ENVIRONMENTAL UNCERTAINTY

Gupta and Goyal (1989) asserted that organization theory can be separated into its environmental creative aspects and environmental adaptive aspects to explore the proactive relationships between environmental uncertainty and organizational strategy. 

The creative aspect focuses on the extent to which the core capacity has been actively changed in response to the environmental uncertainty in order to create the best state of business operation. In contrast, the adaptive aspect focuses on the extent to which a manufacturer adopts a passive strategy to respond to changes in environmental factors. 

Most of past researches discussed the latter adaptive aspect, a one-way causal relationship from environmental uncertainty to the enhancement of innovation capability.