Accounting technicians scheme west africa
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- B.6 Techniques for Interacting with the Environment
| B.5 Environmental Forecasting Forecasting affords managers the opportunity to acquire a foreknowledge of what lies ahead in order to cope with their business environment. The future cannot be predicted with certainty but it can be forecasted in the sense that one can have an informed projection of a future event or conditions. The scope and areas where forecasting can be done are in areas of the political, legal, technological, economic, ecological, cultural and social environments. Thus, environmental forecasting is crucial because vital information generated about the future course of action become the basic inputs or raw materials for managerial decision making, planning and control. Forecasts are based on fact, assumption, and some methods/techniques of combining these data and assumptions. Therefore, the reliability of forecasts will be dependent upon the level of accuracy of the data collected, assumptions made and methods/techniques employed in reaching the forecasts in the first instance. Finally, we can rightly infer that (i) the forecasting process improves the manager’s ability to appreciate the interplay of environmental variables and how to anticipate, process and cope with them. (ii) The manager is able to explore, in advance, the various challenges and opportunities as they present themselves and determine how to solve them, (iii) Forecasting aids scanning and vice versa. The PESITEL model is an easy non-quantitative technique of analysing the environment of business. It is used to identify the critical elements of an entity's external environment. Porter’s Diamond model is used to explain why entities in some countries or areas of a particular country enjoy competitive advantage over similar entities in the same industry or sector. B.6 Techniques for Interacting with the Environment After the manager has identified the relevant stakeholders and collected information about future trends involving these stakeholders, he or she must develop some means of interacting effectively with the environment. Through these interactions, the manager is trying to maximize well-being by gaining a competitive advantage or by blunting the negative effects that these stakeholders can have on operations. Although there are numerous actions that the organization may take, some of the most common are the following 1. Download 3.37 Mb. Share with your friends:
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