ABSTRACT
Organizational theorists have until recently said little about how environments change. In the 1960s it was necessary to argue that environments did in fact change. Work on the evolution of environments applied open systems theory to argue that environments were becoming more complex. Efficiency is partly socially determined, such as with the establishment of a technological standard, which often depends on perception and social processes as much as objective efficiency, but there are also elements of efficiency that persist across negotiated environments. Actors can contribute to technical change by providing innovations, and encouraging the diffusion of innovations. A healthy debate exists regarding the source of innovations, with the central question being whether innovations are mainly knowledge-induced or demand-induced. Actors will act on behalf of organizational forms that they favor because of perceived efficiency, or because of endowments or sunk costs. They may attempt to manipulate the environment in a number of ways such as building coalitions or using coercion.
