The purpose of this study was to determine the extent to which the literature on environmental uncertainty was generalizable to a developing country. Recent profound changes in its economy, including the NAFTA agreement, led us to conclude that Mexico provided a natural test setting in which to assess managers' perceptions of environmental uncertainty and their strategic and organizational responses to it. Forty-five Mexican managers with responsibility for the strategic direction of their firms were interviewed in Monterrey, Guadalajara, and Mexico City. Results indicated that Mexican managers responded to environmental turbulence by adapting planning processes, competitive strategies, organization structure, and managerial process; these changes generally conformed to predictions in the uncertainty and contingency literatures regarding adaptation to uncertain environments. Although the majority of firms interviewed reported making significant changes to their organizational structures, implementation lagged both reported structural adaptation and that of strategic change. In fact, there was significant retention of the functional mindset, even when environmental and strategic conditions called for more decentralized arrangements. This contradiction creates an opportunity for partnership. Combining foreign firms' knowledge of the reengineering process with the local partner's business and political relationships creates a synergy that may justify foreign expansion into Mexico.
- environmental uncertainty
- strategic and organizational adaptation
ASJC Scopus subject areas
- Business and International Management
- Business, Management and Accounting (miscellaneous)