Perceived environmental uncertainty in public organizations: An empirical exploration

Contingency theories suggest that managerial perceptions of environmental uncertainty are associated with organizational outcomes. Higher perceptions of uncertainty lead managers to pay increased attention to the strategies, structures, and processes that are likely to improve organizational performance. However, to date, there is very little evidence on the level of perceived environmental uncertainty (PEU) among managers within public organizations. This paper explores the relation among management, organizational, and strategic factors, and PEU in 48 U.K. local government service departments, before analyzing the impact of PEU on organizational effectiveness. The results show that consultation with citizens, organizational inertia, and strategic stance are all associated with PEU and that uncertainty about the external political environment is linked with better service performance. Theoretical and practical implications are discussed