Explain the concept and process of Environmental Scanning?
Answer
Environmental scanning
Environmental scanning may be defined as the process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business for the purpose o taking strategic decisions.
It helps identify the early signals of potential changes in the environment. It also detects the changes that are already underway. It normally reveals ambiguous, incomplete, or unconnected data and information. It involves a detailed and micro-study of the environment. Hence. it is also called the X-ray of the environment. The environmental uncertainty, complexity, and dynamism are studied to assess the trend of the environment. It is the base of environment analysis. It is normally done when there is a high level of uncertainty in the environment. It is a continuous process.
It also helps to evaluate the long-term scanning strategic plan that will be aligned with future business conditions.The scanning system should be aligned with the organizational context Hence, a scanning system designed for a volatile environment may be inappropriate for a stable environment. Many organizations even use special software and the internet for environmental scanning.
From the above discussion, it may be concluded that environmental scanning is a continuous process of study and analysis of the environment to detect the emerging trend in the environment.
Process of Environmental Scanning
Environmental scanning is an ongoing process. The following process is adopted for environmental scanning.
Study the Forces and Nature of the Environment
In the first step of environmental scanning, the forces of the environment that have got significant bearing in the growth and development of the business should be identified.
They may be political, economic, socio-cultural, technological, legal, physical environment, and global components. After this, the nature of the environmental components is studied. The nature of the environment may be simple or complex. It may also be stable or volatile. The nature of the environment affects a firm's ability to predict the future. Some businesses may be operating in a simple environment and others in the complex. When there is a high level of uncertainty and complexity in the environment, environmental scanning becomes more critical.
Determine the Sources of Information
After studying the forces and nature of the environment, the sources of collecting information from the environment should be determined. There are different sources through which information on the business environment may be collected. They are as follows.
Secondary sources:
Newspaper, book, research articles, industrial and trade publications, government publication, and annual report of the competitors
Mass media:
Radio, TV, and Internet
Internal sources:
Internal reports, management information system, data network, and employee
External agencies:
Consumers, marketing intermediaries, and suppliers
Formal studies:
Formal research and study by the employee, research agencies, and educational institutions
Spying and surveillance of the competitors.
2. Explain the concept and process of Environmental Scanning? ~ Vivek Economics & Accountancy
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