While it is true that the external environment is critical regardless of what industry an organization operates in, the health care environment provides a plethora of challenges that are rarely found in other industries. The legal and regulatory environment, the competitive forces, the strength of large buying groups, the rate of technological change among others have had a major impact on the performance of health care organizations. Although these pressures have existed for decades, we still have much to learn about their impact. Two of the articles in this issue address related aspects of the relationship between health care organizations and their environment-the impact of perceived environmental changes and the enactment of the environment. As Johnson and Bunderson explain in their article on litigation and the Florida nursing home industry, this perspective is empowering.

First, in the paper by Christopher Johnson and J. Stuart Bunderson, the authors found that the nursing homes they studied not only responded to their environment but also created the environment in which they operated. Their interpretations led to organizational actions that elicited responses from the environment, thus changing it.

Second, Kamalesh Kumar, Ram Subramanian, and Karen Strandholm investigated the linkage between perceived environmental changes and strategic adaptations in hospitals. Two hospitals, facing the same environment, may perceive it very differently, and those perceptions will have an impact on the kinds of strategies they pursue.

These articles raise interesting questions about the relationship between the organization and its environment. For example, the health care industry has been defined as having strong institutional pressures. If that environment is in part enacted by the organizations operating in it and if the perceptions affect that enactment, it suggests that a considerable degree of agency is involved in the creation of the institutional pressures. We hope that the theoretical and practical implications of these articles are further developed.

We are also very pleased to present a FORUM on the adoption and diffusion of health care innovations. The FORUM is based on a symposium that was sponsored jointly by the Health Care Management and the Organizational Theory Divisions at the annual meeting of the Academy of Management in 2001. Each article, in its own way, focuses on evidence of the effectiveness or appropriateness of health care innovations-the nature of evidence, its role, and its legitimization. Andrew Van de Ven and Margarete Schomaker, in their commentary, pick up on this theme, concluding that scientific evidence is not sufficient to guide the adoption or diffusion of innovations in health care.

-Barbara Bigelow, Ph.D.

Coeditor

-Margarete Arndt, D.B.A.

Coeditor