O R G A N I Z AT I O N

A N D
M A N A G E M E N T
Q1W3
Environmen
tal Scanning
• Environmental Scanning is the gathering of information from an organizations
internal and external environment, and careful monitoring of these environments to
identify future threats and opportunities.
•Environmental Scanning is monitoring and interpreting sweep of social, political,
economic, ecological, and technological events to spot budding trends that could
eventually impact industry.
•According to Stephen P. Robbins & Mary Coulter, “Environment refers to
institutions and forces that affect organizational performance.”
•Components of Environmental Scanning
1. The development of a competitive mindset
2. Considering of future business scenarios
3. Business prediction/forecasting
4. Benchmarking is the process of measuring or comparing one’s own products
services and practices with those of the recognized industry leaders in order to
identify areas for improvement.
• Competitive Environment- refers to specific groups of people with which
the company/firm interacts. Before scanning the environment, an
organization must take the following important factors into consideration:
Events – These are specific occurrences which take place in different
environmental sectors of a business. These are important for the functioning
and/or success of the business. Events can occur either in the internal or the
external environment.
Trends – are general courses of action or tendencies along which the events
occur. They are groups of similar or related events which tend to move in a
specific direction. Further, trends can be positive or negative.
Issues – Organizations try to identify emerging matters so that they can take
corrective measures to grab them in the bud.
Expectations – Some interested groups have demands based on their
concern for issues. These demands are Expectations.
Industry Forces
• Porter's Five Forces is a business analysis model that helps
to explain why various industries are able to sustain different
levels of profitability. The model was published in Michael E.
Porter. The five forces are frequently used to measure
competition intensity, attractiveness, and profitability of
an industry or market.
• a. Threat of New Entrants
• b. Buyer Power
• c. Supplier Power
• d. Threat of Substitute Products
 •The industry environment is considered as the firm’s
immediate environment. It comprises of the customers, the
competitors and the suppliers.
1.Customers - the firm must consider who the customers are,
what are their buying preferences and habit are and where
they are located.
2.Competitors - the firm should consider what structure of
industry they are into monopoly, oligopoly and pure
competition.
3.Suppliers - the firm should consider what is their
relationship to suppliers.
The internal environment offers strengths and weaknesses to business while
the external environment brings opportunities and threats. The four
influencing environmental factors known
as SWOT Analysis are:
Positive Negative
Strength Weaknesses
Internal

 Experience and knowledge  Leadership inadequacy

 Competence and capabilities  Gap in skills and knowledge
 Quality and reputation  Low morale among team members

Opportunities Threats
 Innovation and technology  Loss of major customers
development  Strong competition, competitive pricing
 Diversify the business  Loss of alliance and partners
External

 Market demand  Economic condition

 Loss of key staff
PEST ANALYSIS - a measurement tool which is used to assess
markets for a particular product or a business at a given time frame.
These can influence marketing and relationships that a company has
worked hard to develop. Knowing ahead of time that a change may
be occurring will help in making better business decisions.

P Political  Market regulations

Factors  Taxation
 Governmental decisions
 Consumer protection
E Economic  Exchange rate
Factors  Unemployment rate
 Consumers rate
S Social  Number of older people increases
Factors  Illiteracy rate
T Technological  Lower energy costs
Factors  Easier access to internet
 Mobile technology increasing