Economic Impacts on the Completion of Environmental Scan


Strategic planning is an essential aspect of a company and should be effectively managed. Strategic planning occurs through various phases within an organization, with the initial phase being environmental scanning. Both internal and external environmental changes pose an impact (either negative or positive) to an organization (Agbim et al., 2014). Therefore, a scan of environmental aspects offers a useful insight into the current trends and the reasons for changes in the environment. Effective analysis of the information retrieved from the environmental scan is thus of significance in an organization’s orientation and long-term stability. As such, the environmental scan is the means through which organizations acquire external information for the purpose of identifying and interpreting their possible trends (Jiang, & Gallupe, 2015). This paper will discuss how the current state of the economy will impact the completion of an environmental scan. To effectively evaluate the impacts of the economy on the successful completion of environmental scanning, it is of significance to understand the concerns that influence the economic factor and whether it is believed.     

There are various concerns that currently influence the economic factors, and thus, hindering the completion of an environmental scan. Macroeconomic factors and other uncontrollable events can lead to the failure of an organization if they are not well-handled, and therefore, they are the main concern as they cannot be predicted. Itani, & Mason (2014) note that the occurrence of these factors, particularly negative macroeconomics, influences the behavior of consumers and business stability causing a snowball effect in the economy. It is as such imperative to effectively handle these events earlier. The most common macroeconomic factors that can be grouped into this category include the rate of inflation, recession, and unemployment, which are characterized by lowering the spending power among consumers, and hence, reducing activities like import. This occurrence reduces an organization’s capability to predict, identify, and interpret trends in the market, and thus impacting on the completion of an environmental scan. 

            Secondly, microeconomic trends that focus on consumer income are as well important economic factors that influence the completion of an environmental scan. Consumer income determines the activeness of consumers in the market-affecting their purchase behavior (Chigbu, & Chinwe, n.d.). Generally, it is related to three components (discretionary, gross, and disposable components) of the state of the economy and the effects of completing an environmental scan. In terms of the gross income, which is the total amount of income an individual or an organization earns, an increase or decrease in gross income impacts on the completion of an environmental scan since it causes inconsistencies in the trend. Rapid rise or fall in taxes leads to an unpredictable disposable income. Disposable income is the amount of income an individual or an entity has after taxation. Consequently, the discretionary income just like the two discussed above influence the results of an environmental scan. It is the income that is left after settling all bills. Fluctuation in discretionary income also leads to the inability to predict an interpret market trends, and thus, can cause incompletion of environmental scan.

As such, both macroeconomic and microeconomic factors undoubtedly lead to an imbalance in the financial capabilities of the consumers affecting the economy, which in turn impacts on the completion of an environmental scan.


            This paper has noted that an environmental scan is an important technique for the prediction and interpretation of the trends that impact businesses. Organizations need to continuously analyze and understand their external environment to experience continuous growth. This is though made difficult as various unforeseen economic factors affect the operations of businesses and thus influence their ability to effectively predict and interpret the external market trends. Hence, the present state of the economy is unpredictable, and thus, impacting on the completion of an environmental scan.


Agbim, K. C., Oriarewo, G. O., & Zever, T. A. (2014). Moderating effects of individual entrepreneur and enterprise characteristics on the relationship between business environmental scanning behaviour and entrepreneurial performance. Journal of Business Studies Quarterly, 6(1), 248.


Itani, N., & Mason, K. (2014). A macro-environment approach to civil aviation strategic planning. Transport Policy, 33, 125-135.

Jiang, J., & Gallupe, R. B. (2015). Environmental scanning and business insight capability: the role of business analytics and knowledge integration. In Proceedings of the Twenty-First Americas Conference on Information Systems, Puerto Rico, August (pp. 13-15).