Specialization, Slack Orientation, and Adaptive Capacity in Uncertain Environments

Abstract

This investigation applies a structural contingency perspective toward the problem of operations specialization under conditions of uncertainty. Generally, more environmental uncertainty is proposed to reduce the degree of specialization associated with effective adaptation. The study also considers how specialized operations, which are costly to modify due to their high asset specificities, cope with changing environments. The concept of organizational slack is employed to develop various orientations that offer adaptive capacity for specialized operations. Appropriate slack orientation is proposed to depend on whether volume or technological uncertainty is prevalent in the environment.