Capital Investment was studied as a vehicle for implementing corporate strategy; t.he longer-:term adaptation of the system to i is enviroIllllent. The research sought to explore the relationship between the d~gree of Illiberality and Unpredictability of the environment and the degree of Strategic Movement invo-Ived in different kinds of capital expenditlu'e. A second objective was to develop research methods and tools appropriate to research into the strategic relationships between general characteristics of the environment and of the system. It ,,,as argued that both Illiberality and Unpredictability have a. "Stimulus Effect" and an opposite "Constraint Effect" OIl Strategic Movement and,from this discussion,research hypotheses were developed. Secondary research hypotheses were concerned with links ltciween major classes of investment and sub-sectors of the environment. The empirical work involved visits to about thirty medium-sized publiclyquoted U.K. companies and subsequent analysis of published information, over the period 1973-75. The results provided considerable support for both linear and curvilinear hypotheses, high Strategic Movement being associated "ri th Illiberal, Predictable·Conditions. This is consistent with the argument that the main effect of Illiberality is to stimulate ilmovation in products, markets, and technology but the main effect of Unpredictability is to constrain it. Illiberali ty was more important. for Strategic Movement than Unpredictability. The five major types of investment identified were found to be associated with different environmental conditions; Systems Maintenance and Improvement, Simple E~~rulsion,Process Reorganisation, New Produc t/Market Exprulsion nnd Complex Iunovation.