Environmental Scanning: Acquisition and Use of Information by CEOs in the Canadian Telecommunications Industry

PhD Dissertation (1993)
Chun Wei Choo
Faculty of Information Studies
University of Toronto

Thesis Committee:
Ethel Auster (Supervisor)
Joan Cherry
Andrew Clement
Jeffrey Katzer (External assessor)

ABSTRACT

The present study investigates how chief executive officers in the Canadian telecommunications industry acquire and use information about the external business environment, an information seeking activity known as environmental scanning. Data were collected by a nationwide questionnaire survey and several focused interviews. Of the 113 CEOs in the study population, 67 returned completed questionnaires, thus giving a response rate of 59 percent. Personal interviews were then conducted with eight of the respondents.

The chief executives collectively perceive the Technological, Customer, and Competition environmental sectors to have the greatest Perceived Strategic Uncertainty - these sectors were perceived to be the most strategic, variable and complex. For each environmental sector, the Amount of Scanning of the sector is positively correlated with the Perceived Strategic Uncertainty of that sector.

Generally, the chief executives use multiple, complementary sources in environmental scanning. Personal sources such as customers and subordinate staff are very important in both scanning and decision making, and they are used more frequently than impersonal sources. Nonetheless, impersonal sources such as publications and reports are also frequently used in scanning. In decision making, environmental information from internal sources is used more frequently than that from external sources. For many of the information sources, the frequency of source use is positively correlated with Perceived Source Accessibility, Perceived Source Quality, and Perceived Environmental Uncertainty. However, among these three variables, it is Perceived Source Quality that accounts for most of the variance of the frequency of source use. This appears to contradict past research and extant theory. We suggest that the turbulence of the external environment, the strategic role of scanning, and the special character of the information use contexts of managers, help to explain why information quality is more important.

The chief executives use environmental information frequently in the four decisional roles of Entrepreneur, Resource Allocator, Disturbance Handler, and Negotiator. Furthermore, the executive who scans more is likely to use environmental information more frequently in the Entrepreneur decisional role; while the executive who perceives a higher level of Perceived Environmental Uncertainty is likely to use environmental information more frequently in the Negotiator decisional role.

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