Stages of Environmental Analysis

Stages of Environmental Analysis

The environment of an organization consists of it surrounding anything that affects its operation favorably or unfavorably. Organizations environment includes those factors (internal and external) that affect the operations of the business directly or indirectly.

Stages of Environmental Analysis

Analysis of the Environment makes the Business aware of the Threats and Opportunities in the environment.

Then in the light of its Strengths and Weaknesses, the business chalks out courses/courses of actions in order to lessen the impact of Threats and grab the Opportunities.

The environmental analysis included the following stages:

  1. Scanning,
  2. Monitoring,
  3. Forecasting,
  4. Assessing.

Scanning: It is the process of analyzing the environment. Identification of emerging/ensuing trends is a critical purpose of environmental scanning. The main aim of environmental scanning is alerting the organization to potentially significant external impingement before it has fully formed or crystallized. Successful environmental scanning draws attention to possible changes and events before their occurrence, allowing time for suitable action.

Monitoring: It entails perspective follow up and a more in-depth analysis of the relevant environmental trends identified at the scanning stage. The purpose of monitoring is to assemble sufficient data to discern (make out) whether certain patterns are emerging.

The outputs of monitoring are threefold:

  • a specific description of environmental patterns to be forecast;
  • identification of trends for further monitoring;
  • identification of patterns requiring further scanning.

Forecasting: Forecasting is concerned with the development of plausible directions of directions, scope, speed, and intensity of environmental change to layout the evolutionary path of anticipatory change in the environment.

Assessment: Assessment involves drawing up implications/ possible impacts. In an assessment, the frame of reference moves from understanding the environment of the focus of Scanning, Monitoring and Forecasting-to identifying what that understanding of environment means for the organization.

In short, it involves drawing of possible impacts of the environmental changes on the organization.