The paper "Environmental Scanning in Business" is a good example of management coursework. Today, unlike a number of years ago, business managers are finding it appropriate to have a strategic understanding of the environment surrounding the business. This strategic understanding is particularly focused on the external environment of business primarily because of its dynamic nature. It is only through this understanding that firms can respond to challenges emanating from the ever-changing external environment that threatens their survival and success in an appropriate way. This understanding of the external environment or self-appraisal is perfectly captured in strategic management in concepts like an external appraisal or strategic audit, which is also what environmental scanning refers to (Karami 2008).
It is, therefore, appropriate to look at environmental scanning as the process of monitoring, assessing and distributing information from both internal and external environment to the firm’ s corporate strategists. Just as the name “ scanning” suggest, environmental scanning essentially refers to the act of looking and analyzing the external environment, and especially the economic, demographic, cultural, legal, and technological trends at any given time, in an effort to formulate strategies that can be used by the managers to maintain their firms’ competitive advantage while bettering their performance in future. Today’ s ever-changing and uncertain environment is the sole driver of the need for managers to consistently seek and integrate information and awareness of these changes in their policy formulation.
A number of important changes that managers ought to consistently seek to include the changes in their competitive environment and opportunities that constantly keep on opening up at any given time and that might be used by a firm to gain a competitive advantage.
It is only through gaining this understanding that managers can seek and integrate improvements in each area of their firms and also enhance their responsiveness and understanding of their strategies and their (strategies) success at any given time (Helfat et al 2007). Looking at environmental scanning as the continuous acquisition and application of up-to-date information on the trends, events and relationships in a business’ external environment, it is proper to conclude that environmental scanning is an important tool that managers can use to enable them to get an understanding of the external environment of their firm, from where they can respond probably with policies and strategies that enables them to maintain their competitive advantages.
This understanding and information are also vital in enabling managers to formulate effective strategies and policies that position the firms in a better position, a position that enables them to improve their respective firms’ competitive advantage in future. Due to the fact that the ability of a firm to adapt to its external environment depends primarily on its understanding and knowledge of its external changes that are taking place at any given time, environmental scanning is undoubtedly a primary system of organizational learning (Escribano et al 2009). Strategic management literature is replete with research studies that attempt to investigate the relationship that is thought to exist between the external environment of a business and the usage of different types of information sources in developing a competitive advantage, all of which confirms the existence of a positive relationship between the two (Parker, 2008).
From the findings of these studies, it is obvious that the kind of information that managers use in formulating strategies is influenced by the firm’ s competitive strategy.
This, therefore, can be construed to mean that the strategy determines the scanning behavior while scanning behavior affect the strategy as well.