Business Policy & Strategy
Business Environment Scanning as a Precursor to Policy Formulation Written and Compiled by
FINANCE, LEVEL 400
Using business environment scanning as a starting point to strategy formulation; also known as strategic planning cannot be seen as a waste of time because without taking into account relevant environmental influences, a company cannot expect to develop its strategies. There is no generally accepted definition of strategic planning. Different authors use different terms to define the same concept. However, the definition proposed by Wheelan and Hunger (1998) is worth mentioning. In their view, strategic planning is the development of long range plans for the effective management of environmental opportunities and threats in the light of corporate strengths and weaknesses. They mentioned that such planning includes establishing the corporate mission, specifying objectives, developing strategies and setting policy guidelines. The first stage of strategic planning is to scan the business environment in order to identify internal strengths and weaknesses as well as external threats and opportunities. To this end, Gary (2010) observes that the identification and management of environmental opportunities is fundamental to the competitive positioning of companies. The identification of business environment trends can be achieved through environmental scanning, which is seen by Mintzberg (2000) as a way to examine information about events and relationships in a company's internal and external environment. Business environment scanning involves monitoring, collecting, and evaluating information in order to understand the current trends in the societal and task environments. The information is then used to forecast whether these trends will continue or whether others will take their place. Business environment scanning is vital in consolidating the...