Chapter 2


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Chapter 2

  1. 1. CHAPTER 2 -Environmental Scanning<br />
  2. 2. INTRODUCTION:<br />Identifying the Best Business for a Location<br />-- One of the surest way to succeed in an enterprise is to set it up where the greatest number of people can reach it. In other words, it is getting the best location for a business. But there are times when a person is not given the choice he wants. He should decide what business he wants to satisfy his own idea.<br />
  3. 3. Defining Environment<br />When we scan, it is useful to view the environment in a mariner that organizes our scanning efforts. Fahey and Narayanan (1986) help by identifying three levels of environment for scanning. The task environment is the institution's set of customers. In higher education, this may include students and potential students, parents of students and of potential students, political leaders, and employers and potential employers of students. The task environment relates to a particular institution. Although the task environments of a community college and a research university within 20 miles of each other may overlap, they also differ.<br />
  4. 4. Defining Scanning<br />There are a number of ways to conceptualize scanning. Aguilar (1967) identified four types of scanning. Undirected viewing consists of reading a variety of publications for no specific purpose other than to be informed. Conditioned viewing consists of responding to this information in terms of assessing its relevance to the organization. Informal searching consists of actively seeking specific information but doing it in a relatively unstructured way. These activities are in contrast to formal searching, a proactive mode of scanning entailing formal methodologies for obtaining information for specific purposes.<br />
  5. 5. What is Environmental Scanning? <br />Whether you are planning a trip, or an excursion to buy groceries, or the direction of a corporation, you need to consider the larger external environment. For example, you want to go grocery shopping in the next town. You'd like to get this done as quickly as possible. So, you turn on the radio to listen to the traffic report. Oops. There's been an accident on the highway you usually take to get to the store. What do you do? You plan to take an alternate route that will keep you out of the traffic jam. You've done a limited form of environmental scan.<br />In terms of organizations and strategic planning, an environmental scan involves considering the factors that will influence the direction and goals of your organization. And, it includes consideration of both present and future factors that might affect the organization, since, of course, we're planning for the future, not just the present.<br />
  6. 6. What is Environmental Scanning?<br />For example, an environmental scan might project that in the next ten years, the number of people (potential customers) between the ages of 18-24 will increase from 30% to 40%. That's important information if we want to decide what kinds of new products we might consider introducing into the marketplace. Should we work on developing products targeted at a dwindling seniors population? Or should we develop products to take advantage of the shift to a youth dominated market. The environmental scan forces us to look at these factors.<br />While some suggest the environmental scan should address only factors external to the organization (e.g. markets, legislation and government actions, demographics, marketing trends, etc), we suggest that you also do an INTERNAL ENVIRONMENTAL SCAN.<br />An internal environmental scan involves looking at the present capabilities of the organization (infrastructure, hardware, personnel, abilities, structure, etc) and that information can be compared to what the organization WILL need in the future to achieve its strategic goals<br />
  7. 7. DEMOGRAPHIC ENVIRONMENT<br />The first thing to consider about a place is the size of its population and how it is distributed according to age, gender, employment, interests, and other factors this is called demography.<br />The best way to get information about the people living in a community is through a demographic survey.<br />
  8. 8. Modes Of Scanning:<br />Systematic scanning - Information related to markets and customers, changes in legislation, regulations having a direct impact on the organization's activities, government policy etc. are collected continuously by taking relevant factors into account<br />Ad-hoc scanning - Conducting special surveys and studies to deal with environmental issues from time to time<br />Processed-form scanning - Using information in a processed form available from different sources inside and outside the organization<br />
  9. 9. Objectives: <br />Detecting scientific, technical, economic, social, and political trends and events important to the institution, <br />Defining the potential threats, opportunities, or changes for the institution implied by those trends and events, <br />Promoting a future orientation in the thinking of management and staff, and <br />Alerting management and staff to trends that are converging, diverging, speeding up, slowing down, or interacting. <br />
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  11. 11. Background:<br />Environmental scanning is one of four activities comprising external analysis. As illustrated in Figure 1, external analysis is the broader activity of understanding the changing external environment that may impact the organization. In describing external analysis, Fahey and Narayanan (1986) suggest that organizations scan the environment to identify changing trends and patterns, monitor specific trends and patterns, forecast the future direction of these changes and patterns, and assess their organizational impact. Merged with internal analysis of the organization's vision, mission, strengths, and weaknesses, external analysis assists decision makers in formulating strategic directions and strategic plans.<br />The goal of environmental scanning is to alert decision makers to potentially significant external changes before they crystallize so that decision makers have sufficient lead time to react to the change. Consequently, the scope of environmental scanning is broad.<br />
  12. 12. INDUSTRY ENVIRONMENT <br />The industry environment comprises all enterprises associated with an organization in society. For higher education, factors such as public confidence in higher education or student aid legislation are industry factors affecting all institutions.<br />
  13. 13. Importance:<br />It helps us to determine the business to be handle and its future to be considered.<br />
  14. 14. REMEMBER!!!<br />We all do informal environmental scanning. However, continuous scanning is required if decision makers are to understand, anticipate, and respond to the threats and opportunities posed by changes in the external environment. It is important that campus decision makers participate in this process. Through participation, they develop a shared understanding of high priority issues and a view of the dynamics of the changing environment.<br />
  15. 15. REMEMBER!!!<br />Remember that environmental scanning is something of an art form; guidelines on how to scan are necessarily few. There are no hard and fast rules to lead to a "correct" interpretation of information, Be careful to structure your scanning process to minimize the possibility of being "blind-sided" by a change in the environment that you should have seen coming. Finally, remember that environmental scanning is only one component of external analysis. It is the starting point, however, from which you and your colleagues can identify trends and events in the environment worthy of monitoring. More importantly, it provides a basis for discerning the strategic direction of your institution from which you may plan far more effectively.<br />
  16. 16. REFERENCES: <br /><br /><br /><br />