An examination of the effect of environmental munificence on the relationship between magnitude of change and performance

The main purpose of this study will be to examine whether, and to what extent, differences in the munificence of the environment moderate the effect of firms' strategic changes on performance. This study looks at the adaptation model of Shortell, Morrison, and Friedman (1990) and its effect on performance by introducing munificence in the environment as a moderating variable. This is the same methodological approach which has been used by contingency theorists (Galbraith and Kanzanjian, 1986; Venkatraman, 1989; Venkatraman and Prescott, 1990) in past studies of the organization-environment relationship. It is hoped that by combining strategic choice and environmental variables in this way we may acquire a better understanding of the moderating influence of the environment on the effects of strategic changes on organizational performance.