Small firm adaptation: responses of physicians' organizations to regulatory and competitive uncertainty

This study addressed the pattern of small organizations' adaptation responses to uncertainty in the regulatory and competitive sectors of their environment using data from physicians in solo practice. An existing general model of adaptation was modified to reflect small-firm work processes. The result is a four-cell model that distinguishes adaptive strategies in terms of their functional orientations and how firms pursue them--whether alone or in collaboration with other firms. Data analyses supported the propositions that adaptation in small firms is a multicomponent construct and that regulatory and competitive uncertainty differentially influence the adaptation process. Although individual relationships found among the sets of adaptation activities supported the contention that adaptation choices follow a hierarchical cost pattern, the overall fit of the model suggests modification of the theory in subsequent research efforts.