Environmental Scanning: Remote and Industry Environmental Scanning: Remote & Industry

Environmental Scanning

Remote and Industry

The objective of this work is to answer the questions from simulation of (1) What are the lessons learned relative to the importance and effectiveness of environmental scanning? (2) What concepts and analytic tools will you be able to use in the development of strategic planning for your own organization? (3) What do the results reveal about the challenges facing strategic planners? This work will also provide (1) a clear description of the business environment problem identified in the organization; (2) relevant facts and circumstances that created the identified problem (3) a brief discussion on how the current problem can be turned into an opportunity; (4) presentation of the risks associated with the implementation of the new business opportunity and suggestions of how to mitigate such risks; and will further identify the type of information the organization will need in order to keeps its competitive edge and capitalize on the proposed business opportunity. The chosen organization will be an SME organization, or one that is small-to-medium in terms of size, and specifically will be a high-technology firm that makes provisions of Internet access and is located in branches globally.

Introduction

The contemporary business is one that is characterized by unstable conditions that affect the prosperity potential of the business particularly if the management within the business is unprepared to respond to the variety of environmental affecters that are present in today's world. It is crucial that management be properly prepared through training and education in this aspect.

I. Thinking Strategically

Strategy must be utilized in the initiative of environmental scanning if the scan is to serve the organization through the information obtained and if the information obtained is to be that which has the potential to further the organization through the information it provides. Environmental scanning is performed through acquiring information relating to events, trends, and relationships that possess the potential to affect the resources, or core of the organization. (Pfeffer & Salancik, 1978 as cited by McGee & Sawyerr, 2003; Thompson, 1967)

When performing an environmental scanning it is important to note that scanning includes the internal environment of the organization as well as the external environment. The external environment is that which is comprised of the physical and social factors that exist on the outside of the boundaries that are typical of organizations which specifically lend influence on the decisions of management. In fact there are seven sectors which can be used to categorize these factors which are the sectors existing in (1) technology; (2) competitors within the industry; (3) customers within the markets; (4) suppliers; (5) political and legal issues; (6) economic; and (7) Socio-cultural factors. Scanning efforts are, According to Daft, Sormunem & Parks (1988) and as cited by Pfeffer & Sawyerr (2003) focused on "sectors of highest uncertainty in order to reduce that uncertainty." (p.134; 387)

It is stated in the work of Pfeffer & Sawyerr (2003) that "empirical research suggests that executives of large organizations value information both generated internally and obtained from outside their respective organization" p.387 (Daft, Sormunem & Parks, 1988). Also stated is that "... scholars argue that owner-managers of small firms rely more heavily on internal sources of information compared to external sources" (Smeltzer, Fann & Nikolaisen, 1988; Arbuthnot, Slama, and Sisler, 1993 as cited by Pfeffer & Sawyerr, 2003) p.387 The fact is that environmental information is obtained from many various sources, Some of the sources are friends, family members, business associates, written reports, newspapers, trade publications, management information systems and other sources of information. Measures that are used are those both in the "Immediate" environment and the "Remote" environment. Figure 1.0 below shows the division of factors within both sectors of the business environment.

Figure 1.0

Immediate Industry Environment Sectors

Remote Environment Sectors

Technology

Political/Legal

Competitors/Industry

Economic

Customers/Market

Social/Cultural

Suppliers

Source: McGee and Sawyerr (2003) p.391

The challenges facing strategic planners are mostly in the knowing which sector to concentrate their largest effort upon in the scan being performed as well as their decision relating to the sources of information used specifically that of the internal or external environment of the organization. Interestingly, "a number of studies have found that a positive relationship between environmental scanning and performance" (Daft et al. 1988; Dollinger, 1985) exists, however this link is not direct [but] instead believed to be a consequence of the improved strategic management that effective...

1982; Smeltzer et al., 1988, Yasai-Ardekani & Nostrums, 1996)
II. Environmental Analysis

Industry related information will be taken under consideration in terms of the customers, competitors, suppliers, distributors. The Macros information (Brush, 1992) will be concentrated on gaining information both national and international in terms of economics, socio-cultural, technological and other issues and trends. As the organization grows the need for "Irregular," "Intermittent" and "Continuous" scanning are often used because the conclusion has been stated that "continuous systems are the ideal systems because attention is directed not only towards mere problem solving but towards opportunity finding and the realization that planning systems contribute to the growth and survival of the organization is a proactive say" (Costa, 1995 p.6)

Internet Usage: Demographics

There are currently 120 million adults who use the internet. The average age of Internet users is stated by Georgia Technology Institute after having completed several different surveys spanning five years to be approximately 35.0 years of age. The U.S. has the dominator of use of the Web. There was noted to be a steady stream of new users on the Internet with an average of 40% of users in three of Georgia Technology Institute's respondents that are not willing to pay for Internet access. Of the total of all adults globally, 59% of adults use the Internet. 58% of those are women while 61% are men. In the age bracket of 18-29-72% use the internet, 69% of those in the age bracket 30-49 use the internet, 59% of those in the 50-64 age bracket use the internet, and those who use the internet in the 65 years of age and older was 24%.

In terms of race and ethnicity 62% of whites, 45% of blacks, and 52% of Hispanics use the internet. Of urban adults 60% use the internet, 64% of suburban adults use the internet and 50% of rural adults use the internet.

According to household income those making less than $30,000 per year equaled 43%, household income of $30,000 to $50,000 had 65% usage of the internet, in the $50,000 to $75,000 per year 80% used the internet with those in the $75,000 and above group using the internet was 84%. In terms of education 22% had less than a high school education, 48% had a high school education, 75% had some college and 82% had at least four years college educational attainment. A 45% increase has been noted in the use of internet while at school. In a recent internet- tracking survey between 537 internet users. 51% of 106 million American adults with home internet connections are connected to the internet through broadband connections outnumbering dial-up users. 80 million individuals or 67% of those users have made purchases online. 14% of internet users have made charitable contributions online.

Reasons Given for Internet Usage:

The reasons given for internet usage were varied from checking e-mail, search engine use, map seeking, research of products prior to purchase, weather checks, hobbies and interests, travel information, news purchases, entertainment purchases, reservations, research, medical provisions, phone number and address lookup, political information, banking, obtaining financial information, sports, job seeking, gaming, instant messaging, music, background checks, chat, share of files, online auctions, file download, stock buying/selling, online educational attainment, as well as many more. (Pew Internet & American Life project Tracking, 2000) East of these were stated with the higher percentage rate items descending to the lowest percentage rate items. Noted within surveys and as already stated is the increase of use of the internet in the school setting. This increase is noted as well as the increase of internet use on a global basis.

Economic Outlook:

Stated in the work entitled "The Political Economy of Communications and the Commercialization of the Internet" written by Rory O'Brien (1998) http://www.web.net/~robrien/papers/political%20economy%20of%20communications%20paper.html is that:

"The commodification of media content involves the transformation of messages into marketable products. Realization of profit depends on the extent to which labor, consumer and capital markets can be controlled.Personal information is also becoming a commodity. Corporate means of obtaining feedback about preferences for media products, such as audience ratings for TV programs, is becoming more sophisticated, making use of advanced communication and information technologies. This use is not constrained to the mass media - it is now a major part of most economic transactions to collect information about those transactions and sell it to others. Credit card purchases are a good example; they provide the credit card company with information on your buying preferences.…