Marketing: Decision Making and Formal Scanning Process Essay Sample
Get Full Essay
Get access to this section to get all help you need with your essay and educational issues.Get Access
Marketing: Decision Making and Formal Scanning Process Essay Sample
The development of the hotel sector in Portugal has been scarcely documented with Abstract little literature published, and that which is Investigates the environmental available, mostly reporting on the occupancy scanning activities of hotel chains rates and revenues of hotels in the country. operating in Portugal. Attitudes More recently, however, due to the towards environmental scanning by companies where strategy was increasing competition of other tourist formalised through a formal writdestinations and the bargaining power of ten strategic plan (Intenders) and tour operators, Portuguese hoteliers became those companies where strategy aware of the need to take a more rigorous was informally developed through a “vision” or “informal plan” managerial approach to their business (Realizers) were compared. Face (Cavaco, 1993). This, coupled with an to face interviews were conducted awareness campaign developed by the with board level executives to government and supported by European identify and assess the relevance of a formal environmental scanfunds, led to the identification of the main ning process, the characteristics challenges facing the Portuguese hotel sector: of such a process, barriers to its to improve quality, product and market development and ways to overdiversification; to increase productivity and come them.
A cognitive mapping technique was used in the analysis reduce costs; to define specific marketing of respondents’ perceptions topolicies and to improve management wards the development of such a structures (Relvas, 1993; Martins, 1993). process, with the maps showing These challenges contributed to an more similarities than differences between the comparison groups, additional pressure on hoteliers to re-think thus highlighting the importance their approach to strategy development of this process for both intenders which traditionally had been highly reactive and realizes. and informal (Martins, 1993). This reactive and informal approach, however, cannot be seen as exclusive to the Portuguese hotel sector as research has revealed (Olsen et al., 1992, 1994; West and Olsen, 1989). In fact, according to these authors, the identification and analysis of trends in the business environment, which should be used to plan the development of strategies, are most of the times scanned informally. On the other hand, the formalisation of strategies is not a generalised procedure amongst organisations (Mintzberg, 1992, 1994). In reality, as Mintzberg has identified in his International Journal of research, strategies can be formally Contemporary Hospitality Management 12/3  156±169 # MCB University Press [ISSN 0959-6119]
The current issue and full text archive of this journal is available at developed (intended strategies), or “incrementally developed in the course of action” (realized strategies). Based on the importance of trends identification and analysis for strategic planning and decision making, and on the processes of strategy development, this article explores and assesses the relevance and structure of a formal environmental scanning process to be adopted by hotel chains, the barriers to this process and possible actions to overcome them. Despite the fact that previous studies suggested that organisations would benefit from a formal approach to environmental scanning, findings also demonstrate that these activities amongst hospitality organisations are mostly informal in nature (Olsen, 1994).
In trying to understand the reasons behind the existing scanning activities and the impact of the strategy-making approach practised by hospitality organisations (intended or realized), respondents’ views on the characteristics of an ideal formal environmental scanning process, its relevance, possible barriers to such process and solutions to overcome them were researched and analysed. The data were analysed using a cognitive mapping approach to display and explore existing situations and ideal solutions according to their perspectives. As the core contribution of this analysis a series of output propositions were developed and used to support a descriptive model of a formal environmental scanning process.
Strategic planning and environmental scanning
There is no generally accepted definition of strategic planning and different authors use different terms to define the same concept (Stoner and Freeman, 1986). In defining strategic planning as “the development of long range plans for the effective
Jorge Costa and Richard Teare Developing an environmental scanning process in the hotel sector management of environmental opportunities and threats in the light of corporate strengths and weaknesses”, Wheelen and Hunger (1989, p. 14) address basically the same aspects as other authors, whilst at the same time providing a good illustration of its process and content. According to Mintzberg (1992), the development of strategies is not always carried out in such a formal way. In fact, as he argues, there are organisations where strategies are not deliberate but emergent. This “realized” approach to strategy development, as Mintzberg calls it, is likely to result in different attitudes towards the management of environmental opportunities as proposed by Wheelen and Hunger. In addition to consider strategic planning activities, the emergent approach to strategy also requires clarification namely in respect of how an organisation’s objectives are formally defined and strategies developed.
This is also one of the limitations identified by West (1988) in his study of the relationships between strategy, environmental scanning and performance. The identification and management of environmental opportunities, however, is seen as fundamental to the competitive positioning of companies (Fahey and King, 1977; Segev, 1977; Kefalas and Schoderbeck, 1973). This identification of business environmental trends can be achieved using environmental scanning, which is seen by Aguilar (1967) as a way to examine information about events and relationships in a company’s outside environment. This information can then be used to assist top management in its task of charting the company’s future course of action (Hambrick, 1982). The importance of environmental scanning for organisations can be seen by looking at some of its potential outcomes: identification of events and trends in the external environment; to make sense of the possible relationships between them; to support organisational development and design; and to provide an agenda for executive boards and management education (Fahey and Narayanan, 1986; Terry, 1977).
By making sense of the data, organisations can extract the main implications for decision making and strategy development (Daft et al., 1988; Lenz and Engledow, 1986; Stubbart, 1982). However, and despite the fact that it is an established activity with well-defined elements, environmental scanning is not regularly used by business organisations (West and Olsen, 1989; Jain, 1984). Empirical research also demonstrates that for environmental scanning to succeed it has to be linked to the formal planning process (Engledow and Lenz, 1989; Jain, 1984; Fahey and King, 1977). From this perspective, environmental scanning fits perfectly into the planning process of the organisation (intended strategy).
However, in organisations where strategies result from consistency in behaviour (realized strategy), the design of environmental scanning activities for strategic decision making will have to follow a different process. Even though organisations regard environmental information as highly relevant for strategic planning the majority still perceive themselves as basically involved in relating environmental phenomena to short-term choices (Fahey and King, 1977). In this respect, Mintzberg (1994) argues that there are organisations where strategies are not made explicit or simply do not exist formally. As this author supports, strategies cannot be purely deliberate and a few can be purely emergent. In the light of this argument, the most logical behaviour for an organisation would be to develop some sort of formal planning process. However, considering that organisations will not formalise their strategies just to justify the creation of a scanning activity, the justification will have to originate from managers who must realise the importance of scanning the business environment for better decision making and planning, no matter what kind.
In relation to the hospitality industry, Olsen et al. (1992) argue that environmental scanning helps managers to foresee favourable and unfavourable influences and initiate strategies which will enable their organisations to adapt to the environment. Despite prior empirical work and recommendations that companies should undertake environmental scanning activities, research shows a different reality (Olsen et al., 1994). In fact, according to Olsen et al., hospitality organisations are aware of the need to relate environmental information to long-range plans, but so far the majority are just relating this information to short term decisions. Research into the environmental scanning process has also discovered that much of the scanning activity of managers is informal in nature (Fahey et al., 1983). Managers are too concerned with the short term, and for this reason, their main goal is to get information about the economy, financing and customer needs and wants, and ignoring other sectors of the general environment (Olsen et al., 1994).
There are many structural and psychological reasons why this happens. Some of the reasons supporting an informal environmental scanning process are the lack of good, reliable information, and the fact that scanning is expensive when engaged in at the highest levels of the firm (West and Olsen, 1989). Another major reason is that any attempt to monitor both the general and task environments comprehensively is beyond the resources and abilities of all firms. To overcome these situations, Aaker (1983) proposes a more structured approach to environmental scanning based on internal resources and concentrating on the storage, processing and dissemination of information as ways to improve the scanning process. As further emphasised by Olsen et al. (1992, p. 58), for hospitality managers formal environmental scanning is seen as “F F F time taken away from more tangible pursuits”, and, on the other hand, “active problem solving is much more rewarding to managers than time spent in such `soft’ activities as scanning”.
These statements reflect other deeply ingrained reasons for the lack of commitment towards the scanning process. According to the same authors, another problem affecting formalised environmental scanning is that much of the information processed by the manager during scanning is difficult to evaluate quantitatively “making assessment of its impact upon the firm more of a guessing game than a formal strategic exercise”. The evidence provided (see for example: Olsen et al., 1992, 1994; West and Olsen, 1989) reveals that, besides the scarcity of reliable information and the constraints on resources, something more complex is affecting the development of scanning activities in organisations.
The lack of a longterm perspective coupled with a commitment to immediate tangible pursuits, and a strong reliance on quantitative data are deep reflexes of the existing organisational culture amongst hospitality organisations. Perhaps the existing culture rather than the link to the strategic planning process is what makes the difference in the successful implementation of environmental scanning activities. It is clear that the malfunctions of the process are due to a lack of commitment by the organisations to continuously assess their environment in search for other events and trends than just mere statistical information. Having identified the main constraints affecting the development and adoption of a formal environmental scanning process, Olsen et al. do not go as far as to look for managers’ views on how this formal process could be designed.
The reasons given by managers for not undertaking environmental scanning may be seen as the major barriers to a formal environmental scanning process. In order to overcome these barriers it seems relevant to know how the scanning task should be organised to make it relevant and usable by managers. To address these limitations and to look for answers to those aspects not yet covered by past research whilst taking into account the challenges facing the Portuguese hotel sector, the following research aim was defined: to explore and assess the relevance and structure of a formal environmental scanning process to be adopted by hotel chains as well as the barriers to this process and possible actions to overcome them. By understanding how “intenders” and “realizers” regard the relevance of a formal environmental scanning process, how it should be organised, the barriers facing this process as well as the possible actions to overcome them, it will be possible to devise a process which matches the relevance of the information with the needs of hospitality managers.
The sample was composed of 11 chains, of which nine were Portuguese and two Portuguese-foreign owned (mixed ownership). The 11 chains in the sample owned and/or managed 49 units in Portugal. The majority of the units were owner managed (41 units), and eight units were under management contracts. The number of units per chain varied from two (minimum) to eight (maximum), the average being four units per chain. The classification of the units ranged from three to five stars according to the Portuguese Tourism Board standards. Despite the small size of the sample it represented almost half of the population (30 chains in total) and the chains composing it reflected the characteristics of the hotel chains operating in Portugal be it in terms of ownership, segment of operation, size or geographical location. The sample also included all those chains willing to participate in the research. The data were collected through face-to-face interviews with board level executives supported by a semi-structured questionnaire composed of open-ended questions and developed based on an extensive review of the literature on environmental scanning and strategic planning.
Data were analysed using two comparison groups based on the typology developed by Mintzberg (1992): “intenders” ± those chains which had a formal written strategic plan; and “realizers” ± those chains which did not have a formal written strategic plan. These comparison groups used to compare the categories and properties of the field data were adopted because it was apparent that they had the potential to provide effective comparison measures. Data were analysed using a cognitive mapping technique which allows the production of cognitive maps, defined by Fiol and Huff (1992, p. 267) as “graphic representations that locate people in relation to their information environments”. According to these authors, maps also provide a frame of reference for what is known and believed. The purpose of the cognitive mapping analysis was to identify emergent properties within the maps, which could reveal distinctive approaches to a formal environmental scanning process between the comparison groups (Intenders and Realizers).
The creation and analysis of maps followed Jones (1985) and Ackerman et al. (1992) guidance on how to construct cognitive maps. As the data had previously been transcribed and translated, the transcripts were used to code the data. Jones claims that transcribing tapes is very time consuming and expensive if paid for. Despite this, all the tapes were transcribed so as to guarantee the accuracy of the transcripts as well as take account of other non-linguistic data on the tapes, such as hesitations and repetitions. In respect of the mapping technique applied, this was based on Ackerman et al. (1992), suggestions and consisted of three major steps.
First, the data was broken into their constituent elements, usually different phrases which retained the language of the person providing the account. These phrases were treated as distinct concepts, which were then reconnected to represent the account in a graphical format. Second, pairs of phrases were united in a single concept where one provided a meaningful contrast to the other. These phrases were constructs: meaning was retained through contrast. Third, the distinct phrases were linked each to related others, to form a hierarchy of means and ends. This involved deciding on the status of one concept relative to another. Meaning was retained through the context. In order to achieve a more detailed assessment of the maps these were developed using the Graphics COPE software (Ackerman, 1992).
COPE allows maps to be visually represented and analysed on the computer. Besides the visual representation, COPE also allows for the structural analysis of the maps, and permits the grouping of concepts within the maps into sets. A Graphics COPE model is a collection of ideas and relationships connected in the form of a cognitive map. Ideas are expressed by short phrases, which encapsulate a single notion and its opposite. The relationships between these ideas are described by linking them together in either a causal or connotative manner. Causal links are normally used, and they indicate that one concept “caused” or “may lead to” another. Each block of text represents a “construct” which has two parts to it. The first part is the “presented pole” of the construct and the second pole (separated by three dots “ F F F ” which reads as “rather than”) is the contrast or psychological opposite. The linkage between the constructs (causal or connotative) represents the meaning of the construct in terms of the explanations and consequences.
The link in the form of an arrow shows the nature of the linkage. An arrow going out of a construct shows a consequence and an arrow into a construct an explanation. Each arrow, therefore, gives explanatory meaning to another (Eden, 1988). A negative sign on the “head” of an arrow implies that the first pole of the explanatory construct implies the second pole of the consequential construct. The maps presented are essentially composed of single pole constructs as respondents rarely provided answers that could be used as contrasting poles. However, the emergent pole only and contrasting pole only concept types are implicitly bipolar because Graphics COPE automatically infers the opposite pole of the concept.
In terms of how the maps were analysed, this was done by content, with the types of concepts assessed and their importance inferred, and by structure, where domain analysis and heads and tails analyses were used as recommended by Eden et al. (1992). Domain analysis calculates the total number of in-arrows and out-arrows from each node (or construct), and is used to find out which concepts are most significant in the model in terms of the density of linkage around them. The analysis does this by concentrating on the density of the links immediately going into or out of the concept. These concepts are likely to be important or to be key issues that might require further exploration. Heads are the concepts on a map that have arrows pointing into them but none pointing away from them. It is useful to identify them, as they can often be goals or desired outcomes. Tails are the concepts on a map that have arrows pointing away from them but none pointing into them. Tails are usually possible actions that a person might do in order to resolve a difficult problem, although they can indicate specific things that stand in the way of a solution. The numbers in each construct have no relevance for the analysis, as these are automatic and sequentially attributed to constructs as these are inputted into COPE.
Results and discussion
Relevance of a formal environmental scanning process Intenders formal scanning process and one showing a negative attitude. In terms of domain analysis, the most important concepts in the map are concepts (6) simple and objective information with just what we need to know, and (11) improve information to disseminate in meetings. These concepts have three links going into or out of them and represent some important aspects commonly regarded by respondents as central problems affecting their information needs: quality/objectivity of information and its dissemination/use by staff. Even in the case where the formalisation of the scanning process is seen as helpful but not relevant, the limited dissemination and use of information is still the main concern.
A more formalised scanning process is seen by the majority of respondents in both comparison groups as relevant and a vehicle to improve decision making which is in accordance with Fahey and Narayanan’s (1986) view of the outcomes of environmental scanning. In respect of the information process, the main problem faced by managers in hotel chains is that of dissemination and use of information. The lack or limited dissemination and use of information is regarded as a result of the company’s philosophy, with hierarchies seen as responsible for this situation. In fact, according to Engledow and Lenz (1989), environmental scanning can be a powerful tool for strategic management if it has specific aims and objectives, and the commitment of the key players within the organisation.
As represented in Figure 1, the majority regards the development and implementation of a formal environmental scanning process as something (11) very important and we have been trying to do something similar. In this group, the development and implementation of a formal scanning process is seen by the majority of respondents as very important, with concept (7) the information collected and analysed [may] be provided to the units, board of directors and administration, being the most important with the highest number of links (three links).
In those cases where a formal scanning process is not regarded as very relevant, the reasons have to do with a lack of confidence in other members of staff, company philosophy (hierarchies do not disseminate information), and the fact that managers do not have time to analyse and process masses of information. Similar reasons were found in research by Olsen et al. (1992), where respondents reported that active problem solving is much more rewarding than time spent on environmental scanning. As a result, a formal scanning process would have to provide quality and objective information that is easy to use and at a low cost.
This process should also improve the dissemination of information among staff. It seems, however, that before any of these steps towards the formalisation of the scanning process can be taken, a change in companies’ philosophy is crucial. If this does not occur, hierarchies will continue to keep the information for their own use. As reflected in previous research (Olsen et al., 1992, 1994; West and Olsen, 1989), it is apparent that the existing organisational culture rather than the link to the strategic planning process is the cause for a lack of success in the development and implementation of a formal scanning process amongst hospitality organisations. From this phase of analysis the following output propositions can be developed: . Output proposition 1: The successful adoption of a formal environmental scanning process is directly related to the quality, objectivity and format of the information produced as well as to a wider and more generalised dissemination and sharing of information. Output proposition 2: Rather than the link to the strategic planning process, existing organisational culture is likely to be the main cause for the lack of success in the implementation of a formal environmental scanning process.
Respondents’ views on the characteristics of an ideal environmental scanning process present two related sequences with common actions (tails) as their starting point and links relating the desired outcomes (heads). There is also a deviant case where the information from previous years is seen as sufficient for decision making (see Figure 3). The most important concept in the map, based on the domain analysis, is concept (7) information function as a priority, with concepts 2, 4, 10 and 11 reflecting a second order of importance. In summary, it can be said that the central characteristic of a formal scanning process, according to respondents in this group, is having the information function as a priority. It follows the need for access to more updated information, which should be of higher quality, better structured, and allowing better knowledge of market trends. From their viewpoint, this can only be achieved by hotel chains dedicating more attention to the information function.
On the other hand, a deviant case highlights the differing views of respondents within the same comparison group. As reflected in Figure 4, the majority of respondents regards a formal scanning process as relevant and suggests that it should be (11) computerised. There is one case, however, where this process is not seen as relevant because (17) It works as it is. The most important concepts in support of a formal scanning process, based on the domain analysis, are concepts 13 and 14. The respondents’ perspective is that if more staff and time to collect and analyse information is available then more information will be produced which have to be concentrated on a single source. As a result, access to information will be much quicker. In the case of a non-supportive view of a formal scanning process and according to the same analysis, the most central concept is that related to the amount of information which we ask for (concept 18). It is the respondent’s view that if we ask for too much, then the quality of the information will decrease and we will be provided with inaccurate information. This is an interesting perspective as the concept suggests that it is better to make decisions based on limited information than trying to be better documented at the expense of the accuracy of information.
The main characteristics of a formal environmental scanning process for Intenders are: information function as a priority, access to more up-to-date information, better knowledge of market trends, and better and more structured information. A process with such characteristics would improve the scanning activities particularly in terms of information analysis, dissemination and sharing. One respondent, however, reports differing views from the majority of the group. In this deviant case, the perception is that the respondent has the information needed, this being that from previous years. This reactive attitude is likely to limit exploration of opportunities or even adaptation to the company’s environment, as this is not an exercise about the past but instead about future events and trends (Hambrick, 1982; Aguilar, 1967). The decision-making process is the most relevant for respondents and no reference was made to the fact that a better scanning process could improve the strategic planning process or other forms of strategy development.
However, this procedure of extracting implications from the data for decision-making purposes is established as one of the main functions of environmental scanning (Daft et al., 1988; Lenz and Engledow, 1986; Stubbart, 1982). Another aspect has to do with the existing time constraints, normally deriving from the positions occupied by respondents. For this reason, information summarised and ready to use is at a premium. Its format, on the other hand, has to be such that it will allow dissemination and usage by everybody. Realizers regard the following as the most important characteristics of a formal scanning process: information concentrated on a single source, and more staff and time dedicated to collect and analyse the information needed. It is suggested in respondents’ answers that simplistic and individual forms of analysis as well as parttime environmental scanning would be improved by a more formalised scanning process. On the other hand, and as disclosed by this group, the structure of the scanning process has to allow the concentration of information on a single source, making dissemination and use much easier than the existing procedures.
These same aspects are addressed by Aaker (1983), who proposes a structured approach to environmental scanning by using internal resources and concentrating on the storage, processing and dissemination of information as ways to improve the scanning process. Not all respondents, however, feel the need for a more formalised scanning process. It is a respondent’s view that the output of such a process would be more information than that needed, at the expense of accuracy,the reason being that if people are asked for too much information they will provide quantity as opposed to quality information. Another concern about excessive formalisation is the fact that sensitive information, like that obtained from competition, can only be obtained informally and if the “rules of the game change we might lose very valuable information”.
Despite this acceptance of the existing status quo, the existing type of information analysis is regarded as “not the most comprehensive”. In this case, it is likely that a more formalised scanning process could, at least, improve the analysis of existing information. On the other hand, if an integrated approach is adopted (Aaker, 1983), companies may have a higher degree of control on the quality and accuracy of the information, whilst at the same time delimiting its output by clearly defining their information needs. From this phase of analysis the following output propositions can be developed: . Output proposition 3: An ideal formal environmental scanning process will be one that is organised in such a way that it allows the production of information for on-time decision making. . Output proposition 4: To allow wide dissemination and sharing of information, the scanning process will have to contemplate a system for storing, processing and making information available so it is in a format ready to use.
According to Figure 5, respondents’ perceptions of the barriers to a formal environmental scanning process can be seen as originating in two specific aspects: (2) information delayed three to four months which reflects the national culture, and the (3) lack of people to perform the information functions properly. These concepts are on the base (tail) of two sequences highlighting the barriers to the implementation of a formal environmental scanning process and the possible actions to overcome them. A domain analysis reveals concept (4) excess of workload limits staff’s attention to information function F F F more time or less workload, as the most important in Figure 5. It seems that overworked staff, or even the lack of skills to perform the scanning activities, are just explanations for a deeply ingrained barrier to the scanning process: the importance given to the scanning activity, second to other priorities.
This is apparent in those situations where more formal scanning is seen as relevant as well as in those where enough information is available. As a result, the proposed actions to overcome these barriers are likely to be irrelevant if the scanning process or “information function”, is not “promoted” to the same level of importance as “other priorities”. Barriers to a formal environmental scanning process represented in Figure 6 are related to the quality of information and limitations internal to the organisation. It is respondents’ perception that (14) existing external information is biased, which leads to a (13) lack of sound external information. This would be a major problem to a formal scanning process. At the moment, respondents try to overcome this problem by relying more on “friends and colleagues in the sector because we know that we can trust them”. In respect of internal limitations, two sequences are presented: the first originating from concepts 6 and 7 ± (6) lack of operational resources, and limitations of (7) budget, economic aspects and time, are seen as the central barriers standing in the way of a formal scanning process ± and the second on concept 9 ± (9) no barriers just a question of priorities. Based on a domain analysis, concept (11) staff behaviour and attitudes towards change F F F waiting and helping people to adapt, emerges as the most important, followed by concept (8) lack of staff to perform the function F F F more skilled staff to analyse information. The relevance of concept 11 can be seen as further emphasised by the following statement:
One way to overcome the existing barriers would be to avoid staff going through the natural phases of evolution within an organisation where they reach a stage of stagnation, reacting against anything that is new. This would require a permanent effort of adaptation to new realities.
This change in staff’s attitudes, coupled with a “political decision by the administration” regarding the information function, would be major steps towards the implementation of a formal scanning process. A first analysis of the answers provided by respondents of both comparison groups revealed the following as the main barriers to a formal scanning process: the excess of workload; the cost/benefit of the information process; and decision makers and staff attitudes towards the process. In respect of the actions to overcome them, these consist of: creating the necessary conditions for formal scanning to occur; a change in decision makers and staff’s attitudes; and the establishment of a direct relationship between the cost of a formal scanning process and an improvement in performance (see Table I for details). A further analysis, however, reveals other no less important barriers.
The quality of the information available is seen by both groups as a major reason for the lack of importance of a more formal scanning process. In fact, if the information is not reliable, why invest in producing even more? These findings are also in accordance with those of West and Olsen (1989), where these authors found the lack of good, reliable information as one of the major weaknesses associated with the scanning endeavour. Another major barrier according to both comparison groups is the decision-makers’ attitude towards such a process. As decision-makers are responsible for the majority of the scanning, they keep most of the information for their own use and limit its dissemination and sharing. As a result, it is understandable that they may create limitations to such a process. From one side, it is possible that they may have information enough for the decisions they have to make.
On the other hand, a wider process providing information to a more generalised public may be seen as a waste of time and investment when there are “other priorities to be performed prior to the information function”. The difficulty in evaluating quantitatively the information resulting from scanning is also seen as a major barrier to a formal scanning process (Olsen et al., 1992). In taking these barriers into account, it is apparent that the actions proposed and stated in Table I are not sufficient to overcome them. A combination of some of the proposed solutions seem to provide a more comprehensive list of those recommendations to take into account in the implementation of a formal scanning system. These are based on respondents’ proposed actions and can be summarised as: . change in administrations’ attitude towards the importance of information; . formalisation of the decision-making process;
Table I Summary of main barriers and actions to overcome them Barriers Intenders Excess of workload limits staff’s attention to information function Hard to justify the money spent in such process Realizers Staff behaviour and attitudes towards change Mental barriers from people at decision level Actions to overcome barriers More time or less workload Change attitude towards importance of information Waiting and helping people to adapt Better performance achieved change in hierarchies’ attitude towards using and sharing information; better definition of information needs and sources to provide quality information; more skilled staff to collect and analyse information.
By re-thinking the organisation’s approach to the relevance of information, hotel chains would tackle the more central barrier to a formal scanning process: the information function not regarded as a main priority. All related operational problems would be solved if key players in the organisation were supportive and committed to such a process (Engledow and Lenz, 1989). These observations lead to the development of a further set of output propositions: . Output proposition 5: The development of a formal process of environmental scanning will be dependent not just on the resolution of operational limitations, like time, personnel and finance, but essentially on a change of perspective by decision makers towards the importance of the information function. . Output proposition 6: If managers introduce a higher level of formalisation into their decision making process, it is likely that they will need other types of information, more reliable and in a more easy to use format. .
Output proposition 7: A better definition of information needs and the identification of the most relevant and reliable sources are likely to improve the quality of the output of the scanning process by, at the same time, reducing the amount of information available descriptive model (Figure 7) was developed. From the analysis of this model, it becomes clear that a formal environmental scanning process is seen as relevant by both comparison groups. In respect of the requisites for and the structure of a formal environmental scanning process, three main issues emerge from the analysis of the model: the quality of the existing information seen as not very reliable; the need for a change in decision makers approach to the importance of the information function; and the need for a structured format for the scanning process so that full advantage can be taken. In respect of the outcomes, these are regarded as very positive allowing for: greater efficiency; quicker decision making; and production of information for board meetings. A final aspect emerging from the analysis of the model is the similarity of the views supported by “intenders” and “realizers”. In fact, it can be said that attitudes do not vary greatly as a result of the hotel chain having a formal approach to strategy development.
This paper explored hotel chains’ attitudes towards a formal environmental scanning process with the aim to determine the relevance, characteristics and barriers to such a process as well as the possible actions to overcome them. Cognitive maps for each of the comparison groups have been produced and analysed for content and structure. From the analysis, seven output propositions to support future research have been developed. To allow a better identification of the themes encompassed by the output propositions these are summarised by area of concern and presented in Table II. From the analysis of the output propositions two main areas affecting the development of a formal environmental scanning process can be identified: decision making and managerial attitudes related, and environmental scanning process related.
Aaker, D. (1983), “Organizing a strategic information scanning system”, California Management Review, Vol. 25 No. 2, pp. 76-83. Ackerman, F. (1992), Graphics COPE User Guide, Strategic Decision Support Research Unit, Strathclyde University, Strathclyde. Ackerman, F., Eden, C. and Cropper, S. (1992), Getting Started with Cognitive Mapping: Tutorial Notes, Strategic Decision Support Research Unit, Strathclyde University, Strathclyde. Aguilar, F. (1967), Scanning the Business Environment, Macmillan, New York, NY. ËÄ Â Cavaco, H. (1993), “Promocao Turõstica”, in Associacao de Hoteis de Portugal, ËÄ Â Comunicacoes e Conclusoes do XI Congresso ËÄ Ä Nacional de
Hotelaria e Turismo, A.H.P., Estoril. Daft, R., Sormunen, J. and Parks, D. (1988), “Chief executive scanning, environmental characteristics, and company performance: an empirical study”, Strategic Management Journal, Vol. 9, pp. 123-39. Eden, C. (1988), “Cognitive mapping”, European Journal of Operational Research, Vol. 36, pp. 1-13.
Jorge Costa and Richard Teare Developing an environmental scanning process in the hotel sector International Journal of Contemporary Hospitality Management 12/3  156±169
Kefalas, A. and Schoderbeck, P. (1973), “Scanning the business environment”, Decision Sciences, Vol. 4, pp. 63-74. Lenz, R.T. and Engledow, J. (1986), “Environmental analysis and strategic decision making: a field study of selected `leading-edge’ corporations”, Strategic Management Journal, Vol. 7 No. 1, pp. 69-88. Martins, P. (1993), “Reestruturacao e inovacao da ËÄ ËÄ oferta”, in Associacao de Hoteis de Portugal, ËÄ Â Comunicacoes e Conclusoes do XI Congresso ËÄ Ä Nacional de Hotelaria e Turismo, A.H.P., Estoril. Mintzberg, H. (1992), “Five Ps for strategy”, in Mintzberg, H. and Quinn, J. (Eds), The Strategy Process: Concepts and Contexts, Prentice-Hall, London. Mintzberg, H. (1994), The Rise and Fall of Strategic Planning, Prentice-Hall, London. Olsen, M., Murphy, B. and Teare, R. (1994), “CEO perspectives on scanning the global hotel business environment”, International Journal of Contemporary Hospitality Management, Vol. 6 No. 4, pp. 3-9. Olsen, M., Tse, E. and West, J. (1992), Strategic Management in the Hospitality Industry, International Thomson Publishing, London. Relvas, A. (1993), “Reforcar a hotelaria atraves do Ë Â associativismo”, in Associacao de Hoteis de ËÄ Â Portugal, Comunicacoes e Conclusoes do XI ËÄ Ä
Congresso Nacional de Hotelaria e Turismo, A.H.P., Estoril. Segev, E. (1977), “How to use environmental analysis in strategy making”, Management Review, Vol. 66, pp. 4-13. Stoner, J. and Freeman, R. (1986), Management, 5th ed., Prentice-Hall, New York, NY. Stubbart, C. (1982), “Are environmental
scanning units effective?”, Long Range Planning, Vol. 15, pp. 139-45. Terry, P. (1977), “Mechanisms for environmental scanning”, Long Range Planning, Vol. 10, pp. 2-9. West, J. (1988), “Strategy, environmental scanning and their effect upon performance: an exploration study of the foodservice Industry”, unpublished doctoral dissertation, Department of Hotel, Restaurant and Institutional Management, Virginia Polytechnic Institute and State University, Blacksburg, VA. West, J. and Olsen, M. (1989), “Environmental scanning, industry structure and strategy making: concepts and research in the hospitality industry”, International Journal of Hospitality Management, Vol. 8 No. 4, pp. 283-98. Wheelen, T. and Hunger, J. (1989), Strategic Management, Addison-Wesley, Reading, MA.