This chapter discusses the environment and culture of organizations. It describes the internal and external environments that organizations operate within. The external environment includes the general environment of broader economic, social, and political forces as well as the task environment of specific groups like competitors and customers. The internal environment includes internal stakeholders and organizational culture. The chapter also examines how environments can affect organizations through factors like uncertainty and competitive forces. It explores various strategies organizations use to adapt to their environments such as strategic responses, mergers and alliances, and organizational flexibility.