When the level of uncertainty increases due to external factors with respect to political, legal, technological, sociocultural, economical, competition, suppliers, customers, etc., business people may use several strategies to adapt to the changes.
Coordinating with Environmental Changes: Companies assign some of their employees working in the sales and purchasing departments to detect the changes in the environment through direct contact with the customers and suppliers in the field. They detect the changes and coordinate the organization with the key elements in the environment.
Continuous Forecasting Activities About Environment: The companies may set centralized or decentralized planning departments to forecast and plan for environmental changes. In small businesses the responsible managers may do the same activities without building a special committee for those activities. However forecasting and planning are essential for any large or small companies to cope with high environmental uncertainty.
Building Flexible Organization Structures to Fit the Environment: One of the techniques to adapt the organization to environment is to build an appropriate structure that enables the firm to effectively respond to the changes in the environment.
If the environment is a stable one and does not change rapidly, the organization generally has a formal, organizational structure with well-defined jobs, responsibilities and roles. Doing the things in such an organization highly structured through rules, regulations, policies and procedures. Decision-making is generally centralized and with little teamwork. Clearly defined formal organization structures are referred to as mechanistic structures, and they are often effective in a stable environment
Informal, minimally structured organizations with no great degree of role .and task definitions are called organic structures. This organization design is generally effective in dynamic, rapidly changing environment. It is characterized by a lack of rules, policies and procedures. This structure encourages employee teamwork and decentralizes decision-making
