Environmental uncertainty and organizational technology policy

This is a report of a study of 54 organizations, 30 of which were nonservice firms. The purpose of the study was to evaluate various aspects of environmental uncertainty and their impacts on innovativeness (new products and processes). In a recursive, causal path model of the nonservice sample of firms, it was found significantly (p < 0.05) that the impact of a global measure of perceived environmental uncertainty on firm innovativeness is mediated by an aggressive technology policy and, in turn, the presence of a special equipment evaluation group in the organization, for major process innovations only. For minor process innovations, this global perceived uncertainty promoted adoption directly, as expected, with no mediated effects. In addition, it was found that specific causes of perceived uncertainty (competition, customers, and government regulation) have little or no influence on adoption of major process innovation and act to impede adoption of minor process innovations. Most important for this sample was the negative impact of competitive uncertainty (p < 0.05) on adoption of minor process innovations. The “objective” measures of environmental uncertainty (price volatility, and number of competitors) were found to have strong and weak negative impacts on the adoption of major process but not on minor process innovations. There is a weak tendency for these effects to be mediated by technology policy (a long-range strategy) and the presence of an evaluation group (structural response).