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Environmental Scanning: Understanding the Process and Factors to Consider, Lecture notes of Management Fundamentals

An overview of environmental scanning, a crucial process for businesses to examine and understand their internal and external environments for effective strategic decision-making. The importance of monitoring, evaluating, and disseminating information from the environment to key people within the corporation, as well as the factors to consider during the scanning process, including events, trends, issues, and expectations.

Typology: Lecture notes

2018/2019

Uploaded on 04/04/2019

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Meaning of Environmental Scanning and
Factors to be considered for Environmental
Scanning
Environmental Scanning relates to examining and
understanding the environment in which a business unit
exists, in order to facilitate strategic decision making. It
refers to studying both internal as well as external
environment and analysing its impact on the business
opportunities. It also includes making prior judgements
about the risks and uncertainties that the business may
have to encounter in near future.
Hunger pointed out that Environmental scanning is the
monitoring, evaluating and disseminating of information from
the external and internal environments to key people within the
corporation. It is a tool that a corporation uses to avoid
strategic surprise and to ensure long –term health.
Azhar Kazmi, quoted in his book–“Business Policy and
Strategic Management” that –“The process by which
organizations monitor their relevant environment to identify
opportunities and threats defecting their business is known as
environmental scanning.”
The businesses function in an environment which is ever
changing as the environment is known to be dynamic; therefore
the scanning of the environment has to be a fast and regular
process.
The environmental scanning cannot be a onetime action in
a business; in fact it is constantly watching the external
environment and micro-scoping of internal
environment.Environmental Scanning provides a broader
perspective to the management and planning department
to formulate plans and strategies. In other words, it is the
process which helps organisations to observe the
environment in which they function in order to identify the
opportunities and threats impacting their business.
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Meaning of Environmental Scanning and Factors to be considered for Environmental Scanning Environmental Scanning relates to examining and understanding the environment in which a business unit exists, in order to facilitate strategic decision making. It refers to studying both internal as well as external environment and analysing its impact on the business opportunities. It also includes making prior judgements about the risks and uncertainties that the business may have to encounter in near future. Hunger pointed out that Environmental scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the corporation. It is a tool that a corporation uses to avoid strategic surprise and to ensure long –term health. Azhar Kazmi, quoted in his book–“Business Policy and Strategic Management” that –“The process by which organizations monitor their relevant environment to identify opportunities and threats defecting their business is known as environmental scanning.” The businesses function in an environment which is ever changing as the environment is known to be dynamic; therefore the scanning of the environment has to be a fast and regular process. The environmental scanning cannot be a onetime action in a business; in fact it is constantly watching the external environment and micro-scoping of internal environment.Environmental Scanning provides a broader perspective to the management and planning department to formulate plans and strategies. In other words, it is the process which helps organisations to observe the environment in which they function in order to identify the opportunities and threats impacting their business.

Factors to be consider for environmental scanning – 1.Events are relevant and specific incidents which take place in the different environmental factors.

  1. Trends are the general courses of action along which the events take place. 3. Issues are the current matters that may arise as a result of the events and trends.
  2. Expectations are the demands and requirementsof the concerned groups in view of the trends and issues .Example: Gas leakage accident at Bhopal in Dec. 1984 Event The accident of gas leakage Trend The authorities and Organizations to be conscious about safety from hazardous exposure to chemicals Issue A rising concern about environmental pollution Expectation To legislate changes in rules and regulations pertaining to safety measures and stricter enforcement through various mechanism The environmental scanning process enables an organisation to analyse the influence which various situations and changes in the environment exert on its strategic management process. Since the environment facing any organization is complex and its scanning is absolutely essential, strategists (who, as individuals or in groups –internal or external; are concerned with and play a role in strategic management) have to deal cautiously with the process of environmental scanning.