DEPARTMENT OF HOSPITALITY MANAGEMENT
Steps to Establish
Environmental Scanning System
For a Hotel
Identify the steps you would take to establish an environmental scanning system for a Hotel business and critically evaluate the process as an aid to effective strategic management
Present business scenario across the world is very complex and unpredictable. The globalisation, changes in demographics and technological advancements and political changes influence the business a great deal (Kanter 1991 as cited by Chun Wei Choo, 1995). Hotel industry is one of the fast changing industries and needs to attune to the external changes for the greater viability. Therefore a hotel industry needs to have a strategic plan for a sustainable competitive advantage and for a better future. Strategic plan is a practical and flexible business plan that envisions the vision, mission and goals of the organisation, environmental scanning, strategy development, implementation and performance monitoring that every hotel industry needs to have. Environmental scan is an important component of Strategic plan that enables the managements to identify, monitor and forecast the external trends and impacts. And in combination with internal analysis it enables the management to formulate strategic directions and strategic plans. The steps in Environmental scanning include the examination of Vision, Mission and Goals of the organisation, Environmental scanning process, Strategy formulation, and Strategy implementation, Forecasting and Monitoring and Evaluation The mission statement of the hotel portrays the business vision that defines the measurable financial and strategic objectives. The objectives are the areas of emphasis within the organization with a specific goal to do quality work in a specified area. After finalising the main goals and objectives the Action Plan should be prepared for implementation, so that the success can be measured. Environmental scanning refers to collection, analysis and using the information about happenings of the field, trends, and interactions in an organisation's external environment for designing the future plans (Aguilar, 1967, Choo & Auster, 1993 as cited by Chun Wei Choo, 1995). Environmental Scan includes four types of scanning according to Aguilar, 1967 (as cited by Chun Wei Choo, 1995), Undirected viewing, Conditioned viewing, Informal searching and Formal searching. The active and suitable search for a hotel is Formal search. Morrison, Renfro, and Boucher (1984) identify only two types of scanning. Passive scanning is a casual reading without any specific purpose, while Active scanning concentrates on specific relevant information. Fahey, King, and Narayanan, 1981 (as cited by James.L.Morrison) described three types of scanning irregular, periodic, and continuous. Continuous scan is a continuous collection of data in a systematic way for the strategic planning of the organization. For hotel industry an active, formal information search is needed continuously. Only selected possible changes or shifts in macroenvironment likely to have an impact on industry can be given a focus (Renfro & Morrison, 1983). Each potential issue or trend is then analysed and ranked. For a hotel industry the scanning can take place at three levels, external macroenvironment level, industry environment level and internal level of the hotel (Fahey and Narayanan 1986 as cited by James.L.Morrison). External Environment is at the macroenvironment level the factors like social, technological, economic, and political (STEP) affect organisations directly and indirectly, and is called STEP (PEST) analysis. Social factors including demographic changes, cultural issues, career attitudes of employees, health consciousness of customers, changes in customer lifestyle, brand choice, location choice, food safety and employee safety in an organisation affect the customer needs and the size of the potential market. Quick...
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