Environmental Scanning (5/2/2009 by TQM Doctor)
The results of predictive environmental scanning help organizations focus their strategies and tactics on parts of the environment that threaten their stability (Albright, 2004). Environmental scanning provides clues to top management when adjusting the decision-making processes within the organization to meet the needs emerging circumstances and possible hazards. Part of the scanning process is an evaluation of the strengths and weaknesses of the organization in relationship to the emerging opportunities or dangers of the business environment.
The state of the market environment can dictate the type of environmental scanning required (Hough & White, 2004). For instance, in stable environments, organizations should focus their scanning efforts on sales and marketing research. In a moderate environment, more market research is required for research and development. Companies operating in turbulent market conditions should use a more continuous approach to scanning called active scanning (Nastanski, 2004). With active scanning, organizations establish many continuous monitoring activities. The results of monitoring flow to a common point, forming a single organized perspective of the changing conditions.
With environmental scanning, an organization can scan anything management believes will provide some kind of predictive value to required drive changes within the company. Therefore, even though one company may benchmark another in its scanning activities, the focus should be inward because the goal is to find clues, which suggest specific changes in internal strategy and processes (Albright, 2004). As a top manager, consider dedicating at least one individual—and possibly a small group—to performing the role of active environmental scanning as described by Nastanski (2004). The position or team should be responsible for working with all the various groups in the organization that produce or handle information that the group would capture and funnel into a single coherent picture of the market. Some of the attributes the group should follow include competition activities, customer relationship to industry, emerging technologies, regulatory changes, economic conditions, social influences, and the political climate (Albright, 2004).
References
Albright, K. S. (2004). Environmental scanning: Radar for success. Information Management Journal, 38(3), 38-45.
Handy, C. (1996). Gods of management: The changing work of organizations (3rd ed.). Oxford: Oxford University Press.
Hough, J. R., & White, M. A. (2004). Scanning actions and environmental dynamism: Gathering information for strategic decision making. Management Decision, 42(5/6), 781.
Nastanski, M. (2004). The value of active scanning to senior executives: Insights from key decision-makers. The Journal of Management Development, 23(5/6), 426.