Environmental Scanning

ENVIRONMENTAL SCANNING
.
What is an Organization?
• A consciously coordinated social unit,
composed of two or more people, that
functions on a relatively continuous basis to
achieve a common goal or set of goals
The Layers of OB
The Organization
Change
Organizational culture
Decision making
The Group Leadership
Power and politics

Negotiation
Conflict
Communication
The Individual Groups and teams
Motivating self and others

Emotions
Values and attitudes
Perception
Personality
Challenges Facing the Workplace
Organizational Level
• Productivity
• Developing effective employees
• Global competition
• Managing in the global village
Group Level
• Working with others
• Workforce diversity Workplace
Individual Level
• Job satisfaction
• Empowerment
• Behaving ethically
Open-System Model of a
Business
Environment
Environment
Environment Environment
DEFINITION
• Environmental scanning is a process of gathering, analyzing, and dispensing

information for tactical or strategic purposes.
• Careful monitoring of an organization's internal and external environments for

detecting early signs of opportunities and threats that
may influence its current and future plans. In comparison, surveillance is confined
to a specific objective or a narrow sector.
• It is monitoring and interpreting sweep of social, political, economic, ecological,

and technological events to spot budding trends that could eventually impact
industry
PURPOSE OF ENVIRONMENTAL SCANNING
• Effective utilisation of resources

• Constant monitoring of resources
• Strategy formulation
• Identification of threats and opportunities
• Useful for the managers
• Prediction of future
FACTORS TO BE CONSIDERED FOR
ENVIRONMENTAL SCANNING
Events
External Expectatio
Trends environment of ns of
business people
Issues
APPROACHES TO ENVIRONMENTAL
SCANNING
• SYSTEMATIC APPROACH
 information for environmental scanning collected systematically
 Information pertaining to business and industry could be collected
continuously to monitor changes
 Continuous updating necessary not only for strategic management but also for
operational activities
 In this approach information is collected relating to mkt customers,changes in
legislation govt. policy have a direct impact on organisation.
 ADHOC APPROACH
 Organisations conduct special surveys and studies to undertake special
projects, evaluate existing strategies or devise new strategies
 Changes and unforeseen developments may also be investigated
 PROCESSED FORM APPROACH
 Information used is supplied by govt agencies or private instituitions
 Secondary data available from external and internal sources may also be used
FACTORS AFFECTING ENVIRONMENTAL
APPRAISAL
 Factors relating to nature of  Factors relating to the
environment Strategies
• Complexity • This is master level stretgy:- corporate
• Flexibility level strategy to achieve corporate
• Hostility objective.
• Diversity • Sub level strategy:-for specific purpose
 Factors relating to the organisation and to help master stretgy.
• Nature of the business • Functional level strategy:-how the
• Age of the organisation stretgy is translated into functions like
• Size of the organisation marketing,finance, production and R
• Nature of the markets AND D.
• Nature of the products
 Factors relating to strategists:
• Age , education and experience
• Motivational level
• Ability to withstand pressure and strain
• Interpersonal relations
STRUCTURING THE ENVIRONMENTAL APPRAISAL
• Two most important techniques of

environmental appraisal are:
ETOP(environmental threats and
opportunities) Analysis
SWOT(strengths, weaknesses, opportunities
and threats) analysis
ETOP
Steps involved in the preparation of ETOP:
 Dividing the environment into different sectors
 Analysing the impact of each sector on the organisation
 Subdividing each environmental factor into sub factors for a
comprehensive ETOP
 Analysing the impact of each subfactor on the organisation in
the form of a statement
 Preparing a summary to show the major factors for the sake
of simplicity
Importance of ETOP
• Provides a clear picture to the strategists of
the sectors and the different factors in those
sectors
• Helps the organisation in knowing where it
stands with respect to its environment
• Helps the organisation in formulating
appropriate strategy to take advantage of the
opportunities and threats in its business
SWOT Analysis
• SWOT stands for Strengths, Weaknesses,
Opportunities and Threats
 Identification of the threats and opportunities in the

external environment and strengths and weaknesses
in the internal environment of the firms are the
cornerstone of business policy formulation.
 It is the SWOT analysis which determines the course
of action to ensure the growth / survival of the firm.
Strengths
Strengths—internal to the unit; are a unit’s resources and capabilities that can be
used as a basis for developing a competitive advantage; strength should be
realistic and not modest.
The list of strengths should be able to answer:
• What are the unit’s advantages?
• What does the unit do well?
• What relevant resources do you have access to?
• What do other people see as your strengths?
• What would you want to boast about to someone who knows nothing about this
organization and its work?
• Examples: good reputation among customers, resources, assets, people, :

experience, knowledge, data, capabilities
• Think in terms of: capabilities; competitive advantages; resources, assets, people
• (experience, knowledge); marketing; quality; location; accreditations
• qualifications, certifications; processes/systems
Weaknesses
Weaknesses—internal force that could serve as a barrier to maintain or achieve a

competitive advantage; a limitation, fault or defect of the unit;
It should be truthful so that they may be overcome as quickly as possible
The list of weaknesses should be able to answer:

• What can be improved?
• What is done poorly?
• What should be avoided?
• What are you doing as an organization that you feel could be done more
effectively/efficiently?
• What is this organization NOT doing that you feel it should be doing?
• If you could change one thing that would help this department function more effectively,
what would you change?
• Examples: gaps in capabilities, financial, deadlines, morale

• lack of competitive
Opportunities
Opportunities—any favorable situation present now or in

the future in the external environment.
• Examples: unfulfilled customer need, arrival of new

technologies, loosening of regulations, global influences,
economic boom, demographic shift
• Where are the good opportunities facing you?

• What are the interesting trends you are aware of?
• Think of: market developments; competitor; vulnerabilities;
industry/ lifestyle trends;; geographical; partnerships
Threats
External force that could inhibit the maintenance or attainment of a

competitive advantage; any unfavorable situation in the external environment
that is potentially damaging now or in the future.
• Examples: shifts in consumer tastes, new regulations, political or legislative

effects, environmental effects, new technology, loss of key staff, economic
downturn, demographic shifts, competitor intent; market demands; sustaining
internal capability; insurmountable weaknesses; financial backing
• The list of threats should be able to answer:

• What obstacles do you face?
• What is your competition doing?
• Are the required specifications for your job/services changing?
• Is changing technology threatening your position?
• Do you have financial problems?
• Could any of your weaknesses seriously threaten your unit?
Exercise
• Think of your Branch as an Organisation.
• Identify different factors in environment which
influences your working.
• Identify Environmental Threats & Opportunities
• Do a SWOT Analysis and devise strategies to
maximise output
• As Branches are different, this will be an
individual exercise. However you are free to
discuss in dyads or triads.
• There will be a few presentations.
•THANK YOU

Environmental Scanning

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ENVIRONMENTAL SCANNING

Power and politics

Motivating self and others

• Environmental scanning is a process of gathering, analyzing, and dispensing

• Careful monitoring of an organization's internal and external environments for

• It is monitoring and interpreting sweep of social, political, economic, ecological,

• Effective utilisation of resources

• Two most important techniques of

 Identification of the threats and opportunities in the

• Examples: good reputation among customers, resources, assets, people, :

Weaknesses—internal force that could serve as a barrier to maintain or achieve a

The list of weaknesses should be able to answer:

• Examples: gaps in capabilities, financial, deadlines, morale

Opportunities—any favorable situation present now or in

• Examples: unfulfilled customer need, arrival of new

• Where are the good opportunities facing you?

External force that could inhibit the maintenance or attainment of a

• Examples: shifts in consumer tastes, new regulations, political or legislative

• The list of threats should be able to answer:

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