Marketing: Decision Making and Formal Scanning Process

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Developing an environmental scanning process in the hotel sector

Jorge Costa Professor, Fernando Pessoa University, Portugal Richard Teare Granada Professor, International Management Centres Association, UK

Keywords

The development of the hotel sector in Portugal has been scarcely documented with Abstract little literature published, and that which is Investigates the environmental available, mostly reporting on the occupancy scanning activities of hotel chains rates and revenues of hotels in the country. operating in Portugal. Attitudes More recently, however, due to the towards environmental scanning by companies where strategy was increasing competition of other tourist formalised through a formal writdestinations and the bargaining power of ten strategic plan (Intenders) and tour operators, Portuguese hoteliers became those companies where strategy aware of the need to take a more rigorous was informally developed through a ``vision'' or ``informal plan'' managerial approach to their business (Realizers) were compared. Face (Cavaco, 1993). This, coupled with an to face interviews were conducted awareness campaign developed by the with board level executives to government and supported by European identify and assess the relevance of a formal environmental scanfunds, led to the identification of the main ning process, the characteristics challenges facing the Portuguese hotel sector: of such a process, barriers to its to improve quality, product and market development and ways to overdiversification; to increase productivity and come them. A cognitive mapping technique was used in the analysis reduce costs; to define specific marketing of respondents' perceptions topolicies and to improve management wards the development of such a structures (Relvas, 1993; Martins, 1993). process, with the maps showing These challenges contributed to an more similarities than differences between the comparison groups, additional pressure on hoteliers to re-think thus highlighting the importance their approach to strategy development of this process for both intenders which traditionally had been highly reactive and realizes. and informal (Martins, 1993). This reactive and informal approach, however, cannot be seen as exclusive to the Portuguese hotel sector as research has revealed (Olsen et al., 1992, 1994; West and Olsen, 1989). In fact, according to these authors, the identification and analysis of trends in the business environment, which should be used to plan the development of strategies, are most of the times scanned informally. On the other hand, the formalisation of strategies is not a generalised procedure amongst organisations (Mintzberg, 1992, 1994). In reality, as Mintzberg has identified in his International Journal of research, strategies can be formally Contemporary Hospitality Management 12/3 [2000] 156±169 # MCB University Press [ISSN 0959-6119] The current issue and full text archive of this journal is available at http://www.emerald-library.com

Environment scanning, Strategic planning, Hotels, Cognitive mapping

Introduction

developed (intended strategies), or ``incrementally developed in the course of action'' (realized strategies). Based on the importance of trends identification and analysis for strategic planning and decision making, and on the processes of strategy development, this article explores and assesses the relevance and structure of a formal environmental scanning process to be adopted by hotel chains, the barriers to this process and possible actions to overcome them. Despite the fact that previous studies suggested that organisations would benefit from a formal approach to environmental scanning, findings also demonstrate that these activities amongst hospitality organisations are mostly informal in nature (Olsen, 1994). In trying to understand the reasons behind the existing scanning activities and the impact of the strategy-making approach practised by hospitality organisations...
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