Question

In the context of the external environment of a firm, which of the following statements is true of environmental scanning? A. Managers scan their firm's environment to reduce uncertainty. B. It remains unaffected by organizational strategies. C. CEOs in poorer-performing firms scan their firms' environments more frequently than CEOs in better-performing firms. D. It is reactive in nature and leads to the detection of environmental problems after they become organizational crises.

Answer 1

Answer: A. Managers scan their firm's environment to reduce uncertainty.

Explanation: In the context of the external environment of a firm,  managers scan their firm's environment to reduce uncertainty. In doing so, they stay up to date on important factors in their industry which helps to reduce uncertainty. Environmental scanning simply involves searching for cues, important happenings, events, issues etc. that might affect an organization either positively or negatively.

Answer 2

Answer:

A. Managers scan their firm's environment to reduce uncertainty.

Explanation:

Environmental scanning of the place in which a business finds itself is carried out by managers to guage the effect of political, cultural and economic forces that will affect its operations.

Economic scanning is important because it reduces uncertainty a business faces in the environment it operates. It helps that manager develop strategies to avoid business failure.

For example if sale of pork is not supported by the local culture, it will be futile to produce pork in such an environment. Rather the business finds something that appeals to the environment in which they operate.