Environmental Turbulence and Scanning Behavior: The Moderating Effects of Organizational Maturity
AbstractThis paper examines the relationship between environmental turbulence and information scanning behavior in a sample of 242 small and medium-sized enterprises (SMEs), and the moderating effects of organizational age. Our results suggest that SME decision makers utilize a selective, cognitive simplification process in their information search activities. Scanning behavior of SMEs is highly differentiated and very selective in the face of turbulent task environments. In general, our sampled SMEs seem to be more attuned to technological and competitive turbulence. Additionally, young and mature SMEs also exhibit different scanning behaviors. While young SMEs prefer a search mode of proactive continuous internal gathering, mature SMEs opt for a mode of reactive internal and external information gathering. Implications of this study are discussed.
Achrol, R.S. (1991). Evolution of the marketing organization: New forms for turbulent environment. Journal of Marketing, 55(October): 109-119.
Achrol, R.S. & Stern, L. (1988). Environmental determinants of decision-making uncertainty in marketing channels. Journal of Marketing Research, 25(February): 36-50.
Aguilar, F. (1967). Scanning the Business Environment. New York: MacMillan.
Barkema, H.G., Baum, J., & Mannix, E. (2002). Management challenges in a new time. Academy of Management Journal, 45(5): 916-930.
Barkema, H.G. & Piaskowska, D. (2002). Traveling through the value landscape: Foreign expansion through majority and minority joint ventures. Paper presented at the Annual Meeting of the Academy of Management, Denver, CO.
Beal R.M. (2000). Competing effectively: Environmental scanning, competitive strategy and organizational performance in small manufacturing companies. Journal of Small Business Management, 38(1):, 27-48.
Beinhocken, E.D., (1999). Robust adaptive strategies. Sloan Management Review, 40(3): 95-106.
Bhide, A. (1994). How entrepreneurs craft strategies that work. Price, R.W. (ed) Entrepreneurship 99/00, 62-74.
Bhide, A. (2000). The Origin and Evolution of New Businesses. New York: Oxford University Press.
Botchway, Q.G., Goodall, D., Noon, D., & Lemon, M. (2002). Emergence-based local economic development model: A way forward in responding to turbulent operating environments. Entrepreneurship and Regional Development, 14: 155-174.
Bourgeois, L.J. (1980). Strategy and environment: A conceptual integration. Academy of Management Review, 5(1): 25-39.
Boyd, B. & Fulk, J. (1996). Executive practices and perceived uncertainty: A multidimensional model. Journal of Management, 22(1): 1-21.
Brush, C. (1992). Marketplace information scanning activities of new manufacturing ventures. Journal of Small Business Management, 30(4): 41-51.
Chakravarthy, B. (1997). A new strategy framework for coping with turbulence. Sloan Management Review, 38(2): 69- 83.
Chrisman, J. & Leslie, J. (1989). Strategic, administrative, and operating problems: The impact of outsiders on small firm performance. Entrepreneurship: Theory and Practice, 13(3): 37-51.
Churchill, N. & Lewis, V. (1983). The five stages of business growth. Harvard Business Review, 61(3): 24.
Covin, J. & Covin, T. (1990). Competitive aggressiveness, environmental context and small firm performance. Entrepreneurship: Theory and Practice, 14(4): 35-50.
Courtney, H. (2001). 20/20 Foresight: Crafting Strategy in an Uncertain World. Boston: Harvard Business School Press.
Cyert, R. & March, J. (1963). A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall.
Daft, R. & Weick, A. (1984). Toward a model of organizations as imperative systems. Academy of Management Review, 9: 248-295.
Dess, G.G. & Beard, D.W. (1984). Dimensions of organizational task environments. Administrative Science Quarterly, 29: 52-73.
Duncan, R. (1972). Characteristics of organizational environments and perceived uncertainty. Administrative Science Quarterly, 2: 409-443.
Dutton, J. & Duncan, R. (1987). The creation of momentum for change through the process of strategic issue diagnosis. Strategic Management Journal, 12: 76-90.
Elenkov, D. (1997). Strategic uncertainty and environmental scanning: The case for institutional influences on scanning behavior. Strategic Management Journal, 18(4): 287-302.
Fahey, L., King, W., & Narayanan, V. (1981). Environmental scanning and forecasting in strategic planning. Long Range Planning, 14(1): 32-39.
Gavetti, G. & Levinthal, D. (2000). Looking forward and looking backward: Cognitive and experiential search. Administrative Science Quarterly, 45: 113-137.
Glazer, R. (1991). Marketing in an information intensive environment: Strategic implications of knowledge as an asset, Journal of Marketing, 55(October): 1-19.
Glazer, R. & Weiss, A.M. (1993). Marketing in turbulent environments: Decision processes and the time-sensitivity of information. Journal of Marketing Research, 30(November): 509-521.
Golde, R. (1964). Practical planning for small business. Harvard Business Review, 42(3): 147-161.
Gudmundson, D., Tower, C., & Hartman, E. (2001). Strategic implications of data gathering activities in small firms: A comparison between family and nonfamily firms. Journal of Small Business Strategy, Spring/Summer: 19-29.
Hambrick, D. (1981). Specialization of environmental scanning activities among upper level executives. Journal of Management Studies, 18: 299-320.
Hambrick, D.C. (1982). Environmental scanning and organizational strategy. Strategic Management Journal, 3(April-June): 159-175.
Hofer, C. & Schendel, D. (1978). Strategy Formulation: Analytical Concepts. St. Paul, MN: West Publishing.
Jaworski, B., Liang C. W., & MacInnis, D.J. (1995). Does competitive intelligence matter? Working paper, University of Southern California.
Jaworski, B. & Kohli, A. (1993). Market orientation: Antecedents and consequences. Journal of Marketing, 57(July): 53-70.
Johannisson, B. (1990). Economies of overview: Guiding the external growth of small firms. International Small Business Journal, 9(1): 32-44.
Kagan, A., Lau, K., & Nusgart, K. (1990). Information system usage within small business firms. Entrepreneurship: Theory and Practice, 14(3): 25-37.
Karp, T. (2004). Building foresight abilities in organizations: A future opportunity for future studies. Future Research Quarterly, 20(2): 5-30.
Kiesler, S. & Sproull, L. (1982). Managerial response to changing environments: Perspectives in problem sensing from social cognition. Administrative Science Quarterly, 27: 548-570.
Kohli, A. & Jaworski, B. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(April): 1-18.
Kohli, A., Jaworski, B., & Kumar, A. (1993). MARKOR: A measure of market orientation. Journal of Marketing Research, 30(November): 467-477.
Kozielecki, J. (1981). Psychological Decision Theory. Dordrecht, Holland: D. Reidel Co.
March, J. & Simon, H. (1958). Organizations. New York: Wiley & Sons.
Matthews, C. & Scott, S. (1995). Uncertainty and planning in small and entrepreneurial firms: An empirical assessment. Journal of Small Business Management, 13(3): 231-240.
May, R. C., Stewart, W.H. & Sweo, R. (2000). Environmental scanning behavior in a transitional economy: Evidence from Russia. The Academy of Management Journal, 43(3): 403- 429.
Miles, R. & Snow, C. (1978). Organizational Strategy, Structure and Process. New York: McGraw-Hill.
Milliken, F. (1987). Three types of perceived uncertainty about the environment: State, effect, and response uncertainty. Academy of Management Review, 12(1): 133-143.
Mohan-Neill, S. (1995). The influence of firm's age and size on its environmental scanning activities. Journal of Small Business Management, 33(4): 10-21.
Mourier, P. & Smith, M. (2001). Conquering Organizational Change. Atlanta, GA: CEP Press.
Narver, J.C. & Slater, S.F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(October): 20-35.
O'Reilly, C. (1982). Variations in decision makers' use of information sources: The impact of quality and accessibility of information. Academy of Management Journal, 25(4): 756-771.
Palmer, J., Wright, R., & Powers, J. (2001). Innovation and competitive advantage in small business: Effects of environments and business strategy. Journal of Small Business Strategy, 12(1): 30-41.
Pearce, J., Chapman, B., & David, F. (1982). Environmental scanning and growing firms. Journal of Small Business Management, 20(1), 27-34.
Pfeffer, J. & Salancik, G. (1978). The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row.
Pineda, R., Lerner, L., Miller, M., & Philips, S. (1998). An investigation of factors affecting the information search activities of small business managers. Journal of Small Business Management, 36(1): 11-22.
Rastogi, P. (2000). Knowledge management and intellectual capital: The new virtuous reality of competitiveness. Human Systems Management, 19: 39- 48.
Robbins, S. (1994). Management. 4th ed. Englewood Cliffs, NJ: Prentice-Hall.
Schwenk, C. (1984). Cognitive simplification processes in strategic decisionmaking. Strategic Management Journal, 5: 111-128.
Sinkula, J.M. (1994). Market information processing and organizational learning. Journal of Marketing, 58(January): 35-45.
Slater, S.F. & Narver, J.C. (1994). Does competitive environment moderate the market orientation-performance relationship? Journal of Marketing, 58(January): 46-55.
Smallbone, D. & North, D. (1995). Targeting established SMEs: Does their age matter? International Small Business Journal, 13(3): 47-64.
Smeltzer, L., Fann, G. & Nikolaisen, V. (1988). Environmental scanning practices of small business. Journal of Small Business Management, 26(3): 55-62.
Starbuck, W.H. (1976). Organizations and their environments. In: Dunette, M.D. (ed). Handbook of Industrial and Organizational Psychology, 1069- 1123. Chicago: Rand McNally.
Steinbruner, J. (1974). Cybernetic Theory of Decision. Princeton, NJ: Princeton University Press.
Stoica, M. (1995). Relating Strategic Adaptability To Business Performance: An Information Processing Approach. Diss. Washington State University.
Thompson, J. (1967). Organizations in Action. New York: McGraw-Hill.
Welsch, H. & Young, E. (1982). The information source selection decision: The role of entrepreneurial personality characteristics. Journal of Small Business Management, 20 (October): 49-57.