The paper "Concept of Environmental Scanning" is a good example of management coursework. An individual conducts an informational search to solve a problem or make a decision. This paper elucidates the concept of environmental scanning which has been defined by Aguilar (1967) as the process of acquiring information from the outside environment with a rationale of describing the future course of action. Environmental scanning is conceptualised after considering four types of scanning i. e. undirected viewing, conditioned viewing, informal, and formal scanning. The essay further gives a succinct account of how environmental scanning assists managers in planning and improving performance.
Lastly, factors that undermine the value of environmental scanning will be discussed. Concept of environmental scanning Environmental scanning simply involves an activity by the management to study or rather learn about events and trends within an organizational environment. In a study by Rouibah (2003), organizations are capable of collecting and processing information from external environments which then acts as the basis of organizational decisions or actions. It is therefore vital for an organization to be very active in environmental scanning. Additionally, environmental scanning helps managers, who are the decision-makers, to identify and understand strategic threats and opportunities.
Apparently, environmental scanning is recognised as a beginning and critical phase in the process of strategic management. The strategic management process is divided into the phase of scanning and interpreting information from both internal and external environment and the phase of strategic decision making. Intelligence is the output from the first phase which is then passed onto the stage of strategic decision making and implementation. This second phase captures four major activities including strategic formulation, corporate capability planning, real-time strategic response to environmental issues and carrying out strategies.
Groom (2001) notes that substantial research has been conducted on environmental scanning in western countries as opposed to less developed countries. Briefly, environmental scanning aims at drawing the attention of decision-makers to potential external changes before they develop or even advance. Managers can then make use of available time to respond to these changes. There are three levels of environments available for scanning. The first one is the task environment which comprises institutional customers. As an example, the task environment in a bank comprises of clients i. e.
both corporate and personal, investors, and other banking institution. The task environment, therefore, relates to a specific institution i. e. banking institution. The second level of the environment is the industrial environment which comprises of public confidence in a financial institution, government regulation of the financial sector. These factors affect all players in the financial industry. The broadest environmental level is macro-environment that seeks to address changes in social, technological, economic, political and environmental. Changes in macro-economic variables have a direct and indirect impact on the organizational environment.
An example is a global recession which affects interest rates of banks and financial institution. This ultimately trickles down to customers and the general public. In order to conceptualize scanning, it is imperative to identify four types of scanning as studied by Aguilar (1967). The first one is undirected viewing which entails an individual reading a publication for the sole purpose of getting informed. Secondly is conditioned viewing where a person responds to information in order to ascertain relevance to an organization. Scanning is also done through an informal search of information.
Specific information is sought in an unstructured manner. Finally, scanning is done in a formal manner, which is a practical search for information to be used for a certain purpose.