong market competition. Regulatory stringency and resource stringency were proposed as key determinants of the relative importance of institutional versus task environment relations in predicting organizational profitability and productivity. Results favoured the contribution of task environment relations to organizational success in support of an economic or strategic perspective on organizations. However, under highly stringent conditions, institutional relations were shown to be associated significantly with performance, suggesting that future research needs to consider both institutional and task environment effects on organizational performance and success.