Process of environmental scanning

The steps involved in environmental scanning are :

1)Identify relevant forces in the environment :Information is gathered about the following forces.

• External forces,consisting of political legal,economic,social cultural,technological factors.
• Internal forces,consisting of technological,human,financial and information resources,organizational competencies,and stakeholders expectations.

2)Determine sources of information :They are determine by top management.They can be :

• Spaying and surveillance of a legal and ethical nature.
• Personal experiences of managers,employees,salesperson.
• External sources such as banks,competitors,suppliers,customers,government.
• Special studies by exports,consultant's,researchers.
• Meetings,conferences,committees,speeches,interviews.
• Newspapers,journals,reports,books.
• Television and radio.
• Trade and industry publications.
• Government and university publication.
• Internal sources such as files,database,documents.
• Internet,website,and databases.

Environmental scanning and forecasting

Scanning is acquiring information.It is gathering intelligence.Environmental scanning involves obtaining information from the environment to detect emerging trends and create scenarios.It monitors and interprets changes already underway.It forecasts identify opportunities that have potential impact.It is used to identify opportunities and threats to formulate strategy.

• According to Azhar Kazmi :The process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business is known as environmental scanning.
• Changes in Micro environment :They consisting of politicalegal,economic,social cultural,and technological process.
• Structure of the market :They can be competition,monopoly,monopolistic competition.
• Nature of competition :Strengths and weakness of competitors;leaders,followers,and nicher type competitors.
• Customers :The needs and behaviors of customers groups.
• Products mix :Differentiation,positioning,threat of invasion from imitation and substitute products.

The outcome of environmental scanning is creation of scenarios.They can be :

• Most probable scenarios
  

• Most favourable scenarios
• Least favourable scenarios

Environmental analysis process

Environment analysis is managerial decision making based on the assessment of opportunities and threats in the environment.
The step in environmental analysis are :
1)Scanning :It involves information gathering for assessing the nature of the environment in terms of uncertainly,complexity and dynamism it :

• Identifies early signs of future environmental changes.They are indicated by trends and events.
• Detects changes already underway.They are happening.

2)Monitoring :It involves tracking environmental trends and events.It is auditing of environment.The likely impact of environmental influences on business performance are identified.

3)Forecasting :This step forecast what is likely to happen.It lays out of path for anticipated changes. This step provides:

• Key force at work in the environment.They can be politicalegal,economic,social cultural,technological.
• Understanding of the nature of key influences and drivers of change.
• Projection of future alternative paths available.

4)assessment :This step identifies key opportunities and threats.The competitive position of business analyzed in terms of how the organization stands in relation to other organizations.competing for some resources of customers.

• Opportunities is a favorable condition which creates risks and weakens the competitive position.
• Threat is an unfavourable condition which strengthens organization's competitive position of the organization.

Environmental analysis identifies competitive position of a business organization.

Factors affecting the competitive position are :

• Competitors :Current and positional competitive and their objectives and strategics.
• Strategic groups:Other firms in the industry following similar competitive approaches.
• Market factors :Customer needs,market segments,market power,market share and growth.
• Market attractiveness :The degree of market attractiveness for the products.

Impact of change on general environment

Change is making things different.It departure from status quo.changes can be.

• Revolutionary :IT occurs rapidly with a big bangs.It requires fundamental changes in paradigm or way doing things.
• Evolutionary :It occurs over time.It requires transformational changes .IT is incremental in nature.
• Reactive :It occurs to respond to changing circumstances.
• Planned :It is orderly designed and implemented.

The impact of change on general environment can be :

a)Economic forces :The impact of change can be in terms of :

• Resource availability.
• Economics shocks,for example due to change in world oil prices.
• Liberalization,privatization,globalization.
• Health of the economy,inflection,exchange rates,incomes distribution.
• Emergence of economy groups.
• Increased diversity of work force.
• Increase outsourcing and strategic alliances.

b)Political forces:The impact of change can be in terms of :

• Changes in world politics,for example collapse of soviet union.
• Change in role of government from doer to facilitator.
• New legal framework.
• Increased activities of pressure groups.

c)Social cultural :The impact of change can be in terms of:

• Social trend,such as delayed marriage,anti-smoking attitudes.
• Cross-cultural influences.

d)Technological forces :The impact of change can be in terms of :

• Innovation and experimentation.
• Wider use of computers,information technology and commerce.
• Technological sophistication,robotics,nano technology digitization.
• Hi-tech operations.
  

Elements of technological environment

Technical environment refers to all the technological surroundings that influence organization.Technology consists of skills,methods,systems and equipment.It includes and innovations.It makes work more efficient.It is a means to transfer input into outputs.
Technology influences organizations by bringing about changes in jobs,skills,life styles,production methods and processes.Automation,computerization,robotics,informatics,biotechnology,laser,new materials and artificial intelligence have all influenced organizations.Information technology affects every function of within the organization.Organizations should be aware of technological changes tot avoid obsolescence and promote innovation.
Technological forecasting is also important.Technology reaches people through organization.It is a powerful forces that shapes their destiny.

1)Level of technology:The level of technology can be appropriate or sophisticated.It can be labour-based or capital-based.The level of technology influence organizations.

• Labour based technology :Human labour is mainly used for the operations.
• Capital based technology :Machinery is mainly used for operations.Technology is represented by automation,computerization,robotizing,etc.

2)Pace of technological change :Technology is a dynamic force.Its speed of change is acceleration.Invention,innovation and diffusion increase its pace.Organizations should adapt to the changing technological forces.They should also upgrade the skills of their human resources to effectively cope with the demands of technological changes.

Technological change influences organizations in the following :

• It can make existing industries obsolete.It can the rates of obsolescence.
• It can rejuvenate the existing industries through product improvements or cost reductions.
• It can create entirely new industries.
• It can increase government regulations.

3)Technological transfer :Sources of technology can be within the organization ,within the country or foreign countries.Technology transfer implies technology import for organizations.
Technological transfer implies technology imported from technologically advanced foreign countries.Its speed is important for organizations.

• Globalization :Global companies are the the key sources of technology transfer in developing nations.
• Projects :Turn key projects based on global bidding serve as a source of technology transfer.
• Trade :This consists of sale of equipment or machines by the manufacturer.
• Technical assistance :Bilateral and multilateral donors under technical assistance provide international consultants who bring new technology with them.
• Training and publication :They provide opportunities to about new technology.

Technological transfer influences organization by :

• Increasing efficiently and decreasing costs.
• New product development and product improvement.
• Improving production systems and processes.
• Better satisfaction of customer needs.

4)Research and development :R&D is the essence of innovation.Expectation for improvement are increasing.Customers expect new products of superior quality which are safe,comfortable and environment friendly.This calls for increase research and development budget by organizations.Government and industry collaboration and spending in R&d efforts is also an important aspect of technology environment.

social environment

It is refers to all the social surrounding that influence organization.It consists of refers related to human relationships.
Organization operate within the society.They primarily exits to satisfy societal needs.Social factors influence the policies,practices and activities of organizations.
Important elements in the social environment consists of demographics,social institution,pressure and social change.

a) Demographics :Demography is concerned with human population and its distribution .Demographic factors consist of :

• Size,distribution and growth of population
  
• Age mix of population,again population
• Urbanization of population
• Migration of population
  
• Minorities and indigenous people

b) Social institution :They consist of family,reference groups and social class.

• Family :Two or more persons related by blood,marriage or adoption who reside together constitute a family. The family as a social institution greatly influence decisions and activities of organization.
• Refers groups :They consists of group that have a direct or indirect influence on the attitude and behavior of consumers.They:

a)Export to new behavior and life style
b)influence values and attitudes
c)provide norms for behavior

• Social class :It is the rank within a society determined by its members.It can be classified into upper,middle and lower .Members of a class share similar values,interests and behavior.

c)Pressure groups :They are special interest groups.They use the political process to advance there position on an issue of social concern .They pressurize and lobby government and organizations for change in laws,policies and practices to protects there interests.

d)Social change and mobility :Change is making things different.Social change implies modification in relationship and behavior patterns in a society.Life style changes and social values women are entering job market.Quality of life issues are getting important.Concern for environment is increasing.

• Life style is a person's of living reflected in his activities ,interests and opinions.It affects product choice.
  

Cultural environment

It refers to cultural surroundings that influence organization.Culture is the complex whole which includes
shared knowledge ,customs,traditions,norms,beliefs,religion,language,symbols and works of arts and
architecture.It is created by society.It is handed down from generation to generation.
Culture is learned
behavior.It changes over time.It is made up of subcultures based on relation,language,caste and ethnicity.
Cultural factors influence organization by:

a)Influencing the type of products :The type of food people eat,beverages they drink,clothes they wear,
and the building materials they use for contraction of houses very from culture to culture.

b)Creating attitudes towards work and leisure :Work motivation,profit motivation,meaning of body
gestures,and attitudes toward time very from culture to culture.

c)Influencing values and beliefs :Values are basic convictions.Beliefs are descriptive thoughts held
about something based on knowledge,opinion or faith.Culture shapes people's views of themselves,other and
organization.
Organizations should be culturally sensitive.Cross-cultural changes brought about by
globalisation and information technology revolution are exerting significant influences on them.