factors and forces outside the organization that affect its performance. As shown in Exhibit 2-2, it includes several different Show
The economic component encompasses factors such as interest rates, inflation, changes in disposable income, stock market fluctuations, and business The demographic component is concerned with trends in population characteristics such as age, race, gender, education level, geographic location, income, and family composition. The political/legal component looks at federal, state, and local laws as well as global laws and laws of other countries. It also includes a country's political conditions and stability. The sociocultural component is concerned with societal and cultural factors such as values, attitudes, trends, traditions, lifestyles, beliefs, tastes, and patterns of behavior. The technological component is concerned with scientific or industrial innovations. And the global component encompasses those issues associated with globalization and a world economy
An organization likes to have a steady and abundant supply of resources so that it can easily manage its domain and satisfy its stakeholders. The forces discussed earlier Opens in new window create uncertainty for organizations and make it difficult for them to control the flow of resources they need. These set of forces cause uncertainty and affect organizations. When environment becomes more complex, more unstable and poorer, the level of uncertainty increases. The capacity of an environment refers to the degree to which it can support growth. Rich and growing environments generate excess resources, which can be used by organization in times of difficult and relative scarcity. When the environment is volatile, there is a high degree of unpredictable change, the environment is dynamic. In a dynamic environment, the management finds it difficult to predict accurately the environment. The factors that cause uncertainty are discussed below. Environmental ComplexityComplexity can increase greatly when specific and general forces in the environment become interconnected. The more interconnected the forces in an organization’s specific and general environments are, the more uncertainty the organization faces. The more complex an organization’s environment, the greater the uncertainty about that environment. When an organization is complex, it becomes difficult to predict and control the flow of resources. Environmental complexity thus is a function of the strength, number and interconnectedness of the specific and general forces that an organization has to manage. It is therefore important for organizations to reduce the number of dealings and thus reduce the complexity of its environment. Environmental DynamismAn environment is said to be stable if forces affecting the supply of resources can be predictable while the environment is said to be dynamic (unstable) if the organization cannot predict the way the forces will change over time. In today’s world, with the existence of global markets, the environment is becoming more complex and hence more dynamic. An organization in a dynamic, unstable environment will seek ways to make the environment more predictable. Environmental RichnessEnvironmental richness is a function of the amount of resources available to support an organization’s domain. In rich environments, resources are available in large quantities and therefore organizations need not compete for resources. Therefore, the uncertainty is low. The poorer the environment, the more difficult the problems organizations face in managing resources. Environments are poor for two reasons:
AbstractInformed by the confusion theory, this study tests the three main aspects of environmental uncertainty on organizational creativity and extends the moderating model of organizational agility in uncertain environments. The data were collected from 174 managers of five-star hotels. Construct validity and the hypotheses were tested using AMOS 26.0. The findings show that organizational agility moderates the negative impacts of competitive and technological uncertainty on organizational creativity. The results suggest that in highly dynamic and complex environments, organizations must reduce bureaucracy to manage the challenges of uncertainty. Informed by the confusion and contingency theories, this study offers new insights into the relationship between environmental uncertainty, organizational creativity, and organizational agility in the hospitality industry. IntroductionOrganizational creativity is defined as the purposeful creation, application, and implementation of novel ideas within a job role, team, or organization to achieve the best results for that organization (West, 1989). Organizational creativity is widely recognized as a competitive advantage leading to more effective customer problem-solving and higher organizational performance (Byttebie and Vullings, 2015). Empirical creativity research shows an abundance of studies regarding positive predictors of creativity, such as cognitive style (Lomberg et al., 2017), organizational climate and context (Jain and Jain, 2016), and social support and shared vision (Blomberg et al., 2017; Yeh and Huan, 2017). Yeh and Huan (2017) demonstrated that the degrees of freedom, social support, and resources are factors associated with the quantity and quality of creative performance among back-of--house hospitality employees. A meta-analysis by Da Costa et al. (2015) revealed that divergent thinking, as a part of the mechanism that results in individual creativity (Runco, 2001), emotional intelligence, openness to experience, and intrinsic motivation are associated with creativity. Previous research has investigated the positive contextual factors affecting creativity in organizations. However, little has been done to investigate the factors and conditions that may decelerate the process of creativity in an organization. In the hospitality industry, the success rate of creativity is relatively low because of different levels of dynamism, complexity, and knowledge, and the lack of suitable tools for coping with creativity issues, such as uncertainty barriers (Köseoglu et al., 2013; Yeh and Huan, 2017). The hospitality industry is affected by political, environmental, and economic issues that have led to increasing complexity and dynamism. Knowing the sources of these uncertainties is crucial because of how they impact product and service quality, cost production, decision-making, and risks within an organization (Okumus et al., 2010; Parnell, 2013). To address this gap in the literature, this study investigates the effect of three significant types of environmental uncertainty—technology, market, and competitive–on organizational creativity (Köseoglu et al., 2013). This study utilizes confusion theory to offer new insights into the correlation between environmental uncertainty and organizational creativity. According to confusion theory (Watson and French, 1966), confusion is created by uncertainty, which makes it for a difficult learning and predicting process. While it has been shown that uncertainty is correlated with creativity, and the potential for failure, research on service and hospitality creativity to acquire information and understand the different sources of uncertainty remains rare (Yan and Yan, 2017). Identifying effective strategies to help decision-makers deal with environmental uncertainty to maintain their consistently high performance and enhance their competitive position is vital (Long et al., 2014). Although several studies have tested the role of environmental uncertainty moderators (Köseoglu et al., 2013; Parnell et al., 2012), to the best of the authors’ knowledge, organizational agility has not been examined as a potential moderator of environmental uncertainty. Organizational agility is an organization’s capacity for changing or adapting in response to environmental changes (Dove, 1999). Organizational agility also involves controlling and responding to the nonstop and rapid changes in complex environments (Darvishmotevali and Tajeddini, 2019). According to the contingency theory (Fiedler, 1964), organizations will be more successful and effective if their structure is adaptive to environmental changes. The authors of the present study postulate that agility is a key driver for organizations in promoting innovation and coping with complexity in uncertain environments. Thus, this study’s second aim is testing the role of organizational agility as an organizational tool that lessens the negative effect of environmental uncertainty on organizational creativity. The results of this study contribute to the literature in two ways. First, our findings assess how different key sources of environmental uncertainty impact organizational creativity. Second, the results enrich the organizational creativity literature through the moderating role of organizational agility to dampen the effect of environmental uncertainty on organizational creativity. Practically, the findings of the present study offer several useful managerial implications for hospitality managers related to recognizing different sources of environmental uncertainty and organizational agility may support organizational creativity in the uncertain environment of the hospitality industry. Section snippetsTheoretical reviewStrategic management researchers consider environmental uncertainty as one of the main factors in strategy formulation and implementation process that may shape organizational creativity and organizational agility (Bourgeois III, 1980; Dess, and Origer, 1987; Elbanna and Fadol, 2016; Ireland et al., 1987). Hence, two main theories –confusion theory and contingency theory- in the business and management field may help researchers explain the link between environmental uncertainty, organizational Environmental uncertainty and organizational creativityOkumus et al. (2010) define environmental uncertainty as “the degree of uncertainty and changes in the task and general environments” (p.178). Based on the confusion theory, individuals cannot distinguish between the pieces of information presented in an uncertain environment. Consequently, confusion manifests as delayed decision-making, dissatisfaction, and reduced commitment to the source of the confusion (Mitchell et al., 2005). Employees who experience confusion in uncertain environments Data collection and sample characteristicsThe complex and dynamic nature of North Cyprus’ geopolitical situation offers a rich context for examining the role of environmental uncertainty environmental uncertainty (Sandybayev, 2014; Sülün and Tziarras, 2017). Purposive sampling was used to identify five-star hotels, which, due to their appropriate characteristics, are well aligned with the aims of the study. This category of hotels might be exposed to increased environmental uncertainty, emphasize strategic management and creativity in Reliability and validity analysisThe measurement items were factor analyzed using AMOS 26.0 to test the factorial validity. The results indicate that all items loaded heavily on underlying variables and confirm that the proposed five-variables model according to the adjunct fit indices has a reasonable fit to the data: X2/df = 1.521, confirmatory factor index = 0.944, incremental fit index = 0.942, Tucker-Lewis coefficient = 0.939, relative fit indices = 0.840, and root mean squared error approximation = 0.055(Hair et al., 2010 DiscussionThe main objectives of this study were two-fold: First, testing the impact of different types of environmental uncertainty (technological, market, and competitive) on organizational creativity in the hospitality industry, and second, extending the moderating model of organizational agility in an uncertain environment. Environmental uncertainty is the inability to predict external changes. When the complexity and dynamism of an environment are high, the environment is highly uncertain, and the
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What is environmental uncertainty and complexity?Environmental uncertainty complexity essentially is a reflection of the environment in which a project is undertaken, and it is hard to imagine many facets of a project that can bring more uncertainty than having the team distributed across multiple locations.
Why does environmental complexity lead to organizational complexity?The environment creates opportunities and limits for a company's structure and subsequently, its strategy. Increased uncertainty in the environment leads to higher organization variations in the structure in order for an organization to be innovatively efficient.
What are the three factors causing uncertainty in the organizational environment?Duncan (1972) describes three factors that contribute to this sense of uncertainty: (a) a lack of information about environmental factors that would influence a given decision-making situation; (b) a lack of knowledge about the effects of an incorrect decision; and (c) the inability of the decision-maker to assess the ...
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