The relationship between organizational culture and environmental scanning: a case study - includes related information - The Library in Corporate Intelligence Activities

Library Trends, Fall, 1994 by Jerry P. Miller

Introduction

The intelligence function comprises the collection, analysis, and dissemination of information about events in a company's external environment to decision makers and/or strategists (Aguilar, 1967; Porter, 1980). This case study examines a major component of the collection phase--environmental scanning-which is the acquisition of "information about events and relationships in a company's outside environment, the knowledge of which would assist top management in its task of charting the company's future course of action" (Aguilar, 1967, p. 1). When an organization places a high priority on external information, its decision makers access various sources to aid their

Jerry P. Miller, Graduate School of Library and Information Science, Simmons College, 300 The Fenway, Boston, MA 02115-5898 strategic planning. The apparent connection between organizational success and scanning has prompted the examination of this activity. The strategy literature considers scanning as the stimulus that initiates the organizational adaptation process (Hambrick, 1981; Pfeffer & Salancik, 1978). The popular literature often profiles firms which sustain profitability and success through their reliance on pertinent information. In fact, after twenty-five years, the scanning literature includes at least thirty-five conceptual and empirical journal articles as well as ten doctoral dissertations. However, starting with its pioneers--Aguilar (1967) and Wilensky (1967)--authors frequently stated that minimal attention had been given to the topic of scanning (Kefalas & Schoderbek, 1973; Pfeffer & Salancik, 1978; Hambrick, 1981; Daft & Weick, 1984). Most recently, Choo and Auster (1993) underscored the critical need to expand the understanding of this activity. Despite the continued attention, why have the insights and findings from these studies not produced a clear understanding of scanning behavior?

Ignorance of previous work as well as imprecise analysis may provide some answers to this question. More essentially, however, this research has routinely overlooked the fact that scanning is a behavior which managers perform within their specific setting (Katzer, 1987). Traditionally, scanning studies focused on information sources and their systems as well as quantifiable organizational phenomena. Researchers isolated relatively objective factors to demonstrate statistical significance for possible generalization. Although these works produced various insights, objective external factors do not reflect the ambiguous and inconsistent nature of scanning as a behavior. Therefore, studying the process of how managers scan within their work setting can yield interesting and useful insights for further investigations as well as for the design and implementation of scanning processes. Given this perspective, the objective of this case study is to describe how 220 managers within a Fortune 500 manufacturing firm scan the environment and how attributes of their organizational culture affect this activity.

Researchers have examined the influence of corporate culture values on certain aspects of the information-seeking behavior of managers, but environmental scanning has not been studied. These studies illustrate that organizational values focus information processes and thereby indicate what sources managers can use and what alternatives they can consider within the decision-making process (Cyert & March, 1963; Galbraith, 1974; Feldman & March, 1981; Schwartz & Davis, 1981; Schein, 1983; Smircich, 1983; Wilkins, 1983; Huber, 1984; Ulrich, 1984; Lorsch, 1985; Schein, 1985; Lenz Engledow, 1986). Over time, however, existing norms become so embedded within policies and processes that they create a distinct organizational myopia (Ouchi & Wilkins, 1985; Huber & Daft, 1987). Consequently, the organization's perceptual filter becomes impervious to external change (Sathe, 1983; O'Reilly, 1983; Lorsch, 1985; Reiman & Wiener, 1988). In addition to focusing this process, cultural factors also influence acquisition. Dewhirst (1971) observed that information-sharing norms affect the degree to which information channels are open or closed. When values encourage managers to hoard information, the organization loses internal transparency and its resiliency to market fluctuations. Furthermore, in their examination of the relationships among information acquisition and five organizational climate scales (democratic governance, support, esprit, freedom, and innovation), Samuels and McClure (1983) concluded that effective information processing occurs in open, rather than closed, organizations. Finally, in a study of 695 employees in a public utility, Muchinsky (1977) found that the climate dimensions of interpersonal milieu, organizational structure, and procedures correlated with the use of interpersonal information sources. These studies offer evidence that culture can affect the selection of alternatives for consideration within decision making as well as the processing of information. However, the relationship between organizational values and environmental scanning has not been studied (Wilson, 1981; O'Reilly, 1983; Culnan, 1983, 1985; Huber Daft, 1987). As with other information processes, cultural values could also affect the extent to which managers acquire external information for future internal dissemination and decision making.