Organisational Environment
2
2.1 The General
Environment
The General Environment
2.2 Scanning,
Monitoring, and
Forecasting Changes in the Environment
Key Work
Strategic decision making under conditions of uncertainty 2.3 Scenario
Planning
Key Work
Strategic
inflection points and their impact on strategy
Tools and
Techniques
Undertaking scenario planning
2.4 PEST
Analysis
2.5 SWOT
Analysis
2.6 The General and the
Competitive
Environments
Tools and
Techniques
Writing a PEST analysis ➜
Main Reference
Schoemaker, P.J.H. (1995).
Scenario planning: a tool for strategic thinking. Sloan Management
Review, 36(2), 25.
Learning Objectives
After completing this chapter you should be able to:
• Define what constitutes the general environment
• Evaluate the role of scanning and monitoring in detecting environmental trends • Apply scenario planning to decision making in uncertain environments
• Evaluate PEST as a framework for analysing the macro-environment
• Explain the use of SWOT analysis
• Evaluate the relationship between the general and the competitive environment 9780199581610_035_063_CH02.indd 36
2/1/11 11:03:51 AM
37
Introduction
2
In the previous chapter we looked at what strategy is and introduced a number of different perspectives on strategy formulation. We addressed the importance of values in determining why an organization exists, and looked at how an organization’s values, its vision, and its mission guide individuals’ behaviour by signposting what is important to the organization. We explained the importance of an organization being willing to change the assumptions that underpin its theory of the business if it is to adapt to changes in its environment. We also introduced a strategic management process which involves strategy analysis, strategy formulation, and strategy implementation.
We noted that this essentially linear approach is useful for exposition but may not
always
2.1 The General
Environment
The General Environment
2.2 Scanning,
Monitoring, and
Forecasting Changes in the Environment
Key Work
Strategic decision making under conditions of uncertainty 2.3 Scenario
Planning
Key Work
Strategic
inflection points and their impact on strategy
Tools and
Techniques
Undertaking scenario planning
2.4 PEST
Analysis
2.5 SWOT
Analysis
2.6 The General and the
Competitive
Environments
Tools and
Techniques
Writing a PEST analysis ➜
Main Reference
Schoemaker, P.J.H. (1995).
Scenario planning: a tool for strategic thinking. Sloan Management
Review, 36(2), 25.
Learning Objectives
After completing this chapter you should be able to:
• Define what constitutes the general environment
• Evaluate the role of scanning and monitoring in detecting environmental trends • Apply scenario planning to decision making in uncertain environments
• Evaluate PEST as a framework for analysing the macro-environment
• Explain the use of SWOT analysis
• Evaluate the relationship between the general and the competitive environment 9780199581610_035_063_CH02.indd 36
2/1/11 11:03:51 AM
37
Introduction
2
In the previous chapter we looked at what strategy is and introduced a number of different perspectives on strategy formulation. We addressed the importance of values in determining why an organization exists, and looked at how an organization’s values, its vision, and its mission guide individuals’ behaviour by signposting what is important to the organization. We explained the importance of an organization being willing to change the assumptions that underpin its theory of the business if it is to adapt to changes in its environment. We also introduced a strategic management process which involves strategy analysis, strategy formulation, and strategy implementation.
We noted that this essentially linear approach is useful for exposition but may not
always
References: Ansoff, H.I. (1984). Implementing Strategic Management. Prentice Hall, Englewood Cliffs, NJ. Drucker, P.F. (1995). Managing in a Time of Great Change. Butterworth Heinemann, Oxford. Fahey, L. and Narayanan, V.K. (1986). Macroenvironmental Analysis for Strategic Management Gertner, R. (2000). Scenario analysis: telling a good story. In Mastering Strategy. Ginter, P. and Duncan, J. (1990). Macroenvironmental analysis for strategic management Gladwell, M. (2000). The Tipping Point: How Little Things Can Make a Big Difference Grove, A.S. (1996) Only the Paranoid Survive. Random House, New York. Kahane, A. (1992). Scenario for energy: sustainable world vs. global mercantilism. Mercer, D. (1998). Marketing Strategy: The Challenge of the External Environment Morgan, G. (1988). Riding the Cutting Edge of Change. Jossey Bass, San Francisco, CA. Porter, M.E. (1985). Competitive Advantage. Free Press, New York. Porter, M.E. and van der Linde, C. (1995). Green and competitive: ending the stalemate Schoemaker, P.J.H. (1995). Scenario planning: a tool for strategic thinking. Time Warner (2006). Corporate Social Responsibility Report. Time Warner, New York. Van der Heijden, K. (1996). Scenarios: The Art of Strategic Conversation.