This paper discusses the relationship a firm has with its total environment in the context of decline. We dimensionalize the total environment to exist at the (J) organization, (2) industry, and (3) macro levels. These levels impact the firm directly, and indirectly through interactions of the different levels. Each level of the environment or combination of levels has forces acting in similar or in different directions which results in uniquely different and complex conditions for firms facing decline. We suggest that the firm has to assess its environment carefully, establish the nature of environmental impact, and develop turnaround strategies to match the pressures of its multilayered environment in order to become competitive.
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