Asian Journal of Business Management 2(4): 77-81, 2010
ISSN: 2041-8752
© M axwell Scientific Organization, 2010
Submitted date: September 01, 2010
Accepted date: October 09, 2010
Published date: December 10, 2010
Strategic Roadmap for the Analysis of Environmental Complexities
in the Textile Sector of Pakistan
1
Abdul M ajid, 2 Muhamm ad Yasir and 3 M. Tanweer Abdullah
Departm ent of Managem ent Sciences, H azara University Mansehra,
Khyber Pakhtoonkhwa, Pakistan
3
Institute of Management Studies, University of Peshawar, Pakistan
1,2
Abstract: This study examines the state of environmental complexity in the context of the developing countries
as a fund ame ntal part of organizational change and deve lopm ent. It reviews the available literature to analyze
the different viewpoints and argum ents to provide a rationale for understanding e nvironme ntal complexity. Th is
study then leads onto a discussion of potential challenges faced by the textile sector of Pakistan. The study
focuses on two types of environmental complexities related to the textile sector, which is currently the largest
manufacturing sector in Pakistan. This study suggests that environmental analysis is a prerequisite for
understanding the external environment in which general and international are the two important dimensions.
To understand these com plexities, this study suggests: recognition of the context of the developing countries;
identification of the comp lex variables fo r understanding their effects on organization; and a study of the
relationship of variables of genera l and international environmen t.
Key w ords: Env ironm ental complexities, general environment, international enviro nme nt, dev elopin g
countries, textile sector
INTRODUCTION
The organizational environment in the developing
countries is generally characterized by sev eral factors that
are detrimental to the organizational efficiency. The
political instability, energy crisis, deteriorating law and
order situation, misuse of resources, managerial
inefficiency, high production cost, less governmental
support and immense international socio-econ omic
pressures are the problems faced by m ost of the
developing economies. Due to these reasons, organization
of the developing countries is relatively less efficient than
the organization of the developed countries.
Although there has been a considerable grow th in
Pakistan in textile and textile related products during the
last decade, the organ ization in this sec tor is presently
facing a challenging situation. This situation is mainly the
result of environmental complexities. It is argued that
environmental complexities adve rsely affect the
organizational performance. Th erefore , this article
examines and describes the env ironm ental complexities of
the textile sector in Pakistan, identifies the potential risks,
and suggests a framework for further research to improve
to perfo rman ce of this sector.
Literature on environmental complexity: In the
organizational theory, comp lexity is an imp ortant variable
that characterizes both organization and its environment
(Anderson, 1999). Environmental complexity remains the
major concern for organizational theorists since the
seminal work of Emery and Trist (1965), who discussed
this concep t in the context of environmental turbulence
and chan ge. A fter their work, Thomson (1967) described
complexity as heterogeneity and diversity, whereas,
Duncan (1972) for the first time operationalized the
concept by describing two important characteristics of
complex environment. According to him , complexity is
the numb er of factors characterizing an environmen t, and
the heterogeneity am ong these fa ctors. M oreover, Duncan
also introduced the notion of Internal and External
complexities. In the internal environment, organizational
structure, culture, technology, and personnel are the
important factors affecting complexity while, customers,
suppliers, competitors, and socio-cultural components of
the environment are considered as the factors of external
complexity.
After Dun can’s work, some other significant studies
have been carried out in this field, like, Dess and
Beard (1984), M intzberg (1979), Singh (1997) and Tung
(1979). But the concentration of these researchers in their
subsequent studies remains on tw o basic points previously
described by Duncan (1972). Hence environmental
complexity could be “The num ber of different items or
elements that mu st be de alt with simultaneously by the
Corresponding Author: Abdul Majid, Department of Management Sciences, Hazara University Mansehra, Khyber
Pakhtoonkhwa-21300, Pakistan
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Asian J. Bus. Manage., 2(4): 77-81, 2010
organization” (Scott, 1992). In more comprehensive
terms, environmental complexity is the number and
interactions between the elements of the environment
whe re future behavior of the environment is unpredictable
and frequency of changes in variables is unknown. The
intensity of the interactions among elements is another
important com ponent of environme ntal complexity
(Tsoukas and Hatch, 2001). On the other hand,
organizational com plexity can be measured as the number
of activities and subsystems in the organization
(Daft, 1992). A ccording to D aft, there are three
dimensions of organizational complexity: Vertical
com plexity, Horizontal Co mple xity an d Sp atial
Complexity. Vertical Comple xity is the numbe r of levels
in organizational hierarchy, if there are mo re levels in
hierarchy it is said to be a complex organization,
Horizontal com plexity, is the num ber of d ifferent jobs to
be performed in organizational structure, and Spatial
com plexity, is the number of geo graphical loc ations.
In the context of the developing countries, the
concept of environmental complexity is still in the process
of development, and most of the aspects of environmental
complexities need to be explored furth er. The available
literature on the subject is not sufficient to understand the
dynamics and beh avior of the env ironment of the
developing countries. The major focuses of the research
are on m anufacturing and technological com plexities e.g.,
Krugman and Obstfeld (19 91). They concentrate upon the
selection of appropriate technology for production
purposes. In this context, most of the researchers interlink
technological and manufacturing complexity with product
com plexities (Barbosa and Vaidya, 1997; Virasa and
Tang, 1998). The com plexities discussed in the context
dependent literature, whether it is technological
(Bruun and Mefford, 1996), functional (Wang and
Tunzelmann, 2000); leadership (Hogue and Lord, 200 7);
manufacturing (Flynn and Flynn, 1999); or control system
(Li et al., 2005) are mostly related with the internal
organizational environment as previously conceptualized
by Duncan (1972). Conversely, the major problem for the
organization in the developing countries is to manage the
complexities associated with its external environmen t.
Qureshi (2007) identifies inflation, competitors’ actions,
government’s role, and the other stakeholders’ action as
the external factors affecting the owners’ wealth of firms.
Hence, these factors act as the sources of external
environmental com plexity for the organization. The role
of government in creating complexities and defining the
competitiveness of textile sector organization in the
developing countries has also been identified by
Shafaei (2009). As no previou s wo rk has provided a
comprehensive framework for it, we hav e particularly
focused upon the analysis of external environmental
complexities in this research.
The case of Pakistan: The issue of environmental
com plexity in Pak istan, w ith its relationship w ith
organizational performance has been under discussion
since the start of afghan war in early 1980s. Afte r the
regime of President Musharaf especially in the scenario of
war against terrorism, this phenomenon of environmental
com plexity and dynamism and its effect on organizational
performance has been h eavily debated in different circles.
As a result of environm ental co mplexities, the textile
sector of Pakistan remained the major loss bearer during
this period in terms of its exports, market share,
profitab ility and growth (APTMA, 2008). Various
policies developed during this period (for examp le Tex tile
Vision, 2005) in w hich the targets fixed by different
players (e.g., Government of Pakistan, and Textile Sector
Associations) like increasing the yarn production,
capturing the potential markets of Hong Kong, Japan and
Middle East, and increasing the value added products, and
product mix, remained unsuccessful. There are various
reasons behind these failures. Some of these include
unstable priorities, incorrect calculations and forecast
about future requirements, poor implementations of the
policies, and lack of accountability of the policy makers.
Due to these negative experiences, manufacturers of
textile and textile related products strongly criticized the
new ly developed Textile Policy (2009). In the light of
these facts, the effects of the variables of external
com plexity on organization appear to be a major issue for
the textile sector in Pak istan.
Textile sector of Pakistan: Pakistan is a developing
country. Its economy mainly depends on agriculture.
Pakistan boasts one of the largest and best irrigation
systems in the w orld. H ence , its agricultural sector is
relatively more developed than most of the other
developing nations. As far as the textile sector of Pakistan
is concerne d, it uses locally grown cotton as a raw
material for further processing. At the time of
independence of the country in 1947, there were few
spinning and comp osite units working in their individual
capacity. Over the time the Government of Pakistan
announced a number of incentives for textile sector which
motivated the investors to install new spinning and
weaving units. Therefore the textile sector has developed
rapidly in the form of various industrial hubs e.g., Multan,
Faisalabad, Lahore, and Karach i etc., Currently the textile
sector is considered as a back bone of Pa kistan’s
econ omy .
Textile sector of Pak istan co nsists of large sc ale
organized and sm all scale fragmented sub-sectors in
which there are approximately 80% small workshops,
15% medium engineering units and 5% large engineering
units (Majeed, 2004). Large scale units are established
mostly in spinning sub-sector, while small scale units
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Asian J. Bus. Manage., 2(4): 77-81, 2010
work in weaving, ginning, hosiery, towel, finishing, and
garm ents manu facturing sub -sectors. According to
Econom ic Survey of Pakistan 2008-09, textile sector of
Pakistan is comprises of 1221 ginning units, 458 spinning
units, 600 weaving units, 50 composite units and 1500
finishing units (M inistry of Finance, 20 08-09).
at the edge of chaos (Lewin, 1993; Marion, 1999). After
review ing the literature on complexity theory, we presume
that there are two types of dissipative system: internal
dissipative system, and external dissipative system. The
dissipative system whether it is internal or external has
many factors that can affect the organizational
performance. In the context of self organization of
environmental factors and creation of dissipative system,
general environment of the textile sector in Pak istan is
characterized by relatively higher interest rates, energy
constraints, raw material shortage, political instability,
and marg inal government support. These variables
compel the textile sector to estab lish mu ltiple strategies
and activities. B ut spreading attention on m ultiple
strategies creates prob lems for the industry to decide its
strategic direction. This situation in the general
environment in which there are many variables, and
several operational strategies to deal with them creates a
highly complex system in the environment that negatively
affects the various dynamics of the textile sector like
its productivity, profitability, market share, and
product mix etc.
MATERIALS AND METHODS
In this study, primary and sole objective is to analyze
the external complexities of the organizational
environment in the context of the developing countries.
For this purpose we characterize th e external complexity
of the environment in terms of its two important
dimensions: general, and international. W e then identify
and analyze the key factors and issu es concern ed w ith
these two types of complexities.
This study is based on the secondary data, which has
been collected by making use of the statistical information
on textile sector provided b y various governmen tal and
non-governmental sources. Published ma terial on the
subject e.g., books, journals, newspapers, and online
resources etc. have also been consulted for a balanced
assessment of the issues. The study principally provides
a roadmap for the analysis of environmental complexities
of the Textile Sector of Pakistan. Although the
complexities in organization env ironment of Pakistan
existed since its independence, they b ecame much more
challenging with the new policies and rules of WTO;
globalization of firms in the 21 st Century ; and more
impo rtantly the Septem ber 11 attacks on W orld Trade
Centre in New York a nd the sub sequen t war again st
terrorism that significantly changed the political and
econ omic scenario of Pakistan. Therefore, this study
specifically focuses upon the analysis of challenges faced
by the contem porary textile sector organization in
Pakistan.
International environment complexity: Pakistan is a
developing country located in a geo-strategically sensitive
region. Its international and global environme nt is
characterized by internation al pressures to extend its war
against terrorism which has adv ersely affected the
political and economic situation of the country; negative
propaganda of W estern media and other agencies against
Pakistan and trade ba rriers in different forms like quotas
and anti-dumping duties levied especially on textile and
textile related products.
All these v ariables create a difficult situation for the
business organ ization in Pakistan. To cope with these
components of complex international environment, and
develop the strategies to h andle these com plexities is
beyond the capabilities of textile sector of Pakistan.
General environment complexity: General environment
is defined as anything outside the organization
(Manson, 2001). Genera l environme nt according to
various researchers like Harvey and Reed (1994) and Bak
and Chen (1991), is constantly changing. The majo r
reason behind these changes is the self organization of the
environmental factors, which allows them to change the
environmental structure . Self organization of the factors
in environment creates a situation that can affect the
organizational
performance.
As
suggested by
Byrne (1998), self orga nization of factors exists in both
internal and external environment of the organization.
This situation according to various researchers creates a
dissipative system in the environment. Dissipative system
is one that is not in equilibrium (Waldrop, 1993). This
disequilibrium of dissipative system is often said to exist
RESULTS AND DUSCUSSION
After reviewing the literature in earlier sections, and
analyzing the environment of Pakistan, there appears to be
a huge scope for further studies to develop an
understanding of the environm ental complexities. There
is also a need for framew ork development to evaluate the
policies required to cope with the complex variables that
affect the performance of the textile sector in Pakistan.
The following sugg estions derived from this study could
be used as helpful tools to evaluate the complex
environment in Pakistan.
Understanding the environmental context: The context
of the organizational environment in the developing
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Asian J. Bus. Manage., 2(4): 77-81, 2010
countries is very much different from that in the
developed countries. To understand the environmental
complexities and develop a framework for evaluating
complexity, it is necessary to develop an understanding of
the context in which one could try to evaluate the
complexities.
evaluation of the variables existing in complex
environment to com pete w ith the no rmal and context
dependent challenges that have been discussed in the this
study. This evaluation process wo uld facilitate the textile
sector not only in its environment analysis but
identification of potential risks that it faces in various
organizational practices.
Identification of variables: After understanding the
context, the identification of the components of general
and international environment is necessary to clearly
depict the picture of external complex ities for the textile
sector. To identify these components, environmental
analy sis would be a helpful tool. To conduct the
environmental analysis of the textile sector in Pakistan, it
is necessary to und erstand its strateg ic position in
Pakistan’s economy before analyzing the variables that
create complex situation or dissipative system in general
and international environments. Besides identification,
decision about component heterogeneity is another
important step for com plexity evaluation as suggested by
Dess and Bea rd (1984).
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in their characteristics are its basic feature. Textile sector
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