Lecture 2: Environmental Analysis Flashcards

This set of vocabulary flashcards covers key concepts from environmental analysis, including macro-environmental tools, forecasting methods, and the nature of uncertainty in strategic management.

Macro-environment

Broad environmental factors that impact many organisations, industries, and sectors to a greater or lesser extent.

External Environment

The environment in which an organisation operates and the environmental constraints that may limit what an organisation might do.

Internal Environment

The organisation's capabilities which determine what the organisation can do and how they fit with the external environment.

Strategy

The long-term direction of an organisation.

Strategy Statement

A summary of an organisation's purpose and direction, typically including vision, mission, objectives, values, scope, and capabilities.

Environmental Jolts

Sudden and unprecedented events, as defined by Meyer (1982), that may force organisations to adapt their strategies and learn.

Single-point Forecasting

A forecasting approach focused on what is likely to happen when there is a high degree of certainty.

Range Forecasting

A forecasting approach that identifies what is plausible within a set of possible outcomes.

Multiple Futures Forecasting

An approach to prediction that explores what is possible through alternative or multiple future scenarios.

Scenario Planning

The process of developing a few plausible views (typically 2 to 4) of how an organisation's environment might develop in the future to explore strategic options.

Francis Aguilar

The author of a 1967 book that provided the foundation for modern macro-environmental analyses like PESTEL.

Market Environment

The layer of the business environment focusing on direct participants such as suppliers, customers, and competitors.

Non-market Environment

The layer of the business environment involving external actors such as NGOs, Government, media, and campaign groups.