1. Week 6: Understanding the business environment
    1. Environment describes the internal or external persons, events, ideas, behavior or perceptions that present barriers and opportunities to wealth.
      1. Marketplace is unfriendly, if not hostile.
      2. A seller has to build credibility.
      3. Business is an effort to persuade the customer to do our will.
      4. Our enemy is a competitor, or other social or economic force that would take a customer from us through superior persuasion.
      5. Corporate communication is part of competitive strategy and the essence of formulating competitive strategy is relating a company to its environment.
    2. Exercise: Students list and critique sources their companies use to understand the environment.
      1. What is the best source, in your opinion?
      2. What is the worst source, in your opinion?
      3. What is the one source of environmental understanding that you must have?
      4. NEXT week’s exercise: Examine and critique your company’s strategy.
    3. Corporate communication and environmental change
      1. Interprets the business environment to help sellers adapt and succeed.
      2. Observation is proactive and reactive.
        1. Reactive: Captures and classifies data as profitable opportunities or threats.
        2. Proactive: reaches into the business environment to find profitable ways to take advantage of it and reduce threats to company survival.
          1. Computerized decision support systems. Data mining.
      3. The difficulty with observation is that everything is in flux.
        1. Cannot assume that any environmental variable will remain stable.
        2. Monitor any internal or external persons, events, ideas, behaviors or perceptions that may threaten or enhance a company’s survival and success.
        3. Work within economic limitations.
          1. Requires humans who know what to look for.
        4. Information is hard or soft.
        5. People work with assumptions and adjust behaviors within these assumptions. Every organization has limits imposed on its rational processes.
        6. 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.
        7. Observation is not knowledge. Knowledge in business includes an ability to make economic transactions based on certitude about observations.
        8. Knowledge becomes a message that directs specific economic action.
        9. 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.
        10. Learning is incremental.
      4. Change
        1. Change may be negligible, immediate or delayed.
        2. Change is normal and does not represent loss of control.
        3. A manager’s attitude about change distorts environmental observation.
        4. Large change is more beneficial from a corporate communication point of view because clear and present danger sends an overpowering message.
        5. Managers keep mental change and watch lists and update both constantly.
        6. Companies possess many environmental observations in recorded form, but records are rarely synthesized and communicated.
        7. Change includes unknown outcomes that carry both risk and opportunity. Don’t get locked in.
      5. Perception and fact
        1. Fact: verifiable.
        2. Perception: awareness through the media of the senses. May be accurate, inaccurate or distorted.
        3. Managers must take care to distinguish fact from perception.
        4. A manager’s job is to get people to act.
        5. The need for consensus on facts.
        6. Managers should know when they fly blind and use appropriate caution.
        7. Perception equals fact when a majority of key observers perceive an event in the same way and the perception affects survival and success.
        8. Over time, employees tend to identify with a manager’s vision and messages. They deny evidence, consciously or unconsciously, to protect their personal security.
        9. Openness has its dangers as well.
      6. Primary and secondary data capture.
        1. Data is not as important as the knowledge it conveys.
        2. Managers need to test environmental interpretations for accuracy and common sense. Five whys. Trial balloons.
        3. Accuracy.
        4. Focus on business at hand.
        5. Document learning to benefit others.
        6. Incrementalism
        7. Systematization of environmental observation.
      7. Storage and transmission of environmental observations.

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