Professional Documents
Culture Documents
Environment
Knowledge advances by
steps, and not by leaps.
Lord Maculay
Purpose of Business
Scanning
It involves surveillance of all environmental factors and their
interactions in order to:
• Identify early signals of possible environmental
change
• Detect environmental change already underway
Monitoring
It involves tracking the environmental trends, sequences of
events, or streams of activities. It frequently involves
following signals or indicators unearthed during environmental
scanning.
Environmental analysis process
Forecasting
Strategic decision-making requires a future orientation.
Forecasting is an essential element in environmental analysis.
Forecasting is concerned with developing plausible projections
of the direction, scope, and intensity of environmental change.
Assessment
In assessment, the frame of reference moves from
understanding the environment- the focus of scanning,
monitoring and forecasting – to identify what the
understanding means for the organization. Assessment, tries
to answer questions such as what are the key issues
presented by the environment, and what are the implications
of such issues for the organization.
Importance of Environmental Analysis
Since 1991, the country has moved into an era of liberalization and
one of the victims of the market-based economy is transparent and
fair business practice. Several instances of mismanagement have
been alleged, with some well-known and senior executive being
hauled up for non-performance and /or non-compliance with legal
requirements.
With foreign investors driving the market and domestic investors also
becoming aware, both are demanding in their approach towards the
companies in which they have invested their funds. They seek
information and want to influence decisions.
It is better to prevent social problems through business involvement than to cure them.
Arguments against social responsibility
• Shareholders
• Employees
• Customers
• Creditors, suppliers and others
• Society at large
and
• Government
Social Responsiveness
Moral management
Amoral management
Immoral management
The management has credibility with its employees precisely because it has
credibility with the public.
Value driven companies are sure to be successful in the long run, though in
the short run, they may lose money.
Tell the Truth: To build and maintain long-term, trusting and win-win
relationships with relevant stockholders.
Adhere to the golden rule: “Do unto others as you would have others do unto
you”
Individuals and households put their resources (land, labor, capital and
skill) to one or more of their alternative uses and make their living
Private gains are the main motivating and guiding force for
carrying out economic activities
Free Enterprise Economy