Appraising an organisation’s environment

Introduction

The main aim of this paper is to present a proposal on the environmental scanning in the strategic management context. This proposal will demonstrate the main aims and objectives along with the background of the chosen organizationIt will further propose the rationale for the environmental scanning technique. The methodology section will explore the main tools, which will aid in the collection of the necessary data.

Background

It is proposed to analyse the charitable organization, which is based at Nottingham University, namely NUSA (Nottingham University Samworth Academy). This organization specializes in fundraising on the global scale (NUSA Official Website, 2012). The main unique selling point is attributed to the fact that this organization acknowledges the great power of social media and technology. This implies that the fundraising activities are maintained by means of social and interactive promotions. Additionally, this organization is using for – profit approach, which suggests that the fundraising activities generate revenue for NUSA (NUSA Official Website, 2012).

Aim and Objectives

The aim is identified in order to provide the guidelines for the research proposal (Saunders et al., 2009).

The main aim of this proposal is to explore the benefits and disadvantages of the key environmental scanning techniques in the strategic management context. The smaller objectives include:

To contrast and compare the environmental scanning techniques
To identify the main environmental scanning technique that would be beneficial in the context of strategic planning and management
To evaluate long term implications of the chosen environmental scanning technique
Rationale

There are different techniques available for environmental scanning. Environmental scanning is regarded to be the most important task prior to strategic planning and management. The chosen environmental scanning model for the purposes of this research , is based on the adherence to the main objectives related to environment evaluation. These objectives include the identification of the activities, the evaluation of the processes, the analysis of the information sharing process and investigation of information produced.

As a result, the environmental scanning model is based on implementation of PESTEL analysis, Porter’s Five Forces Analysis, Internal Analysis and Consumers (refer to the below demonstrated model).

This process is based on the utilization of both macro – and micro-environmental evaluations, namely PESTEL and SWOT analysis. PESTEL analysis is designed in order to identify the main external forces that may emerge and thus impact the organization (Johnson and Scholes, 2009). These forces, namely in the political, economic, social, technological, environmental and legal domains, are uncontrollable (Johnson and Scholes, 2009). Therefore, these have to be identified in order to be able to respond to their emergence from a strategic perspective. SWOT is a micro-level analysis, which serves as a foundation for identification of the future opportunities and threats for the company (Ip and Koo, 2004). Opportunistic matrix identifies the main activities that may be performed in relation to the identified findings in terms of the possible response (Ip and Koo, 2004).

Porter’s Five Forces, is the key framework, which is utilized in order to identify the competitiveness of the organization within the industry. This is established with the help of the analysis of the influences of the main competitive forces, namely the power of buyers, the power of suppliers, threat of substitutes, threat of new entrants and the degree of rivalry (Porter, 1985). The findings demonstrate the industry’s forces that are perceived to be weak therefore may be taken advantage of in the strategic context.

Finally, the last stage of the environmental analysis aims to investigate the consumer behaviour and the key consumer trends. It is specifically focused on the identification of the patterns of consumer behaviour and consumer needs. It is maintained in order to apply the strategies that would affect the increase of customer satisfaction and further expansion of the target audience (Kotler and Armstrong, 2010).

The information sharing process is based on the implementation of the top down sharing approach. This implies that the information is transferred from the managerial levels to business and functional levels (Anderson, 2007). This enables quick ad facilitated information processing from the decision makers to the members of a functional level.

Criticism of a Chosen Technique

Despite the effectiveness and scope of the chosen technique, it is still subject to a certain degree of criticism. This implies that this framework does not incorporate the evaluation of the social impacts, which would be suitable, given the nature of the fundraising business (Becker, 2001). A PESTEL analysis mentions social impacts, whereas Opportunistic matrix involves evaluation of the societal forces (Correia and Wilson, 2001).

On the other hand, this environmental scanning framework allows us to evaluate the company from the organization’s, industry’s and consumer perspectives, which adds the depth to the possible findings. Other than that, this model aims to identify the key trends that may emerge. As the result, based on the identified findings, the organization may plan future strategies that would aid in response to the possible trends.

Even though, a PESTEL analysis tends to incorporate the risk analysis, much more advanced and in-depth risk evaluation might have been performed by IRGC (Model of Risk Governance) (Petts, 2008). However, given the scope of the framework and actual business, this analysis might have been perceived as too specialized.

Porter’s Five Forces, is a beneficial model for industry’s investigation. However, it has been developed in relation to the idea that contemporary market is perfect. This is not true, therefore this framework fails to address some issues that would be applicable to the imperfect market.

Methodology

It is recommended to perform the analysis on the basis of integration of the secondary research. The main sources will be acquired from the academic and professional books and journals, databases , reports and news reports. The secondary research is regarded to be limited, since the material for it is collected and analysed at east 1-2 years prior to publication. Therefore, the sources may be regarded as obsolete and outdated (Saunders et al., 2009).

Conclusion

This paper, designed in the format of a proposal, has been produced in order to identify and evaluate the best environmental scanning model in the context of strategic management. The paper demonstrates the most suitable environmental scanning technique for the charitable organization, namely NUSA. This organization specializes in fundraising and is based at Nottingham University. The environmental scanning model consists of four main stages, namely PESTEL analysis, Porter’s Five Forces, SWOT analysis and Consumer Evaluation. This analysis is regarded to be multidimensional thus adding depth to the evaluation. Despite it being a quite effective framework, it still has attracted some criticism. This implies that there is lack of evaluation from the social perspective, given the nature of the fundraising business. Furthermore, larger focus should have been applied to the possible risks examination. Other than that, this framework proves to be beneficial and effective from the strategic perspective.

References

Anderson, (2007), “Social networks and the cognitive motivation to realize network opportunities: a study of managers’ information gathering behaviours”, Journal of Organizational Behaviour, Vol.29,Iss.1, pp.51-78

Becker H. (2001), “Social Impact Assessment”, European Journal of Operational Research, Vol.16, Iss.2, 311-321

Correia, Z. and Wilson, T.D. (2001), “Factors in?uencing environmental scanning in the organizational context”, Information Research, Vol. 7, Iss. 1, – Available at http://InformationR.net/ir/7-1/paper121.html, (Accessed on 21st November, 2012)

Ip, Y.K. and Koo, L.C. (2004), “BSQ strategic formulation framework: a hybrid of balanced scorecard, SWOT analysis and quality function deployment”, Managerial Auditing Journal, Vol. 19, pp. 533–543.

Johnson, G., Scholes, K. and Whittington, R., (2009), Fundamentals of Strategy, p.102, London: Prentice Hall

Kotler P., Armstrong G., (2010), Principles of Marketing, 13th ed., Pearson: USA

NUSA Official Website (2012), “NUSA’s Mamelodi Fundraising Page”, Available: http://www.justgiving.com/NUSAMamelodiFundraising/ (Accessed on 2ast November 2012)

Petts J., (2008), “Public engagement to build trust: false hopes?” , Journal of Risk Research, Vol.11, Iss.6, 811-832

Porter, M.E., (1985), Competitive Advantage, Free Press: New York

Saunders, M.N.K., Lewis, P., and Thornhill, A. (2009), Research Methods for Business Students, 5th ed., Prentice Hall: UK