Tom Burns and G.M. Stalker were among the first to identify a relationship between an organization's environment and its design. They classified environments as stable or unstable. Stable environments are relatively placid and do not change very much. Organizations in stable environments resemble System 1 organizations. Burns and Stalker called them mechanistic organizations.
Unstable environments are more volatile and prone to rapid and major changes.
Organizations in unstable environments have the basic characteristics of System 4 organizations. Burns and Stalker called them organic organizations. Paul R. Lawrence and Jay W. Lorsch extended Burns and Stalker's studies and found that subunits or department adapt to their environment just as the overall organization does. Organization size refers to how large the organization is, usually in terms of the number of fulltime employees. Organization size can affect organization design.