Chapter 8: The competitive, technological, political and socio-cultural environment

Chapter 9: The economic environment

The environment in which organizations operate is often now characterized by the four D s:

• Difficult

• Dangerous

• Dynamic

• Diverse.

In other words, the environment is constantly changing. It is this constant change that makes environment scanning important for recreation, leisure, tourism and other organizations. Organizations that remain static in a dynamic environment experience strategic drift and are likely to fail. Figure 8.1 illustrates the concept of strategic drift which can explain such failure.

Figure 8.1: Strategic drift

Between period t0 and t1, the operating environment is static, and the organization illustrated makes no policy change, so that by the end of the period, at t1, organizational policy at B is in tune with the environment at A. However, the period t1 to t2 represents a period of dynamic change in the operating environment. The organization, however, undertakes only marginal policy change so that by the end of the period it is experiencing strategic drift, represented by the distance CD.

Chapters 8 and 9 analyse the nature of the operating environment. This chapter considers the competitive, technological, political and socio-cultural environments. Chapter 9 considers the economic environment. These environments are often referred to using the acronym C-PEST (Competitive, Political, Economic, Socio-cultural and Technical) environment and their analysis enables a comprehensive opportunities and threats analysis to be undertaken. A framework for this is provided...