Environmental Scanning

It has already been discussed that an organizational environment consists of both external and
internal factors. The success of the organisation depends upon these factors. Knowledge of
environmental changes is very helpful in the formulation and implementation of business plans.
A business can obtain this knowledge through environmental scanning. The development and
forecasts of these influencing factors should be scanned by the entities.
Environmental scanning3 is the ongoing tracking of trends and occurrences in an organization’s
internal and external environment that bear on its success, currently and in the future. The results
are extremely useful in shaping goals and strategies.
Environmental scanning can be defined as the process by which organizations monitor their
relevant environment to identify opportunities and threats affecting their business for the purpose
of taking strategic decisions.
In other words, it is the process of gathering information regarding company’s environment,
analysing it and forecasting the impact of all predictable environmental changes. It helps the
managers to decide the future path of the organization.
The following are the factors need to be considered in environmental scanning:

1 Events These are certain happening in the internal or external organisational environment
which can be observed and tracked.
2 Trends Trends are the general tendencies or the courses of action along which events take
place. Trends are grouping of similar or related events that tend to move in a given direction,
increasing or decreasing in strength of frequency of observation; usually suggests a pattern of
change in a particular area.
3 Issues Issues are the current concerns that arise in response to events and trends.
Identifying an emerging issue is more difficult. Emerging issues start with a value shift, or a
change in how an issue is viewed
4 Expectations Expectations are the demands made by interested groups in the light of
their concern for issues
Importance:

Environmental scanning is the process by which organizations monitor their relevant

environment to identify opportunities and threats affecting their business.
With the help of environmental scanning, an enterprise can consider the impact of different
events, trends, issues and expectations on its business operations.
Firms which systematically analyse and diagnose the environment are more effective than those
which do not. For example, some Indian firms suffered considerably because they failed to
appreciate the tightening regulations against environmental pollution