February 25, 2013
Survival, growth, and profitability guide the strategic direction of almost every business organization (Pearce & Robinson, 2011). Organizations monitor changes occurring in the environment to develop strategies to adapt to the changes. Environmental scanning concentrates on identifying potential advancing changes that could affect the organization. The organization's capability to adapt to environment changes depend on the interpretation of collected facts. Organizations “employ management processes that they feel will position it optimally in its competitive environment by maximizing the anticipation of environmental changes and of unexpected internal and competitive demands” (Pearce & Robinson, 2011, p. 3). Managers need to be aware of the conditions in the environment that influence the organization. The information empowers managers to take advantage of opportunities to gain greater profits and mitigate threats to the organization. Collecting, organizing, and understanding the environmental data consumes large amounts of time and resources. Organizations need to examine what occurs in the environment and compare organizational strengths and weaknesses in relation to it. A company’s opportunity is a risk to another, depending on how the company’s structure handles the specific item. External Environment
“A firm’s external environment consists of all the conditions and forces that affect its strategic options and define its competitive situation” (Pearce & Robinson, 2011, p. 13). The remote, industry, and operating environments form the tiers of an organization’s external environment. One must identify the purpose, participants, and time commitments to conduct an environmental scan. The general environment, specific facts, and actions of competitors, obtained from market research studies, periodicals, demographic figures, and industrial benchmarks provide a source of...