Scanning the

Environment

Organization & Environment

An organization is a creature of its environment.
Its very survival and all of its perspectives, resources,

problems, and opportunities are generated and

conditioned by the environment.
Thus, it is important for an organization to monitor
the relevant changes taking place in its environment
and formulate strategies to adapt to these changes.

To achieve this broad perspective, the

strategist needs to develop and implement
a systematic approach to environmental
scanning

Importance Of
Environmental Scanning
The underlying importance of
environmental scanning is captured in
Darwinian laws:
the environment is ever-changing,
organisms have the ability to adapt to
a changing environment, and
organisms that do not adapt do not
survive.

Importance Of
Environmental Scanning
To survive and prosper in a changing
environment, companies must stay at the
forefront of changes affecting their industries.
First, it must be recognized that all products

and processes have performance limits and that

the closer one comes to these limits the more
expensive it becomes to shift to the next
generation of performance improvements.
Second, one must take all competition seriously.

Importance Of
Environmental
Scanning
Third, if environmental change promises potential
advantage, one must attack to win and attack even to
play the game.
Attack means gaining access to new technology,
training people in its use, investing in capacity to use
it, devising strategies to protect the position, and
holding off on investments in mature lines.
Fourth, the attack must begin early. The substitution

of one product or process for another proceeds slowly

and then predictably explodes.
Fifth, a close tie is needed between the CEO and the
operating managers. Facing change means
incorporating the environmental shifts in all aspects of
the companys strategy.

What Scanning Can

Accomplish

It helps organization to capitalize on early

opportunities rather than lose these to competitors.

It provides an early signal of impending problems,
which can be defused if recognized well in advance.
It sensitizes an organization to the changing
needs and wishes of its customers.
It provides a base of objective qualitative
information about the environment that strategists
can utilize.
It provides intellectual stimulation to strategists in
their decision making.
It improves the image of the organization with
its publics by showing that it is sensitive to its
environment and responsive to it.

The Concept Of Environment

Operationally, five different types of environments may be identified.

Four Phases in the Evolution of

Environmental Scanning
Environmental scanning identifies four evolutionary phases of
activity,

Environmental Scanning &

Marketing Strategy?
Technology convergence
Emergence of multi-functional products
Continual improvement in marketing

processes
Leveraging information for competitive
advantage
Radicalism in configuring marketing
strategy

Linking Environmental Scanning to

Corporate Strategy

Organizational Arrangements
and Issues
Corporations organize scanning activity in three
different ways
line managers undertake environmental
scanning in addition to their other work;
Scanning is made a part of the strategic
planners job;
scanning responsibility is instituted in a new
office of environmental scanning.