It is important for managers to understand the environment where their business operates. This is especially true of Top Managers, who must decide how the organization will navigate that environment and deal with changes in it$.$

Blank $1$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism is the rate at which a company's general and specific environment change. Some industries have a Blank $2$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism in which change is slow, while other industries have a Blank $3$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism in which change is fast.$$

However, companies often experience both. According to Blank $4$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism $,$ most companies go through long periods of environmental stability, followed by short, complex periods of disruption and then a return to stability.

Similar to understanding the rate$$of environmental change, managers should understand Blank $5$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism $,$ or the number and complexity of factors in the environment that affect their organizations. Some organizations have a relatively Blank $6$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism with few environmental factors, but others have a more Blank $7$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism with many environmental factors.

Another factor to consider is Blank $8$ Question $1$Resource ScarcityEnvironmental ChangeSimple EnvironmentEnvironmental ComplexityStable EnvironmentEnvironmental PredictabilityPunctuated Equilibrium TheoryDiscontinuous Innovation TheoryDynamic EnvironmentComplex EnvironmentEnvironmental Activism $,$ or the abundance or shortage of critical resources in the external environment. Shortages increase the intensity of competition and may dictate strategy.$$

A good example as of this writing in $2024$ is the emerging Artificial Intelligence race between the United States and China. Recent regulations have moved production of microchips to the United States and banned their export to China $($Reuters$,2022).$ Naturally, this created a shortage in China, resulting in increased competition for existing and even black$-$market chips. The move also has implications for U$.$S$.$ based chip manufacturers like Nvidia.

How does this relate to business strategy? Here are a few thoughts:

Environmental change, complexity, and resource scarcity create Blank $9$ Question $1$CertaintyUncertainty and risk. Complex environments with frequent change and high resource scarcity are the most uncertain $($unpredictable$)$ environments, and therefore the most risky.

Business leaders need to create strategies to navigate this risk $-$ that may mean "move fast and fail often" or it might mean slowing down and carefully considering the right move. Either way, understanding the business's environment is key.