Environmental scanning by CEOs in two Canadian industries

The work of managers is information-intensive. Managers receive a huge amount of information from a wide range of sources and use the information to make day-to-day decisions and to formulate longer-term strategies. Yet much remains to be learned about the information behavior of managers as a distinct user group. This article reports on how top managers acquire and use information about the external business environment. Today's firms have to adapt to turbulent environments in which the competition, market, technology, and social conditions are constantly changing. Environmental scanning is the activity of gaining information about events and relationships in the organization's environment, the knowledge of which would assist management in planning future courses of action. We present the findings of a survey of the environmental scanning behavior of 207 CEOs in two Canadian industries—publishing and telecommunications. The CEOs indicated their perceptions of the level of uncertainty in the external environment, which sources they used to scan the environment, and their perceptions of the accessibility and quality of various sources. The survey found that the amount of scanning increases with perceived environmental uncertainty, and that the CEOs use a mix of internal and external, as well as personal and impersonal sources, to scan the environment. Analysis suggests that between environmental uncertainty, source accessibility, and source quality, source quality is the most important factor in explaining source use in scanning. This runs contrary to earlier user studies, particularly those of engineers and scientists, which concluded that perceived source accessibility was the overwhelming factor in source selection. A number of plausible explanations for this difference are discussed.