The objectives of this research were to (1) examine the historical and social science literature on the effects of environmental dynamics on social units, (2) examine and resolve the methodological problems associated with empirically assessing the impact of a multidimensional concept on other variables and (3) develop and empirically evaluate a theoretical model of the effects of perceived environmental uncertainty on organizational structures and processes. The research found a clear progression of thought through the classical social philosophers emphasizing the effects of environmental dynamics. The major problem of reliability estimation for multidimensional concepts was resolved through an application of a relatively unknown psychometric technique and its application to Joreskog's confirmatory factor analysis method, Fuller's errors-in-variables regression method and least squares regression is developed. Finally, a theoretical model of perceived environmental uncertainty was developed and tested using bivariate and multivariate structural equation modeling techniques. The findings clearly show the importance of the concept of environmental uncertainty in organizational research.