How Environmntal Scanning Is Practised and the Challenges - Coursework Example

Instructions

Environmental Scanning

Introduction

Environmental scanning is one of the four activities that comprise external analysis. The external analysis is the activity that looks into the changing external environment and how it impacts the organization. Environmental scanning is the method that gives decision-makers the ability to understand their external environment and how its various sectors connect and translate this knowledge into the organization’s decision-making and planning processes. Brown and Weiner (1985) describe it as a sort of radar that is used to scan the world and signal the unexpected, new, major and minor and offer information pertaining to this environment.

Organizations should do a scan of the environment so as to recognize the external factors that could impact on their position on the market, and thereby, build successful responses to improve and protect their position in the coming days. The organizations do a scan in order to be ready for any surprises, spot opportunities, and pressure, improve long-term and immediate planning and increase their competitive advantage. The environmental scan looks into detecting the circumstances, rising issues, and potential issues that play a hand in determining the organization’s future ambitions. Further, the environmental scan responds to the opportunities and threats while at the same time evaluating the strengths and weaknesses of the organization. Essentially, the environmental scan is a process to collect, identify and transmit relevant information on the external factors to be transformed into plans and decisions (Kotler, 2010).

The research aims at identifying how environmental scanning is carried out and identifying the challenges that organizations face when carrying out environmental scanning. The research will use secondary data in conducting the research. Secondary data is the data collected by other researchers pertaining to the same research beforehand useful in gaining much-needed data for said research. The secondary data can be in terms of the census, books, journals, organizational records, statistics and much more. The choice for secondary data was agreed in that it will give us higher and larger quality databases that are somewhat unfeasible to collect individually (Miller, 2015).

Environmental Scanning Practice

To conduct environmental scanning, it is important to first understand what environment and scanning mean separately to gain a broader perspective of the whole issue. An environment is the area meant for scanning. An environment is divided into three levels. The task environment focuses on the organization’s customers, the industry environment consisting of the stakeholders in the society associated with the organization and the macro environment which looks at changes in the technological, social, political and environmental sectors affecting the organization directly and indirectly. Scanning can be divided into active scanning and passive scanning. Active scanning looks into the information sources that span the industry, task, and macro environments and studying the information with a keener eye. Passive scanning, on the other hand, is simply skimming on content without delving much into it (Lester & Waters, 2014).

With that information, it is possible to look at the process of environmental scanning with a better perspective. The first step in conducting an environmental scanning is to decide the level of scanning commitment that best suits your organization. The levels are irregular, continuous or periodic. Most organizations tend to prefer a periodic or an irregular system that focuses on the task environment. It is important to note that these levels address the immediate needs of the organization and as such, require less resource commitment. The requirements for these levels may be met through identifying the potential developments and critical trends affecting the organization. Also, past program review analysis can help identify where the organization stands and where it needs to be headed (Lester & Waters, 2014).

A continuous scanning system, on the other hand, needs more resources and effort to secure it. The system requires a devoted team of professionals who are on hand to ensure the success of the entire process. The professionals may include a top level member of management involved in planning and decision making as well as scanners who review specific information resources on a regular basis. When you have met this criterion for the environmental scanning, the next step will involve recruitment and training of volunteers (scanners) necessary to undertake the active scanning (Kotler, 2010).

Offering full day or half day scanning workshops is one of the effective ways of recruiting and training scanners. One can invite members from all the departments of an organization including the functional and administrative departments. If appropriate, it is also advisable to include members of the organization’s planning committee as well as senior executives of the board of trustees (Miller, 2015). Heterogeneity of experiences, backgrounds, and perspectives avoids parochial viewpoints thereby helping one see the future with minimal hindrance from the blinders or past mistakes. The invitations to the workshops should carry a message that the environmental scanning is essential for the organization and its various departments. It is also important for one to stress that the information that will be obtained from the environmental scanning process will guide the organization’s strategic planning process. The participants should be made to know that they are scanning for information that has a great impact on the future of the organization and its programs (Kotler, 2010).

When the different participants of the environmental scanning are made aware of where the environmental scanning fits in the larger external analysis and how this is later merged with internal analysis to come up with strategic plans, the next step is the initiation of exercises that see the participants prioritize and identify emerging issues and critical trends. Through these exercises, the participants are able to forward their individual knowledge pertaining the external environment to the discussion (Okumus, 2004).

During this stage, one can seek signs of change through reviewing the macro environmental sectors. This is made possible by examining the sources for the movement of various variables and how they affect the organization. Also, participants can be asked to look for signals that portray potential events on the horizon. For instance, new technologies can improve the way of producing products that could have a significant impact on the prices of commodities in the market. Another way is by listening to forecast from experts such as the change in climate and seek information from the participants on how this impacts the organization. Participants should also consider the indirect effects that may be born from direct effects during scanning. It is also important that the participants understand that the guidelines involved in conducting an environmental scan are few and their skills, experiences, judgment and abilities will be critical when interpreting the data (Lester & Waters, 2014) .

Challenges faced in environmental scanning

A challenge of conducting an environmental scanning is found in the difficulty of defining the external environment. There are numerous models and definitions of the external environment such as the cognitive model, the industry structure model, and the ecological and resource dependence model. Each of these has a different understanding and interpretation of the environment and how it should be scanned and viewed. This makes it difficult to draw an understanding of the external environment since there is numerous understanding of the company’s external environment (Okumus, 2004).

Another challenge is in the difficulty to predict the future. Wars, terrorism, rapid changes in customer attitude, increased competition, radical changes in economies and technological developments have made the external environment less predictable. It is possible that these changes will lead to an increase in environmental scanning based on the low predictability and complexity. However, gaining a reliable and comprehensive understanding of the environment is impossible (Okumus, 2004).

Collecting necessary and relevant information can lead to a major challenge during environmental scanning. These challenges may affect the reliability and confidentiality of the desired information. Even though managers may have access to all the sources of information, it is usually difficult to determine the information that is worth collecting and analyzing since the information is not packaged as either opportunities or threats. The data is usually inaccurate complex and vague and requires further interpretation. Another challenge in terms of the information is the difficulty in separating the relevant information from the irrelevant information and many environmental scans have clashing statistics and reports on the same scan (Kotler, 2010).

The identification of opportunities or threats

Identifying whether something is an opportunity or a threat is another challenge that affects environmental scanning. It is really problematic assessing the impact of an environmental trend on an organization. At times, it is actually difficult to find a clear borderline between an opportunity and a threat. It is possible that an individual can embrace a case of rapid development and change as a significant opportunity whereas another might view the same development and interpret it as a threat responding to it in a much different way (Lester & Waters, 2014). Technological developments for example in hotels can be seen as both an opportunity and a threat depending on where one is viewing these from. Through setting up central reservation systems, a hotel can effectively reach their clients. In the same light, if the client is of a business background, the same technology may hinder him/her from traveling much because of the access to teleconferencing, emails and other telecommunication advances brought about by technology (Okumus, 2004).

Another challenge is in understanding whether opportunities and threats emerge or are they identified. Previous studies tended to show that PEST (political, environmental, social and technological) analysis had a hand in identifying the opportunities and threats. It is, however, clear from new studies that studying existing practices is not enough in determining whether there is the emergence of an opportunity or a threat (Miller, 2015). The formal analytical process is a sure way of determining the position of an element as a threat or an opportunity. Previous research has seen many businesses fail because of a perceived opportunity occasioned by the PEST analysis. Other businesses have thrived based on the chances taken by their owners and have seen great successes (Okumus, 2004).

Is environmental scanning necessary for long-term planning or is it best for problem solving? That is another challenge that has plagued environmental scanning. Previous studies have suggested environmental scanning to be conducted geared towards long-term planning. However, there are certain organizations that face unexpected crises on a day to day basis. Such organizations view environmental scanning as an activity linked to the current problems and operations (Okumus, 2004).

Conclusion

In conclusion, environmental scanning is done on a daily basis at times even without our knowledge. However, it is important to conduct continuous scanning if the decision makers are to anticipate, understand and respond to the opportunities and threats that are brought about by changes in the external environment. It is important that departmental decision makers are involved in this process. Through participation, they develop a shared and collective understanding of priority issues and have a profound view on the dynamics of the changing environment (Brown & Weiner, 1985).

It is critical to note that environmental scanning is somewhat of an art form with few guidelines on how to scan. The rules are pretty slow and are not hard which, therefore, means it is hard to have the correct interpretation of information. Changes in the environment have a way of blindsiding a participant and one should be careful and foresee such happenings. It is also important to note that environmental scanning is just the beginning of the environmental analysis (Kotler, 2010). More importantly, it serves as the basis for the identification of the events worth monitoring as well as discerning the strategic direction that the organization will move forward with (Miller, 2015).