Environmental scanning

Environmental scanning is one essential component of the global environmental

analysis. Environmental monitoring, environmental forecasting and environmental
assessment complete the global environmental analysis. The global environment refers to the
macro environment which comprises industries, markets, companies, clients and competitors.
Consequently, there exist corresponding analyses on the micro-level. Suppliers, customers and
competitors representing the micro environment of a company are analyzed within the industry
analysis.[1]
Environmental scanning can be defined as the study and interpretation of the political, economic,
social and technological events and trends which influence a business, an industry or even a total
market.[2] The factors which need to be considered for environmental scanning are events, trends,
issues and expectations of the different interest groups. Issues are often forerunners of trend breaks.
A trend break could be a value shift in society, a technological innovation that might be permanent or
a paradigm change. Issues are less deep-seated and can be 'a temporary short-lived reaction to a
social phenomenon'.[3] A trend can be defined as an environmental phenomenon that has adopted a
structural character

Defining Environment
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 environmentis 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.
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.
At the broadest level is the macroenvironment, where changes in the social,
technological, economic, environmental, and political (STEEP) sectors affect organizations
directly and indirectly. For example, a national or global recession increases the probability

of budget cuts in state government and, consequently, budget reductions in publicly

supported colleges and universities.

Defining Scanning
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.
Morrison, Renfro, and Boucher (1984) simplified Aguilar's four scanning types as either
passive or active scanning. Passive scanning is what most of us do when we read journals
and newspapers. We tend to read the same kinds of materials--our local ne wspaper,
perhaps a national newspaper like The New York Times or The Wall Street Journal, or an
industry newspaper like The Chronicle of Higher Education. However, the organizational
consequences of passive scanning are that we do not systematically use the information as
strategic information for planning, and we miss many ideas that signal changes in the
environment.
Active scanning focuses attention on information resources that span the task and
industry environments as well as the macroenvironment. In active scanning, it is important
to include information resources that represent different views of each STEEP sector.
Another way of looking at scanning was described by Fahey, King, and Narayanan (1981).
Their typology views scanning as irregular, periodic, and continuous.Irregular systems are
used on an ad hoc basis and tend to be crisis initiated. These systems are used when an
organization needs information for planning assumptions and conducts a scan for that
purpose only. Periodic systems are used when the planners periodically update a scan,
perhaps in preparation for a new planning cycle. Continuous systems use the active
scanning mode of data collection to systematically inform the strategic planning function of
the organization. The rationale undergirding active scanning is that potentially relevant
"data" are limited only by your conception of the environment. These data are inherently
scattered, vague, and imprecise and come from a host of sources. Since early signals often
show up in unexpected places, your scanning must be ongoing, fully integrated within your
institution, an d sufficiently comprehensive to cover the environments important to your
decisionmakers.

What Is An Environmental Scan?

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.
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.
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.
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.
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

1. Dillerup, R., Stoi, R. (2006), "Unternehmensfhrung",Vahlen, p. 179 et seq.; p. 187 et seq.

2. Kroon, J. (1995), "General Management" (2nd Edition), Pearson South Africa, p. 76
3. Kroon,J. (1995), "General Management" (2nd Edition), Pearson South Africa, p. 76
4. Kroon, J. (1995), "General Management" (2nd Edition), Pearson South Africa, p. 76
5. Jeffs, C. (2008), "Strategic Management", SAGE Publications Ltd., p. 29 et seq.
6. http://horizon.unc.edu/courses/papers/enviroscan/
7. http://work911.com/planningmaster/faq/scan.htm