All executives must make decisions from time to time
and these are based on the ability to understand the environment in which a
company exists. Strategy should naturally follow an environmental scan. Only
once a company understands the market, their resources, and their competitors should
they formulate a strategy. A proper scan can encourage futures thinking,
systems practice, scenario narratives and risk assessment that help companies
meet their environmental challenges (Clemens, 2009).
An environmental scan affords organizations an
opportunity to examine their internal and external environment to make better
decisions. The scan generally requires the investigation of the internal
environment, task environment, and the societal/global environment (Vesper,
1996). Using the three frameworks it is possible to put decisions through a
larger decision making filter. They are as follows:
Internal
Environment: The internal abilities of the
organization to meet new demands. It the ability of management to come to new
conclusions, put their abilities to use and focus their resources on mastering
challenges. This arena includes human capital, financial resources, and much
more.
Task
Environment: The tasks and goals that need to be
achieved in the local competitive environment. Organizations will need to
ensure that they can achieve the purpose and marketing. This environment contains
direct competitors to the business.
Societal/Global
Environment: The larger environment in which the
organization competes. Each industry is pressured by larger global and societal
trends that impact its ability to succeed. This may be governmental,
sociological, and global pricing.
Executives that work within
difficult environments often scan their environment than those who don’t. For
example, hotel executives scan their environment to a greater extent when they
experience change, a dynamic environment, and complexity in the task allocation
(Jorgaratnam & Wong, 2009). They do this to ensure that they understand the
environment and make appropriate strategic changes to best that market.
Certain types of personalities are
more likely scan more than others. For example, a study of 201 hotel executives
found that entrepreneurial personalities scanned their environment more than
those who are not (Jogaratnam, 2005). They scanned their environment to
determine their next moves in order to ensure that their decisions exist within
a larger context.
The environmental scan is not a loose cannon approach. It is
a system that affords one the opportunity to judge decisions by various
frameworks. This includes the ability to judge organizational resources, with
the competitive environment and the global environment to ensure the company is
ready to meet these challenges. Without this scan there is a higher likelihood
that decisions will be made short-sighted, poorly designed, or short-lived
thereby pushing a company down the wrong developmental path.
Clemens,
r. (2009). Environmental scanning and scenario planning: a 12-month perspective
on applying the viable systems model to developing public sector foresight. Systematic Practice & Action Research,
22 (4).
Jogaratnam,
G. (2005). Management style and environmental scanning in the search for
business opportunities and challenges. International
Journal of Hospitality & Tourism Administration, 6 (1).
Jogaratnam, G. & Wong, K.
(2009). Environmental uncertainty and scanning behavior: an assessment of
top-level hotel executives. International
Journal of Hospitality & Tourism Administration, 10 (1).
Murphy,
P. (2008). The Business of Resort
Management. Elsevier, San Diego
Vesper,
K. (1996). New Venture Experience.
Seattle: Vector Books
