The difficulty with observation is that everything is in flux.
- Week 6: Understanding the business environment
- Environment describes the internal or external persons, events,
ideas, behavior or perceptions that present barriers and opportunities to wealth.
- Marketplace is unfriendly, if not hostile.
- A seller has to build credibility.
- Business is an effort to persuade the customer to do our will.
- Our enemy is a competitor, or other social or economic force that would take a customer
from us through superior persuasion.
- Corporate communication is part of competitive strategy and the essence of formulating
competitive strategy is relating a company to its environment.
- Exercise: Students list and critique sources their companies use
to understand the environment.
- What is the best source, in your opinion?
- What is the worst source, in your opinion?
- What is the one source of environmental understanding that you must have?
- NEXT weeks exercise: Examine and critique your companys strategy.
- Corporate communication and environmental change
- Interprets the business environment to help sellers adapt and succeed.
- Observation is proactive and reactive.
- Reactive: Captures and classifies data as profitable opportunities
- Proactive: reaches into the business environment to find
profitable ways to take advantage of it and reduce threats to company survival.
- Computerized decision support systems. Data mining.
- Cannot assume that any environmental variable will remain stable.
- Monitor any internal or external persons, events, ideas, behaviors
or perceptions that may threaten or enhance a companys survival and success.
- Work within economic limitations.
- Requires humans who know what to look for.
- Information is hard or soft.
- People work with assumptions and adjust behaviors within these
assumptions. Every organization has limits imposed on its rational processes.
- A manager uses judgment to create enough information at any one
time in order to maintain economic transactions and to ensure survival and success.
Information is often local knowledge.
- Observation is not knowledge. Knowledge in business includes an
ability to make economic transactions based on certitude about observations.
- Knowledge becomes a message that directs specific economic action.
- One never knows when a business opportunity might arise from
seemingly valueless knowledge. Developing business knowledge, even within boundaries, is
like peeling an onion: there is always another layer below.
- Learning is incremental.
Perception and fact
- Change may be negligible, immediate or delayed.
- Change is normal and does not represent loss of control.
- A managers attitude about change distorts environmental
- Large change is more beneficial from a corporate communication
point of view because clear and present danger sends an overpowering message.
- Managers keep mental change and watch lists and update both
- Companies possess many environmental observations in recorded
form, but records are rarely synthesized and communicated.
- Change includes unknown outcomes that carry both risk and
opportunity. Dont get locked in.
Primary and secondary data capture.
- Fact: verifiable.
- Perception: awareness through the media of the senses. May be
accurate, inaccurate or distorted.
- Managers must take care to distinguish fact from perception.
- A managers job is to get people to act.
- The need for consensus on facts.
- Managers should know when they fly blind and use appropriate
- Perception equals fact when a majority of key observers perceive
an event in the same way and the perception affects survival and success.
- Over time, employees tend to identify with a managers vision
and messages. They deny evidence, consciously or unconsciously, to protect their personal
- Openness has its dangers as well.
Storage and transmission of environmental observations.
- Data is not as important as the knowledge it conveys.
- Managers need to test environmental interpretations for accuracy
and common sense. Five whys. Trial balloons.
- Focus on business at hand.
- Document learning to benefit others.
- Systematization of environmental observation.
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