Turnover in the environmental circumstances that managers confront is likely to heighten uncertainty about the services that should be provided to clients. As the rate of environmental change increases, the need to gather new information about clients’ expectations places ever greater burdens on organizations, leading additional resources to be devoted to environmental scanning and operational planning (Boyd and Fulk 1996). Although a dynamic environment implies an increased performance management burden, it is nevertheless possible that the need to exhibit a heightened sensitivity to the external constraints surrounding an organization may ineluctably lead towards strategic behaviour that will enhance performance. Like environmental complexity, this curvilinear relationship may be particularly evident within the subjective environment. Low-moderate levels of perceived dynamism may sharpen managerial reflexes, prompting increased innovation and thereby potentially lead to better organizational outcomes (see Daft et al. 1988; Ozsomer et al. 1997; Russell and Russell 1992)—at least until environmental instability and unpredictability become so great as to preclude any kind of effective managerial response. It is therefore anticipated that environmental dynamism will exhibit either a linear negative relationship with performance or an inverted u-shaped one.