Academic journal article Akron Business and Economic Review

Insights into the Relationship between Strategic Momentum and Environmental Scanning: An Empirical Analysis

Academic journal article Akron Business and Economic Review

Insights into the Relationship between Strategic Momentum and Environmental Scanning: An Empirical Analysis

Article excerpt

Insights Into The Relationship Between Strategic Momentum And Environmental Scanning: An Empirical Analysis

In today's environment, organizational survival may hinge on the organizations's understanding and application of two notions: environmental scanning and strategic momentum. Environmental scanning is concerned with how the organization searches its environment [2]. Strategic momentum, on the other hand, focuses on how the organization adapts to environmental change[6].

THEORETICAL PERSPECTIVES

Environmental Scanning

Various researchers have described the importance of environmental scanning as follows: decision makers must remain aware of the changes in the organization's external environment[5]; the success of an organization is dependent upon how the organization is aligned with the environment[8]; organizations cannot escape the conditions of their environment[39]. Drucker[11] asserted that the most important events on the outside of a firm are not the trends but rather the changes in the trends. These ultimately determine the success or failure of an organization and its efforts. Snyder[41] argued that the external environment of an organization contains opportunities and threats that have an impact on the success or failure of the organization. These opportunities and threats must be identified before a firm can begin formulating strategy.

Strategic Momentum/Adaption

In the biological sense, a state of adaption describes a state of survival for an organism. Analogously, a state of adaption for a business organization is one in which it improves its potential to survive the conditions of its environment[6, 12] Of course, several strategies may be available to a firm for surviving the conditions of its environment[3, 42]. The organization's assessment of urgency and feasibility act in concert to influence the adaption (strategic momentum)[14]. How an organization reacts is also dependent upon its resources and how it analyzes strategic issues[13].

Relationship Between Environmental Scanning and Strategic Momentum

Two perspectives provide tentative models of the relationship between environmental scanning and strategic momentum. One model suggests that environmental scanning reinforces the tendency of momentum to follow past trends[33]. The other model infers that environmental scanning reverses the direction of momentum[35]. The models are not totally incompatible, however. Miller and Friesen[34] report that strategic momentum is such that organizations tend to keep evolving in the same direction. "Simultaneous continuous changes" occur in many organizational variables and are interrupted by periods of widespread reversal.

Wilson[44] suggests that strategic momentum refers to the level of effort and commitment that top-level decision makers are willing to devote to action designed to resolve an issue. Strategic momentum can be high, which results in radical change. For example, General Motor's recent modifications in organizational design illustrates a radical change[18]. Strategic momentum for change can also be low, where only incremental changes occur[41].

Since Aguilar's[2] conceptualization of environmental scanning, there have been a number of studies on various aspects of environmental scanning. Most have dealt with how the scanning activity is performed[2, 4, 24, 25, 26, 44]. Other research has focused on the relationship between environmental scanning and other variables including hierarchical level, functional area (specialty), and personality dimensions of the executive[20, 21, 27]; environmental complexity and rate of change[23]; evaluation of information sources[10]; and establishing organizational strategy[1, 30]. However, no research was found that specifically established a linkage between strategic momentum and the type and degree of environmental scanning.

Dutton and Duncan[14] suggest strategic momentum is affected by "strategic issues," which would include environmental scanning[28, 29, 37, 40]. …

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