On Business: An Application of Clausewitz to Business Leadership and Environmental Scanning
The purpose of this paper is to provide business managers with linkage between previously published academic works on business leadership and environmental scanning and relevant material drawn from Carl von Clausewitz’s classic military affairs treatise, “On War.” This linkage will assist business strategists and Top Management Teams in broadening their knowledge on scanning and their development of strategic plans.
Table of Contents
Table of Contents
Clausewitz on Environmental Scanning
Carl von Clausewitz’ theories as presented in On War focus on the importance of leveraging strength in time and space against an opponent. He also defines two of his most famous theories, that of fog and friction. Fog in war is essentially the unknown in war. Friction is a combination of factors that inhibit or limit friendly operations. These factors could either be internal or external to the organization.
Central to his overall “Art” are three operating concepts to a commander’s decision making cycle:
(1) top-down control emphasizing a strict adherence to echeloned command and control and the support of the next higher commander’s intent,
(2) standardized methods and routines at the tactical level and
(3) friction: those factors in conflict that impede or inhibit planned operations, like weather, poor logistics, scarcity of or inadequate information; or emotional and psychological factors, like fear and panic.
An important discussion in the nature of friction is that of his description of the fog of war: It is that combination of danger, uncertainty and perhaps above all, chance. (Clausewitz, 1968, 144) The element of chance is that occurrence of a random, unplanned and unforeseen event that dramatically alters the situation, requiring an immediate response. A commander’s ability to react to fog and friction gives us a good understanding of his mental flexibility and ability to be creative.
Clausewitz encouraged the exhaustion of the opponent by forcing the increased expenditure of effort for increasingly fewer returns. At the same time he aimed to overcome his own friction by identifying the opponent’s "centers of gravity" upon which his power and movement depended. Once the centers of gravity were identified, the Clausewitz approach was to direct operational efforts in time and space against them into the fewest possible moves (not unlike chess). The Clausewitz approach subordinated all minor and secondary actions towards seeking a decisive battle using a superiority of force and conditions to force a quick strategic victory. Clausewitz places the responsibility for managing the army on the leader’s skill and will.
What does it take to be a leader? Renowned historian and military thinker Brigadier General S.L.A. Marshall’s description of the art of leading is both situational and transformational: Leading “is the art of dealing with humanity, of working diligently on behalf of men, of being sympathetic with them, but equally of insisting that they make a square facing towards their own problems” (Marshall, 1978, 160).
A challenge for researchers is that leadership, much like morale and organizational cohesion, is an intangible quantity. An organization without it certainly suffers; one that has it is one that succeeds. The problem is the middle ground: How much is enough and what type is needed in order to best serve the needs of the organization and those of its’ members? Once this is determined, it makes sense to both attract and recruit the types of personalities who match the needs of the organization; or to develop internal leader development programs to inculcate the types of leaders needed. Such a leader development program could include not just training sessions, but formal and/or informal mentoring programs. From an Open systems perspective, it follows that a combined approach, depending on the organization’s capabilities to do so, would serve to meet the leadership challenge for the organization.
Transactional leaders ensure that what needs to be done gets done. At the heart of the service and product industry is this basic approach. If the product cannot be delivered, then nothing else matters as the organization will not stay in business for long. Based on contingent reward, the subordinates do what is expected of them because it is in their best interests to do so. (Northouse, 2004, 178)
In other words, despite the popularity of espousing the value and benefits of transformational leadership within an organization, transactional leadership remains the foundation on which all other leadership is based. For military leadership purposes, this suggests that transactional leadership ensures that the mission is accomplished, despite the cost, even under the most adverse conditions. It is suggested that depending on the type of organization, its mission and available resources, plus the skill levels of the members, transformational and even transcendental leadership may be applicable.
Transformational leadership builds onto the foundations of transactional leadership. The transformational leader aligns the interests of the organization and the people in it. (Bass, 1999) As such, transformational leadership “is concerned with emotions, values, ethics, standards, and long-term goals, and includes assessing followers’ motives, satisfying their needs, and treating them as full human beings” (Northouse, 2004, 169). Transformational leaders develop a culture of continuous improvement while delivering their product. Transformational leaders institutionalize a culture of shared ethics and a desire to deliver quality service based on customer service. “Transformational leadership adds to the effectiveness of transactional leadership; transactional leadership does not substitute for transformational leadership” (Bass, 1999, 21).
A transformational leader must communicate his or her vision (goals and intentions) and will to the members of the organization. Members of the organization do not want to be kept in the dark about their operations, nor do they not want to blindly follow their managers. Such ignorance is not only dangerous; it can have a devastating effect on an organization’s morale. Further, in the absence of concrete information, organization members are likely to make up information just for something to talk about.
The transformational leader then understands that one of his or her goals is that of building and maintaining organizational morale. As discussed above, morale is a qualitative, not quantitative commodity. S.L.A. Marshall, noting the soldiers fight for their comrades, not out of any sense of duty or responsibility to their country, asserts that “Battle morale comes from unity more than from all else and it will rise or fall in the measure that unity is felt by the ranks” (Marshall, 1978, 138).
A major point however, is that the communication of vision and providing direction to subordinates is not enough. The leader must have a system in place in order to follow through; if the vision is not implemented, the action is tantamount to a baseball player striking out- swinging at pitches and missing. The leader must remain involved in the overall process of managing the system in order to ensure that the product is delivered or the service is provided: The organization must accomplish its mission otherwise its’ survival will be at risk.
Transformational leaders build transformational organizations. Transformational organizations become greater than the sum of their parts and accomplish more than simply turning out product or providing a service. In such organizations, the members “care about each other, intellectually stimulate each other, inspire each other, and identify with the team’s goals” (Bass, 1999, 11). Individuals must be inspired to achieve high standards in their work; it is commonly understood that satisfied employees show up for work every day not just because of monetary compensation: They do so because they perceive that their work in the organization means something. They must feel and understand that their work is not conducted in a vacuum, that it is part of the organization’s function as a whole. An organization with no individual cohesion, that intangible glue that binds members together, again is at risk of inducing chaos.
Research indicates that transformational leaders are ones with high moral and ethical standards, which not only steers the organization along the legal path of ethical conduct, it ensures that members are provided with a model of behavior on which to pattern their own behavior.
Krishnan (2001) concludes that transformational leaders value morals over competence. “The results of this study provide some empirical support to equating transformational leadership with moral leadership or to treating moral leadership as a component of transformational leadership” (Krishnan, 2001). By extension, experience has shown that loyalty to the organization is similar in value to morals for organizational members. An organization’s members can always undergo additional training in order to make up for a lack of competence or skills in a particular professional area. However, since loyalty and morality are much more inimical to a person’s character, such traits cannot be easily inculcated if they do not already exist. While organizational oversight can monitor and provide a level of discipline to enforce such standards, that managerial effort takes precious time away from the more important work of ensuring the organization’s tasks are accomplished.
Keegan (1988), concerned with the future of mankind and the effect of leadership decisions in the nuclear era, defines the post-heroic leader in the terms of what we also know as the transcendental leader. Keegan asserts that the introduction of nuclear weapons into warfare has further complicated the role of the politico-military leader. No more is the leader simply concerned with actions directly on the battlefield. Since the actions of those he leads could have catastrophic consequences for mankind, the leader must also consider the social and moral outcomes of his decisions.
Drawing on previous work, Sanders, Hopkins & Geroy (2003) suggest that transcendental leadership is more about the spiritual development of the leader than simply the management of an organization and the leadership of people. Their concern is with the three tiers of transcendental leadership: Consciousness, moral character and faith.
In addition to understanding and achieving a higher level of consciousness, one that transcends everyday environmental boundaries and structures, transcendental leaders seek to impart those same qualities to their subordinates. This servant-leader approach probably is not suited for all industries; however, the notion of not only achieving organizational goals and business objectives, but achieving personal spiritual growth is a fairly radical one for a capitalist business system. Transcendental leaders develop their employees as people, while delivering product and services to their client. Gibson and Pason (2003) believe that the most challenging issues in teaching leadership are the “cultivation of attitudes and ethical codes that allows for the proper application of the common skills and talents developed by the leadership programs” (Gibson & Pason, 2003, 23).
Dr. Andre Delbecq found that leaders feel disconnected from their roles as managers if they do not have an internal drive or spirituality that provides them with the motivation and attitudes to succeed. Delbecq’s leadership seminars aim to help managers develop the linkage between spirituality and pragmatism. He has the participants confront their innermost fears regarding decision making; this assists them in overcoming decision stasis. The tenets of such spirituality are: compassion, humility, empowerment, ethical behavior and egalitarian treatment of employees. Leigh-Taylor (2000).
Pseudo transformational leadership
Adolf Hitler’s leadership style has been described as “pseudo transformational” (Bass, 1999, 19). This is largely because the tenets of National Socialism drew on a false image of the past and the supposed superiorities of the Aryan race. Hitler’s charisma and use of oratory to promulgate his ideas was an example of idealized influence; however, in this instance, it was used to promote genocide and racial hatred.
Keegan (1988) defines Hitler’s style as that of the false heroic model: The leader who pretends to be heroic. Hitler’s leadership is perhaps not as uncommon as one would hope or prefer. Other notorious examples include Josef Stalin, Saddam Hussein and Robert Mugabe of Zimbabwe . The false heroic leader is the one who ignores the sound advice of experienced subordinates. The pseudo-transformational leader deludes himself into believing that nothing can stop his success; that his will, if only properly executed by his subordinates, can allow him to achieve his goals. Any failure of his plans is automatically blamed on disloyal or incompetent subordinates; rather than on the actions of his opponent or an unrealistic appraisal of existing resources. A common personality trait of the pseudo-transformational leader is that of delusional paranoia. In Hitler’s case, the several assassination attempts against him validated his fear that there were traitors in the German Army. He seems to have never considered that the attempts were an indicator of the deep dissatisfaction within the Army’s ranks regarding his leadership style and decision making process.
A final commonality with pseudo-transformational leaders is lack of accountability. Such leaders are ones who essentially are free to administer the organization with little or no oversight. Such lack of supervision, even on the most cursory level, inevitably leads to abuses of power and authority. Experience has shown that such leaders manage through intimidation, harassment and threats. Trust, credibility and loyalty, fragile intangible qualities in any organization; are bound to crumble and disintegrate unless aggressive oversight is maintained. This can be accomplished through the establishment of an active oversight body, such as a Board of Directors, a Corporate Ethics Officer or Ombudsman and an open line of communications between corporate headquarters and the first line employees.
Revolutionary leadership: Imagining the unimaginable
A common aphorism, especially in the military, is that “If it ain’t broke, don’t fix it.” The problem with this approach is that sometimes, “it” or the paradigm, may be flawed or could be improved on. Visionaries who break the paradigm are revolutionaries with a vision of what could be accomplished and the ambition to do so. Zachary (2004) terms such visionaries as mongrels because they do not accept the rules of regulation and tradition.
As Hamel succinctly says, “Seeing over the horizon, finding the unconventional, imagining the unimagined—innovation comes from a new way of seeing and a new way of being” (Hamel, 2003, 406). Revolutionary leaders are willing to take risks (sometimes both intellectually and physically and “push the envelope” of what is possible. As noted above, the challenge for such leadership is forcing change on an organization and overcoming the inherent obstacles of taking the organizations members in an altogether different direction or establishing a new paradigm of thought and action.
Innovation is the ability to take existing resources and apply them in problem solving in a unique manner. It is too easy to accept failure because of a lack of resources. The innovative leader is the person who can assess the problem and imagine a different method for solving the challenge even given a paucity of resources. A potential issue for the innovative leader is lack of organizational support, both from subordinates as well as superiors. Organizations should seek to support such revolutionary leaders; directing the energy towards positive results can only assist the organization in preparing to meet tomorrow’s demands today.
The situational leadership style is based on correlation between task behavior and relationship behavior. S.L.A. Marshall’s description of the art of leading is both situational and transformational: Leading “is the art of dealing with humanity, of working diligently on behalf of men, of being sympathetic with them, but equally of insisting that they make a square facing towards their own problems” (Marshall, 1978, 160).
Keegan (1988) refers to situational leadership when he describes anti-heroic leadership. Anti-heroic leadership is defined as leading from the front when the situation requires it. Keegan takes the reader to the Napoleonic era, using Wellington as his model of the anti-hero. From this standpoint, the commander is somewhat removed from the front line and immediate danger, observing the battle and managing his combat resources. However, in time of crisis, the anti-heroic leader does place himself at the front with his soldiers, both to inspire them and to lead them. In terms of leadership, we see that the anti-heroic commander uses situational leadership to dictate his position on the battlefield.
Contingency theory “suggests that a leader’s effectiveness depend on how well the leader’s style fits the context” (Northouse, 2004, 109). Contingency leadership is essentially pragmatic in nature, as it seeks to match the right kind of leader (and hence their particular style of leadership) with the right situation or organization. In an application situation, this means that in a military basic training environment, an authoritarian, drill sergeant type of leader is better matched to the situation of training new recruits than a transformational or transcendental leader. The pragmatic leader views leadership challenges from the perspective of “It all depends” on the situation. However, this approach is fraught with the perils of moral relativism (O’Toole, 2003).
Keegan (1988) refers to directive leadership in his definition of un-heroic leadership. Un-heroic leadership is that style that never leads from the front, but directs others while maintaining an overarching view of the battlefield. Keegan attributes this leadership style to Union general (and later President) Ulysses S. Grant. Grant, who has had a book on his leadership style published, is perhaps the archetype of today’s military leader: He does not draw attention to himself; is quietly professional; keeps his own counsel; remains in control of himself; makes the right decisions at the right times.
Keegan (1988) defines the heroic leader as the participative leader. His definition of the heroic leadership style is one where the commander always leads from the front, as an active member of the organization. Keegan equates this type of leadership with leadership from classical times, using Alexander the Great as the model. Keegan states that the nature of combat in classical times required the leader to not only command his units, but to lead them directly into battle. The psychology of heroic leadership then is being seen by your soldiers as willing to take the same risks and being personally involved in the act of fighting the opponent.
The authoritarian leader could be characterized as the transactional leader who is more concerned with accomplishing the organization’s goals than with the welfare of the organization’s members. However, despite the negative connotation associated with authoritarianism, the style may be appropriate under certain circumstances where strict adherence to rules and procedures is the only method to ensure an organization’s survival as well as the survival of the members.
The democratic leader is the one who includes everyone in the organization in the decision making process. Experience indicates that this process, on the surface a good idea as it is inclusive in nature and allows everyone to have a voice in the decision, tends to be time consuming and fraught with the challenge of achieving consensus especially in a diverse organization. In addition, even though it is inclusive, another drawback is that it will be impossible to accede to the wishes and desires of everyone in the organization. It is also valid to question whether or not everyone’s opinion, education, and experience really qualifies them to be involved in the decision making process.
An additional challenge is that because the leader is the one person responsible for the ultimate success or failure of the organization to achieve its stated objectives and survive as an organization, the leader must make decisions that support that survival and achievement. While in some organizations, democratic leadership might seem to be the best as it serves the collective interest of all of the organization’s members, it might not truly serve the organization’s interests as would some other form of leadership and decision making styles.
“Transformational leadership adds to the effectiveness of transactional leadership; transactional leadership does not substitute for transformational leadership” (Bass, 1999, 21). In other words, despite the popularity of espousing the benefits of transformational leadership, transactional leadership remains the foundation on which all other leadership is based. For military leadership purposes, this suggests that transactional leadership ensures that the mission is accomplished, despite the cost, even under the most adverse conditions.
Drew presents three fundamental challenges that any leader must resolve in order to be successful: Understanding the capabilities and limitations of existing resources; the second is access to timely and accurate intelligence; the third is the force of character or will to accomplish the mission.
John Keegan, in his landmark study on the subject, “The Mask of Command,” delineates four types of command leadership, using historical leaders as examples. He also believes that leadership styles have changed as military technology has altered the fighting environment. In the past, commanders were able to see the entire battlefield and directly controlled their unit’s actions while in combat. As technology progressed and units became larger, commanders became further removed from the field both in time and in space. Increasingly, they came to rely on subordinate leaders and communications devices to gather and disseminate information and orders.
Keegan’s first definition is that of heroic leadership, wherein the commander always leads from the front. Keegan equates this type of leadership with leadership from classical times, using Alexander the Great as the model. Keegan states that the nature of combat in classical times required the leader to not only command his units, but to lead them directly into battle. The psychology of heroic leadership then is being seen by your soldiers as willing to take the same risks and being personally involved in the act of fighting the opponent.
Second, anti-heroic leadership is defined as leading from the front when the situation requires it. Keegan takes the reader forward in time to the Napoleonic era, using Wellington as his model. From this standpoint, the commander is somewhat removed from the front line and immediate danger, observing the battle and managing his combat resources. However, in time of crisis, the anti-heroic leader does place himself at the front with his soldiers, both to inspire them and to lead them. In terms of leadership, we see that the anti-heroic commander uses situational leadership to dictate his position on the battlefield.
Un-heroic leadership is that style that never leads from the front, but directing others while maintaining an overarching view of the battlefield. Keegan attributes this style to Union general (and later President) Ulysses S. Grant. Grant, who has had a book on his leadership style published, is perhaps the archetype of today’s military leader: He does not draw attention to himself; is quietly professional; keeps his own counsel; remains in control of himself; makes the right decisions at the right times.
Finally, there is the false heroic model, which Keegan aptly describes as the style of Adolf Hitler: The leader who pretends to be heroic. Hitler’s leadership is perhaps not as uncommon as one would hope or prefer. The false heroic leader is the one who ignores the sound advice of experienced subordinates. He deludes himself into believing that nothing can stop his success; that his will, if only properly executed by his subordinates, can allow him to achieve his goals. Any failure of his plans is automatically blamed on disloyal or incompetent subordinates, rather than on the actions of his opponent or an unrealistic appraisal of existing resources.
Adolf Hitler’s leadership style has also been described as “pseudo transformational” (Bass, 1999, 19). This is largely because the tenets of National Socialism drew on a false image of the past and the supposed superiorities of the Aryan race. Hitler’s use of oratory to promulgate his ideas was an example of idealized influence; however, in this instance, it was used to promote genocide and racial hatred.
Keegan ends his work with a style for the nuclear era, defining the post-heroic leader in the terms of what we also know as the transformational leader. Keegan asserts that the introduction of nuclear weapons into warfare has further complicated the role of the politico-military leader. No more is the leader simply concerned with actions directly on the battlefield. Since the actions of those he leads could have catastrophic consequences for mankind, the leader must also consider the social and moral outcomes of his decisions.
Martin van Creveld asserts: “war consists of two independent wills confronting each other” (Van Creveld, 1985, 266). S.L.A. Marshall, the noted military theoretician and historian asserts in his critically acclaimed work, “Men Against Fire” that “when the chips are down, the main question is not how you go about your mission but whether it succeeds.” In addition, he notes that the “criterion of command is the ability to think clearly and work hard rather than to strike attitudes or accept disproportionate risk” (Marshall, 1978, 186). Martin Van Creveld echoes this sentiment, stating that any operations must be based on: “A clear definition of the objectives to be attained; thorough planning; and a proper order of priorities” (Van Creveld, 1987, 195). S.L.A. Marshall’s description of the art of leading is both situational and transformational: Leading “is the art of dealing with humanity, of working diligently on behalf of men, of being sympathetic with them, but equally of insisting that they make a square facing towards their own problems” (Marshall, 1978, 160).
A commander’s ability to leverage combat power against an opponent can only be accomplished provided that he has a reliable and redundant communications network through which he can issue orders, receive information, allocate and coordinate resources and request assistance from a higher echelon if needed.
S.L.A. Marshall succinctly sums up the importance of span of control when he says, “fire (combat power) and person-to-person communication are the twin essentials of successful minor tactics (generating) spontaneity of action (initiative) and reuniting of effort in the face of any battlefield emergency” (Marshall, 1978, 135). Van Creveld attributes the success of the Israeli Defense Force during the Arab-Israeli wars to “innovation during execution itself; discipline; and improvisation…” (Van Creveld, 1985, 185).
Further, the variable of combat multipliers has a positive effect on combat power. However, additional combat multipliers increase the commander’s requirements to coordinate the additional assets in order to leverage them as combat power. Friction has a damping effect because combat multipliers are usually assets outside of the commander’s immediate span of control and routine command channels.
Drew (2001) outlines the basic tenets of military transformational leadership. Essentially, leaders must understand how to best leverage available resources towards accomplishing the organization’s mission and priorities. Some of the variables inherent in mission accomplishment include the opponent’s operations, friction and the fog of war. How a commander leverages available resources against mission requirements is the definition of combat power.
A transformational military leader must communicate his vision and his will (or colloquially, the commander’s intent) to his soldiers. Soldiers do not want to be kept in the dark about their operations; they do not want to blindly follow their commander. Such ignorance is not only dangerous; it can have a devastating effect on morale. Further, in the absence of information, soldiers are likely to make up information just for something to talk about. S.L.A. Marshall comments that “When all else was obscure, just a little knowledge in the ranks would have been priceless to the higher commands” (Marshall, 1978, 141).
The transformational leader then understands that one of his goals is that of building and maintaining unit morale. As discussed above, morale is a qualitative, not quantitative commodity. S.L.A. Marshall, noting the soldiers fight for their comrades, not out of any sense of duty or responsibility to their country, asserts that “Battle morale comes from unity more than from all else and it will rise or fall in the measure that unity is felt by the ranks” (Marshall, 1978, 138).
A commander’s ultimate goal has more nuances than simply accomplishing his primary mission. Any military commander is ultimately fighting his opponent’s will and intentions, not just enemy forces. A successful commander is able to gather information, allocate resources, plan his operations and execute them. Planning does two things for a commander: First, the end result is a formal document that is disseminated to his subordinates which provides specific guidance, coordinating instructions and sub-unit missions. Second, and perhaps more importantly, is that it is a process by which the commander can approach his mission intellectually and war-game different Courses of Action before deciding on one. Further, it gives him the opportunity to think about ‘branches and sequels.’ This method of thinking permits him to war-game alternative operations based on his own losses and enemy operations. We understand then that the execution of our own plans is subject and thus variable to the enemy’s operations. As one military thinker puts it, “Moltke’s dictum (is) that plans should only go as far as the first clash with the enemy” (Van Creveld, 1985, 203).
This means that while planning is important, so is innovation and responding to the environment. In addition to being transformational, successful combat leaders are situational leaders. They can improvise, adapt and overcome. “He who relies on the situation uses his men in fighting as one rolls logs or stones” (Tzu, 1968, 95). The commander understands how best to use the resources available to him within the environment he operates in against the enemy opposing him.
Gibson and Pason contend that the most challenging issues in teaching leadership are the “cultivation of attitudes and ethical codes that allows for the proper application of the common skills and talents developed by the leadership programs” (Gibson & Pason, 2003, 23). They suggest that teaching organizational skills such as time management and proper use of resources are simple in comparison.
Experience and the literature indicates that the type of leadership exerted by business leaders is driven as much by the type of organization as it is by individual characteristic. Clausewitz emphasized the value of the leader’s moral strength, focused vision and intent of purpose as a means to success. “Detailed planning necessarily failed, due to the inevitable frictions encountered: chance events, imperfections in execution, and the independent will of the opposition. Instead, the human elements were paramount: leadership, morale, and the almost instinctive savvy of the best generals.” (Anonymous, 2002, 21)
Clausewitz (1832/1984) emphasizes the “great importance of superior numbers in an engagement and concomitantly, of superior numbers in general from the point of view of strategy” (p. 282). Rather than look simply at numbers, however, he also stresses the psychological importance of and contributory aspects of “courage and morale” as well as “superior organization and equipment” to an organization’s strength. (p. 282)
Clausewitz (1832/1984) could well be speaking about a business leader when he comments that: “…a general in time of war is constantly bombarded by reports both true and false; by errors arising from fear or negligence or hastiness; by disobedience of right or wrong interpretations, of ill will, of a proper or mistaken sense of duty, of laziness, or of exhaustion; and by accidents that nobody could have foreseen. In short, he is exposed to countless impressions, most of them disturbing, few them encouraging.” (p. 193)
The goal of any military intelligence analyst is to discern the capabilities and intention of the opposing military force. Military intelligence is the process by which information on an opponent is gathered, analyzed and disseminated towards that end. At both the tactical and strategic level, intelligence officers rely on a variety of resources to gather relevant information. The challenge is to be able to pull together indicators of intentions and warnings of potential actions. The end result is that the intelligence officer supplies his commander with the critical analysis of what the opponent might do and is likely to do under certain battlefield conditions.
Abels (2002) informs us that “Environmental scanning assesses the internal strengths and weaknesses of an organization in relation to the external opportunities and threats it faces” (p.16). A value of environmental scanning is that it helps business leaders manage change. “It is a way to capture information and turn it into knowledge that can be used in strategic planning” (Mafrica & Mason, 2003, 44). Hambrick (1981) defines environmental scanning as “the managerial activity of learning about events and trends in the organization’s environment… (p. 299).” Albright (2004) says that “Environmental scanning is the internal communication of external information about issues that may potentially influence an organization’s decision making process” (p. 40). Drew (2001) emphasizes the importance of understanding your own organization’s “disabilities, limitations and vulnerabilities” (p. 26). Saxby, Parker, Nitse & Dishman (2002) comment that: “Environmental scanning allows managers in the organization to become instantly aware of environmental factors that could significantly influence the organization and its strategic direction” (p. 28).
The commonality with these definitions is that an organization must gather, analyze and apply the information gathered about its internal and external influences in order to make educated decisions regarding business strategy. Hough & White suggest that there is a cycle to the collection, analysis and dissemination of business information, which is nearly exactly the intelligence cycle in the military: “However, each time an organization takes action, the environment is changed. "Thus begins a cycle of organizational adaptation, information gathering, interpretation and adaptation” (p. 781). Most of the time, business managers are more concerned with what their competitors are capable of doing. Ultimately, the goal of environmental scanning is to “…assist management efforts by providing analyst(s) and decision makers with a more complete set of information, making it possible for them to assess issues in an efficient, accurate and timely manner” (Nitse, Parker & Dishman, 2003, 269) Military commanders and business leaders understand that candid, internal assessments can help focus an organization’s vision and resources towards the stated objectives.
Clausewitz on Environmental Scanning
As stated above, according to Clausewitz (1832/1984), the leader must deal with the unknown constantly, not just about his own forces (friction), but about his opponent (fog): He is “constantly bombarded by reports both true and false.” (p. 193) Clausewitz (1832/1984) seemingly dismisses intelligence gathering and reporting when he comments that “Many intelligence reports in war are contradictory; even more are false, and most are uncertain” (p. 117). However, his point is that the commander must be able to make his decisions with that understanding of the limits of the available intelligence. Abels (2002) echoes this sentiment: “The kind and quality of the information reaching the decision makers is one important factor influencing the organization’s success in dealing with the environment” (p. 17). Clausewitz (1832/1984) points to the importance of experience and the ability to stay focused when under pressure when he says: “Long experience of war creates a knack of rapidly assessing these phenomena; courage and strength of character…” help see him through the crisis. (p. 193)
While Clausewitz (1832/1984) takes a dim view of intelligence, in Book Two, Chapter Eight, he discusses the importance of the leader’s knowledge of the environment: “…he must be familiar with the higher affairs of state and its innate policies; he must know current issues, questions under consideration, the leading personalities and be able to form sound judgments.” (p. 146) Abels (2002) echoes this sentiment when she comments: “An environmental scan will always include continual and predictable events that require constant surveillance, such as competitors in the industry, products and product development, regulations, new technologies, and economic and social conditions nationally and globally” (p. 17).
Clausewitz (1832/1984) goes on to comment that: “Continual change and the need to respond to it compels the commander to carry the whole intellectual apparatus of his knowledge within him.” (p. 147) Of importance, is that Clausewitz (1832/1984) points to what he terms “a serious source of friction in war” that of “accurate recognition” or perception of the organizational environment. (p. 117) Albright (2004) highlights the importance of “…the identification and understanding of complex issues facing the organization” (p. 40). Interestingly enough, Clausewitz (1832/1984) points out that: “As a rule, most men would rather believe bad news than good, and rather tend to exaggerate the bad news” (p. 117). This again highlights the importance of correctly estimating environmental fog and friction. Albright (2004) touches on the problems of fog when she comments that: “Environmental scanning helps an organization for a strategic position from which it can address external factors over which it has little, if any, control” (p. 40).
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