Conclusions
This paper has explored the linear and nonlinear effects of organizational environ-ments on performance. The statistical results indicate that objective and subjective measures of the environmental munificence confronted by organizations exhibit a linear relationship with performance. Organizations operating in a munificent context perform better than their counterparts in less favourable circumstances, irrespective of how munificence is measured. By contrast, those operating in a rapidly changing and unpredictable environment (or one that is perceived by managers to be dynamic in this way) do worse than their counterparts in a more stable and predictable context. Managers operating in an environment that they believe to be complex actually do no better or worse than managers in a less complex environment. However, organizations operating in an “objectively” complex environment do not perform as well.