Uncertainty And Environmental Scanning

Environmental Scanning

Environmental scanning is the “activity of acquiring information” (Aguilar, 1967, p. 1)

and “involves simply an exposure to and perception of information” (Aguilar, 1967,

p. 18, emphasis in original). In the scanning and interpretation of environmental change process, it is clearly vital to organizational performance and feasibility. These processes constitute the perception and action, allowing an organization to adapt to the environment of the first chain ring (Hambrick, 1981). The external information they provide decision-makers in strategy formulation and implementation of the use (Rhyne, 1985). Organizations scan the environment, to understand the changing external forces, and enable them to develop effective responses, safety, or improve their performance in the future. They scan in order to avoid accidents, identify threats and opportunities, gain competitive advantage and improve long-term and short-term planning (Sutton, 1988). In a way, an organization's ability to adapt to its external environment, understanding and interpretation of dependence on external changes are taking place; environmental scanning constitutes the main form of organizational learning.

Scanning and performance

Does environmental scanning improve organizational performance? Some studies have shown that this is the case. Miller and Friesen (1977) analysis of 81 successful and failed businesses, and classification in accordance with 10 prototypes - successful and unsuccessful companies is 6:4. The study found that intellectual rational factors, including environmental scanning, control, communication, adaptability, analysis, integration, multiplexed, and industry experience, is by far the most important factor in the successful separation of unsuccessful companies, more than half of the variance of the observations in accounting of environmental scanning and intelligence activities, but in all, one of the successes of the prototype was considered to be ‘significant' or ‘consensus' in the failure of corporate intelligence work has been described as poor‘ and 'weak. Miller and Friesen observed that:' There is a particularly noteworthy. That is the highest intelligence / rationality score of the failure is below the minimum intelligence / rationality score of successful prototypes (Miller and Friesen 1977:269)'.

Environmental Uncertainty

The most commonly cited definitions, the definition of environmental uncertainty, as it is a perceptual phenomenon, but the diversion when it comes to specifying what is an experienced nature of the uncertainty. The three most commonly used definitions by the organization theorists are:

  1. The possibility of cannot specify the probability of future events (Duncan, 1972; Pennings, 1981; Pennings & Tripathi, 1978; Pieffer & Salanclk, 1978);
  2. Causal relationship lead by lack of information (Duncan, 1972; Lawrence & Lorsch, 1967);
  3. The possibility of cannot predict the outcome of the decision might be (Downey & Slocum, 1975; Duncan, 1972; Hickson, Hinings, Lee, Schneck & Pennings, 1971; Schmidt & Cummings, 1976).

The term “uncertainty” when attached to the “environmental”, suggested that some of sources of uncertainty are the organization's external environment. Thus, in some places cannot be predicted under the organizational environment.

In our presentation we suggested that not only it is important to understanding the specific sources of environment uncertainty but also it is important to understand the type of environment uncertainty by the decision maker's experiences.

When the external environment is seen as unpredictable, so that the administrator experiences a lot of uncertainty both in procedure and content, an organization's strategic planning may be affected. The strategic planning process may be affected in two ways. It is likely to be the administrators who are clearly about their environment state will take less time in environmental scanning than the administrators who are not confident about their environment. Scanning action is a clear direction to the efforts of sorted a variety of events or the probability of understanding in environmental change of the administrators. In addition, it seems that there are possible models, such as “muddled along in their strategic thinking”(Lindblom, 1959) and the so-called trash in decision-making method (Cohen, March & Oslen, 1972) will be more common when the administrators has a large amount of state uncertainty. An organization's strategic choice and the content may be subject to the amount of uncertainty. In the view of the background of the environment is not well understood and the strategic choice of a reasonable evaluation capacity is limited, state uncertainty may be designed to protect the main functions of the organization in some common strategies.

It is important to recognize the possibility of the administrator may encounter several different types of uncertainty, because they are trying to understand and respond to events, or changes in the environment in the organization. In addition, it is likely these different types of uncertainty may give rise to different types of coping responses.

Conclusions

According to our presentation research, we know there are several types of uncertainty which administrators experience in the course and trying to interpret and some suggestions were made. First:

What is the meaning of these best practices, environmental scanning and to control the balance between creativity, centralization and decentralization, focus and explore the tensions. While the scan is a formal, planned activities, it should also provide space and freedom to participate in the assumptions challenges and creating a new interpretation. While the scanning process is a focused, coordinated, it is also a distributed activity of many groups and individuals to collect and share information.

While scanning the organization's information needs and focus should also provide peripheral vision and organizational development vision. In the end, scanning as the support of organizational learning to find the information will always be how much art rather than science.

Top managers cannot take effective action to influence the organizational processes and outcomes until they form proper judgments.

  • about the levels of key variables inside and outside
  • about these variables as well as with the causal relationship between corporate performance

In order to develop these decisions, managers must first give priority to the external and internal areas get their attention, then the collection and interpretation of the most critical data. Scanning is therefore is the first step to meet the chain of activities in the organization and leadership.

Reference

  1. Detelin S. Elenkov (Strategic Management Jounal, Vol. 18:4, 287-302, 1997)
  2. Chun Wei Choo (Environmental scanning as information seeking and organizational learning, Vol.7 No.1, 2001)
  3. Miller, Danny, & Friesen, Peter H. (1977). Strategy-making in context: ten empirical archetypes. Journal of Management Studies, 14 (3) 253-280.
  4. Organizational Decision Making Behavior under Varying Conditions of Uncertainty, David W. Conrath ?Management Science, Vol. 13, No. 8, Series B, Managerial (Apr., 1967), pp. B487-B500 http://www.jstor.org/stable/2627673
  5. Three Types of Perceived Uncertainty about the Environment: State, Effect, and Response Uncertainty, Frances J. Milliken
  6. The Academy of Management Review, Vol. 12, No. 1 (Jan., 1987), pp. 133-143
  7. Chun Wei Choo, The Art of Scanning the Environment, /vol 25, No.3, 1999
  8. Duncan, R. B. (1972) Characteristics of organizational environments and perceived environmental uncertainty. Administrative Science Quarterly, 17, 313-327.
  9. Pennings, J. M., & Tripathi, R. C. (1978) The organization-environment relationship: Dimensional versus typological viewpoints. In L. Karpik (Ed.), Organization and environ-ment (pp. 171-195). Beverly Hills, CA: Sage.
  10. Article: Hough J R, Scanning actions and environmental dynamism, Gathering information for strategic decision.

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