Effect Of Environmental Uncertainty Research Articles

Portfolio Restructuring and Limits to Hierarchical Governance: The Effects of Environmental Uncertainty and Diversification Strategy

The authors test whether acquisitions and divestitures are related to environmental uncertainty and diversification strategy. Drawing from transaction cost economics, they predicted that increases in environmental uncertainty would reduce a company's ability to manage its subsidiaries efficiently and would lead to divestiture. Conversely, they predicted that decreases in environmental uncertainty would enable a company to manage its subsidiaries more efficiently and would lead to acquisition. Those predictions were expected to be strongest for firms with intermediate levels of diversification, as such firms are believed to be the most difficult to manage efficiently. Repeated measures analyses of a panel of 164 Fortune 500 companies supported the predictions for highly diversified firms (e.g., unrelated businesses) only. Less diversified firms reacted to increases in uncertainty by acquiring and to decreases in uncertainty by divesting. The results suggest that the relationship between diversification strategy and portfolio restructuring depends on environmental uncertainty. In addition, the study findings imply that there may be limits in the hierarchy's governance efficiency in relation to market modes and that those limits may be affected by environmental uncertainty and diversification strategy.

Effects of Environmental Uncertainty and Social Value Orientation in Resource Dilemmas

This study investigated the relationship between environmental uncertainty and social value orientation in a replenishable resource dilemma paradigm. One hundred seventy-two undergraduates harvested units from a common resource pool over 20 trials. Two levels of social value orientation (cooperative, noncooperative) were crossed with two levels of replenishment rate uncertainty (low, high). As predicted, noncooperators harvested significantly more resources than cooperators and high uncertainty subjects harvested more resources than low uncertainty subjects. The primary finding was the hypothesized three-way interaction among social value orientation, environmental uncertainty, and trials: Social value orientation moderated harvest decisionsonlyunder conditions of high uncertainty during the middle series of harvest trials. Noncooperators increased their harvests during this period, while cooperators harvested less and held their harvests constant across these trials. These results demonstrate that systematic individual differences exist in decision makers' responses to high environmental uncertainty. We suggest that social value orientation may exert its effect by influencing the scanning and processing of goal-relevant cues in this decision environment.

The Effects of Environmental Uncertainty, Computer Usage, and Management Accounting Systems on Small Business

The motivation for this contingency-type study is based on the notion that prior studies on management accounting systems (MAS) has almost entirely focused on large business organizations and neglected consideration of the effects of contextual variables and MAS on organizational effectiveness or performance of small business. Using a sample of small business (SB) managers/owners as subjects, this study therefore examined the moderating effects of perceived environmental uncertainty (PEU) and computer usage on die management accounting system (MAS)/performance relationship. Performance in this study was measured using the compound growth rate of market value of the firm (GMV) and growth rate of fixed assets (GFA). SB was defined as companies with between 10 and 100 employees. Results using multiple regression analyses and partial derivatives of the regression equations showed that PEU moderated the effects of MAS on performance with MAS having a positive effect on performance under high levels of PEU. In addition, the results also showed that levels of computer usage moderated the effects of MAS on performance with MAS also having a positive effect on performance under conditions where there was a high level of computer usage. Under low levels of PEU and computer usage MAS had a negative relationship with performance.

Environmental uncertainty, strategic, planning, and technological competitive advantage

Abstract Strategic and competitive considerations have been long separated from the technological innovation activities of the firm. Part of the reason lies with the complexities involved in integrating technology and innovation issues into the firm's overall strategic planning. This study explores the effects of environmental uncertainty and planning processes (i.e., strategic planning sophistication, technology-strategic planning integration) on the firm's competitive advantage obtained through technological innovations. Contrary to the theoretical predictions, findings revealed that planning factors did not modify the impact of environmental uncertainty on the firm's technological competitive advantage. That is, managers strive to achieve technological competitive advantage by relying on intuitive, informal approaches rather than using formal, sophisticated strategic plans. These intuitive approaches may not fully tap the firm's best potential to achieve technological competitive advantage. Efforts must be directed toward effectively integrating technology into the firm's strategic planning.

Foraging in an uncertain environment: Patch exploitation

Effects of environmental uncertainty on the expected future rewards and the expected long-term reward rate of foraging animals in a patchy environment was analyzed for two types of forager; a continuous feeder which exploits a resource continuously in a patch, and a prey hunter which takes at most only one prey per patch. The environmental uncertainty was represented by random variation in parameters expressing patch quality. That is, environmental stochasticity was characterized by two parameters in each case. The total resource amount in one patch (noted r ) and resource exploitation efficiency (noted λ ) were varied for a continuous feeder. Prey size (noted r ) and prey encounter rate (noted λ ) were varied for a prey hunter. The decision process proceeds as follows; (1) the objective function to be maximized is the expected long-term reward rate of resource intake; (2) the forager discriminates patch types, each of which is assigned particular probability density functions of environmental parameters, by appearance or other indirect cues; (3) decision making (patch residence time for a continuous forager, and giving up time for a prey hunter, respectively) is conducted at the time of entering a patch by evaluating the expectation of some criterion such as the expected future gain and the expected waiting time in a given patch type. Scenario (1) is a general assumption of the intake maximization models. Scenarios (2) and (3) stress between patch uncertainty. When the two environmental parameters are independent, the stochasticity of r does not affect the expected long-term reward rate for either type of forager. However, the stochasticity of λ does reduce the expected future gain for both types of forager. Furthermore, it also increase the expected waiting time for the prey hunter. These effects depend on magnitudes of the even-order moments, and signs and magnitudes of the odd-order moments of the probability density function of λ around its mean. Positive correlation between the two stochastic parameters ( r and λ ) increases the expected future gain, and negative correlation decreases it. For the continuous feeder a stochastic environment with a positive correlation between r and λ yields the larger long-term reward rate at the optimal patch exploitation time than a deterministic environment. On the other hand, the prey hunter does not have any advantage by the stochasticity. Only when a positive correlation is extremely high does the hunter have a slightly higher expected long-term reward rate compared with the deterministic case.

The Effects of Environmental Uncertainty and Dependence on Organizational Structure and Performance: A Comparative Study

This study investigated the joint effects of perceived environmental uncertainty and dependence on resources on organizational structure and performance. Findings from two diverse settings that are considered in light of historical developments indicate that organic structures are associated with low resource dependence and that performance is not explained by the fit between environment and organization structure, but is significantly related to organic structure.

The Effect of Environmental Uncertainty on the Association of Expectancy Attitudes, Effort, and Performance

Abstract This study examined the impact of perceived environmental uncertainty on the relationship between expectancy attitudes, effort, and performance within certified public accounting firms. Professional auditors provided data on the degree of uncertainty existing in their job assignments and measurements of the expectancy model. The results indicated that as perceived uncertainty increased, the ability of the expectancy model to predict performance decreased significantly, implying that increased performance could result from positive effort and outcome associations if environmental uncertainty was reduced. These results also provided a possible explanation for the somewhat low and inconsistent results found when comparing prior expectancy studies and suggested that uncertainty is a boundary condition to be considered in future applications of the expectancy model.

Effects of Environmental Uncertainty on Information and Decision Processes in Banks

This research was partly supported by a grant from the Bank Administration Institute. The effect of environmental diversity and volatility on decision-making strategies is examined for 41 independent banks. Uncertainty is defined and measured in terms of an entropy equation, which combines environmental and probabilistic sources of decision uncertainty. Uncertainty was associated with loan managers' perceptions of the uncertainty of loan repayments and the information they collected before deciding on a loan application. The normal operations procedures used by the banks to process loans varied with the diversity, but not the volatility, of their environment. Volatility was associated with the uncertainty experienced for particular decisions. A theoretical framework with the implication of the two sources of uncertainty is discussed.e

The effect of environmental uncertainty on morphological design and fluid balance in Sarracenia purpurea L.

To explore principles of organismic design in fluctuating environments, morphological design of the leaf of the pitcher-plant, Sarracenia purpurea, was studied for a population in northern Michigan. The design criterion focused upon the leaf shape and minimum size which effectively avoids leaf desiccation (complete loss of fluid from the leaf cavity) in the face of fluctuating rainfall and meteorological conditions. Bowl- and pitcher-shaped leaves were considered. Simulations show that the pitcher geometry experiences less frequent desiccation than bowls of the same size. Desiccation frequency is inversely related to leaf size; the size distribution of pitcher leaves in the field shows that the majority of pitchers desiccate only 1-3 times per season on average, while smaller pitchers may average up to 8 times per season. A linear filter model of an organism in a fluctuating environment is presented, in which the organism selectively filters the temporal patterns of environmental input. General measures of rainfall predictability based upon information theory and spectral analysis are consistent with the model of a pitcher leaf as a low-pass (frequency) filter which avoids desiccation by eliminating high-frequency rainfall variability.