One of the least discussed topics is the interface between the organization and the environment, particularly how the environment or context comes to affect the structures or decisions of organizations. We shall consider this issue in more detail in Chapter Nine. There is some evidence that the power of internal subunits varies with their relationship to critical environmental problems ( Hinings et al., 1974; Perrow, 1970, Pfeffer and Salancik, 1977). Since organizational decisions are based, at least partly, on subunit influence ( Stagner, 1969; Pfeffer and Salancik, 1974), one might suggest that organizational environments come to affect organizational actions partly by affecting the distribu-tion of powerand influence inside the organization.
Having influence within an organization determined by external pressures is important because such concentrated influence within the organization can be used to organize the activities necessary to cope with these external pressures. Reorganizing is not a trivial matter when survivaT itself may be at stake. While marketing departments may have dominated many corporations during the 1950s and 1960s, there are indications that financial and legal departments may be increasing in importance. The increasing concentration of power throughout the économie system has created both a need for expertise to deal with it and to avoid losing it. Fortune magazine (Carruth, 1973) has estimated that the companies they surveyed increased their legal bills 75 percent in six years. The interests of corporate executives have changed with changes in pressure—the chairman of the board of American Can said that he spent 60 percent of his time on legal matters in 1972, twice what he estimated he had spent five years earlier.
A lawsuit is not hard to notice. It comes neatly prepared and delivered by a process server. Most demands and changes in the environment, however, are not as readily noticeable. If organizations adapt to their environments and if environments constrain and affect behaviors, then the question of how organizations learn about their environments is an important one.
1. The Enacted Environment
The events of the world around us do not present themselves to us with neat labels and interpretations. Rather, we give meaning to the events. Weick has noted that environments are enacted. He stated that “the human creates the environment to which the system then adapts. The human actor does not react to an environment, he enacts it” (1969:64). There are two general meanings to the term enactment, and both are implied by Weick’s argument. One is to decree as by legislative process; and the other is to recreate or represent as by staging a play. Both processes are involved when one interprets events from the environment. An individual answering the question, “What did you see?” is forced both to reconstruct the image he recalls as occurring and to decree existence to some of the images he may have forgotten.
Weick attributes his development of the enactment concept to Schutz’s (1967) discussion of time and the development of meaning. “The creation of meaning is an attentional process, but it is attention to that which has already occurred. Second, since the attention is directed backward from a specific point in time (a specific here and now), whatever is occurring at the moment will influence what the person discovers when he glances backward” (Weick, 1969:65). The implication of this argument is that meaning is retrospective, or that actions are known only after they have been completed.
Giving meaning to events after they have occurred is an inherent aspect of human information processing. All perceptions of visual and auditory information from the environment are representations. What a person sees is not the stimulus external to himself but a representation of that stimulus. The particular representation does not last long unless the personstores the information in memory.
In considering information processes more complex than simple perception, the extent to which the environment is enacted is considerable. Attention is a limiting process: when one perceives one thing, simultaneous exposure to something else is impossible. Most information systems are designed with substantial redundancy to compensate for this fact of limited attention. Moreover, people fill in what they expect to perceive. Illusions and reality are constructed in this way. As one moves from simple, observable processes to complicated interpretations of events spanning time and involving multiple observations, the necessity for summarizing, selecting, discarding, and simplifying becomes predominant. As one deals more with things that are not directly observable but must be inferred from observables, there is no recourse but to use accumulated knowledge about how the world operates to make sense out of it. There are no meanings that the world gives to us as valid. There are only our created beliefs, more or less supported by what we consider as evidence, and held with more or less conviction or doubt. The meaning is created by the observer.
One other important point that Weick makes about’the’ enactment process is that the equivocal material we work on to extract meaning is, of necessity, always a representation of the past. Nothing that has not occurred is available for processing. Thus, the material for decision making is always an enacted environment of thejoast. The question, what is the environmentTsHouId more properly be, what was the environment. Many find this argument difficult to understand or accept because they envision decision making as a forward looking process in which future actions and their possible consequences are considered. In fact, the conceptions both of future actions and of future conse- quences are based on prior experience. The ability to make accurate predictions about what will happen in the future depends on the development of a description of reality, a theory which reflects attention to the details of events previously observed. Planning is based on a theory of the past, and when plans go awry, it is the theory and not tbe environment that is wrong.’
Weick’s concept of enactment provides important implications for understanding organizational actions in environments. The question of what the environment is, is meaningless without regard to the focal organization which enacts it, or more precisely, the individuals who enact it in planning the activities of the organization. If organizations can plan behavior only with respect to their constructionsof the environment and its meaning, then to speak of contexts separate from a particular focal organization makes little sense. If environments are enacted, then there are as many environments as there are enactors,which may explain why there are so many typologies of organizational environments, as well as why different organizations and even different indivicfuais within each may react differently to what appears to be the same context.
Determination of what the environment is rests with the organization. It may be wrong in its particular enactment and unable to predict its outcomes because it has a poor theory of its own reality. For an external observer predicting the behavior of the organization, the prediction and explanation of organizational behavior will be enhanced if the attentional process, as well as the objective setting, is included in the analytic framework. Something not attended to by the organization cannot affect its actions, even though it may subsequently affect its outcomes.
Weick’s description of environment is similar to an analysis Jby Dill (1962). Dill thought the environment should be examined as it affects the organization being studied and treated as information which becomes available to the organization or which the organization seeks out. There is a great deal of information, but only some of this comes to the attention of the organization and is, therefore, relevant for understanding its behavior. “Because of the sheer quantity and diversity of the inputs that are accessible and relevant, no organization is likely to notice or attend to more than a small proportion of them” (Dill, 1962:97). To link organizational actions to environmental inputs, it is necessary to analyze an organization’s exposure to information, its readiness to attend to and store various environmental inputs, and its strategies for searching the environment (Dill, 1962:97). It is also necessary to recognize that individuals and subgroups within organizations do not access the same environments and that the information they have varies. Individuals and subgroups have their own goals and activities that may bring them into contact with different aspects of the organization’s environment. Thus, it may be more reasonable to speak of different environments, attended to or enacted by different individuals and groups within the organization.
Source: Pfeffer Jeffrey, Salancik Gerald (2003), The External Control of Organizations: A Resource Dependence Perspective, Stanford Business Books; 1st edition