Chapter III introduces definitions, premises, and propositions towards a theory of organizational cognition. It proposes principles about organizational cognition and thus it clearly distinguishes organizational cognition from the concept of organizational learning. It outlines the concept of hierarchic levels of cognition in organizational systems and thus it proposes cognition as an important element of the organization. It presents new definitions on organizations, environment along with the relations between them through cognitive perspectives. Such definitions include concepts of intelligence, cognition, autonomy, and complexity for organizations. It derives a definition of environmental complexity and it proceeds by introducing propositions about the relations between organizational complexity and environmental complexity. While the former is synonymous with organizational cognition, the latter is synonymous with environmental uncertainty.