Environment Analysis Process

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Environment Analysis Process

Scanning, Monitoring, forecasting, and assessing are the basic steps in the environmental analysis process.

1. scanning

Environmental scanning is the first step of the environmental analysis process. Scanning is the process by which organizations monitor their relevant environments to identify opportunities and threats affecting their business for the purpose of taking strategic decisions. It involves information gathering for assessing the nature of the environment in terms of uncertainty, complexity, and dynamism.

  • Scanning identifies early signals of environmental changes and detects
  • Scanning detects changes already underway.

2. Monitoring

Monitoring is the second step of the environmental analysis process. It is the process of measuring and assessing workplace conditions to evaluate health risks to workers. In other words, it is the process and activity that needs to take place to monitor the quality of the environment. It involves tracking environmental trends and events. It is the auditing of the environment. The likely impacts of environmental influences on business performance are identified. Environmental monitoring includes periodic health examinations of workers and environmental impact tests. The advantages of environmental monitoring include:

  • prevents occupational diseases,
  • improves the company’s public image, and
  • reduces environmental pollution

3. Forecasting

Another step of the environmental analysis process is forecasting. Environmental forecasting is estimating the intensity, nature, and timing of the external forces that may affect the performance Of a firm, disrupt its plans, or force a change in its strategies. It is a technique whereby managers attempt to predict the future characteristics of the organizational environment and hence make decisions today that will help the firm deal with the environment of tomorrow. Forecasting involves the use of statistical and non-statistical, or qualitative techniques. Techniques such as time series analysis, judgmental forecasting, multiple scenarios, and the Delphi technique are very useful in environmental forecasting. This step forecast what is likely to happen. It lays out the path for anticipated changes. This step provides:

  • key forces at work in the environment, they can be political-legal, economic, socio-cultural, or technological,
  • understanding of the nature of key influences and drivers of change, and
  • projection of future alternative paths available.

4. Assessing

Assessing is the final step of the environmental analysis process. Assessing determines the timing and importance of environmental changes and trends for firms’ strategies and their management. It is the formal process used to predict environmental consequences. The consequences may be positive or negative of a plan, policy, program, or project prior to the decision to move forward with the proposed action. The competitive position of the business is analyzed in terms of how the organization stands in relation to other organizations. It offers the following benefits:

  • It minimizes adverse environmental effects,
  • It increases the protection of human health,
  • It reduces project costs and delays, and
  • It reduces risks of environmental harm or disasters.


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