ENVIRONMENTAL SCANNING: ACQUISITION AND USE OF INFORMATION BY CHIEF ...

282 Pages·2003·2.46 MB·English

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ENVIRONMENTAL SCANNING:
ACQUISITION AND USE OF INFORMATION BY CHIEF EXECUTIVE OFFICERS
IN THE CANADIAN TELECOMMUNICATIONS INDUSTRY
by
Chun Wei Choo
A thesis submitted in conformity with the requirements
for the degree of Doctor of Philosopy
Faculty of Library and Information Science
University of Toronto
© Copyright by Chun Wei Choo (1993)
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ENVIRONMENTAL SCANNING: ACQUISITION AND USE OF INFORMATION
BY CEOS IN THE CANADIAN TELECOMMUNICATIONS INDUSTRY
PhD Dissertation (1993)
Chun Wei Choo
Faculty of Library and Information Science
University of Toronto
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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ACKNOWLEDGEMENTS
First and foremost, I am extremely grateful to my thesis supervisor, Professor Ethel
Auster. She has guided this research with a sure hand, drawing deeply upon her wealth
of experience as an eminent researcher of the field, and always exercising an unerring
judgement of what differentiates a good research endeavour from a mediocre attempt.
No doctoral student could have wished for a more dedicated or helpful faculty advisor.
I am very grateful for the advice and assistance that I have received from the members
of my dissertation committee, Professor Joan Cherry and Professor Andrew Clement.
They have spent many hours reading and thinking about this research, and have
helped to add clarity and rigor to the analysis, interpretation, and presentation of its
findings.
I also wish to thank the dean and faculty of the Faculty of Library and Information
Science for providing a warm and supportive environment for this research to develop.
Thanks must be given to all the sixty seven chief executive officers who participated in
this research, especially to the eight who were interviewed. Anonymity prevents me
from naming the chief executives individually, but without their unselfish cooperation
this research would not have been possible.
Last but certainly not least, I salute the understanding and support shown by my wife
and two daughters, who often saw little of me during days when “daddy was busy at
school.”
This research is funded by a doctoral fellowship (award no. 753-91-0073) and by a
research grant (file no. 410-91-0065), both from the Social Sciences and Humanities
Research Council of Canada. This study is a component of a larger, ongoing study
sponsored by SSHRCC on environmental scanning by top-level managers in Canadian
industries.
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TABLE OF CONTENTS
ABSTRACT i
ACKNOWLEDGEMENTS ii
LIST OF TABLES viii
LIST OF FIGURES x
Chapter Page
1 INTRODUCTION 1
1.1 Background to the Problem 1
1.2 Purpose of the Study 3
1.3 The Nature of Environmental Scanning 7
1.4 The Canadian Telecommunications Industry 11
1.5 Significance of the Study 14
2 REVIEW OF THE LITERATURE 17
2.1 Organizations and Environments 17
Environment as source of information 17
Environment as source of resources 20
Environment as source of variation 22
Summary 23
2.2 Organizational Information Processing 23
Organizations as information processing systems 23
Organizations as decision making systems 25
Organizations as interpretation systems 26
Summary 27
2.3 Information Needs and Uses 28
Engineers and scientists as information users 28
Social scientists as information users 32
Summary 34
2.4 Managers as Information Users 37
Managerial roles 37
Information acquisition and use by managers 39
Summary 46
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2.5 Research on Environmental Scanning 46
Early studies 46
Recent research 51
Summary 60
2.6 Synthesis of Principal Findings and Variables 64
3 METHODOLOGY 69
3.1 Conceptual Framework 69
3.2 Research Hypotheses 71
3.3 Definition and Measurement of Variables 78
Environmental sectors 79
Perceived Environmental Uncertainty 80
Information sources 82
Perceived Source Accessibility 83
Perceived Source Quality 85
Amount of Scanning 87
Use of sources in scanning and decision making 89
Use of environmental information in decision making 90
Validity and reliability 92
3.4 Study Population 95
3.5 Data Collection Methods 98
Rationale 98
Preliminary consultations 100
Survey methodology 101
Pilot survey 103
Main survey 104
Interview methodology 106
Social desirability bias 111
3.6 Analysis of Data from Mail Questionnaire 111
Descriptive statistics 111
Hypotheses testing 113
3.7 Analysis of Data from Personal Interviews 116
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4 RESULTS OF MAIL QUESTIONNAIRE 119
4.1 Profile of Questionnaire Respondents 120
Representativeness of the questionnaire respondents 122
Number of questionnaire respondents 123
4.2 Perception of Environmental Sectors 125
4.3 Perceived Strategic Uncertainty and Amount of Scanning 127
Testing of Hypothesis 1 130
Influence of firm size 132
4.4 Perception of Information Sources 133
Perceived Source Accessibility 133
Perceived Source Quality 137
4.5 Use of Information Sources in Scanning 141
4.6 Influence of Environmental and Source Characteristics on
Source Usage in Scanning 144
Testing of Hypothesis 2 145
Testing of Hypothesis 3 145
Testing of Hypothesis 4 146
Testing of Hypothesis 5 149
4.7 Use of Information from Sources in Decision Making 153
4.8 Influence of Environmental and Source Characteristics on
Usage of Information from Sources in Decision Making 155
Testing of Hypothesis 6 155
Testing of Hypothesis 7 156
Testing of Hypothesis 8 157
Testing of Hypothesis 9 160
Checking for multicollinearity 164
4.9 Use of Environmental Information in Decision Making 166
Testing of Hypothesis 10 168
Testing of Hypothesis 11 169
4.10 Summary of Mail Questionnaire Results 171
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5 RESULTS OF PERSONAL INTERVIEWS 176
5.1 Purpose of Interviews 176
5.2 Profile of Interview Respondents 177
5.3 Scanning Behaviours and Critical Incidents 179
Supplier of financial information and networks 180
Cable television operator/paging company 182
Data communications equipment supplier 185
Network analysis and testing products manufacturer 188
Telecommunications components manufacturer 190
Long distance telecommunications reseller 192
Switching equipment manufacturer 195
Data network services vendor 200
5.4 Analysis of Critical Incidents 203
5.5 Relative Importance of Accessibility and Quality 210
5.6 Role and Use of the Company Library 214
5.7 Use of Online Databases 219
5.8 Summary of Personal Interviews 222
6 DISCUSSION OF RESULTS 229
6.1 Perception of Environmental Sectors 230
6.2 Influence of Perceived Strategic Uncertainty on
Amount of Scanning 231
6.3 Use of Personal Sources 233
6.4 Use of Impersonal Sources 235
6.5 Use of Internal and External Sources 239
Informational boundary spanning 239
Uncertainty absorption 240
6.6 Influence of Perceived Source Characteristics on Source Use 242
Perceived Source Quality and decision making 242
Perceived Source Quality and environmental scanning 244
6.7 Influence of Perceived Environmental Uncertainty 254
6.8 Use of Environmental Information in Decisional Roles 256
6.9 Summary of Discussion 259
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7 CONCLUSION 262
7.1 Highlights of the Study 262
7.2 Implications for Management 264
7.3 Implications for Library and Information Science 269
7.4 Implications for Executive Information Systems 274
7.5 Limitations of Present Study 277
7.6 Recommendations for Further Research 279
7.7 Conclusion 281
REFERENCES 284
APPENDIX A: Mail Questionnaire 301
APPENDIX B: Mail Questionnaire Covering Letters 315
APPENDIX C: Interview Schedule 319
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LIST OF TABLES
Table Page
1.1 Canadian Telecommunications Industry 12
4.1 Size of Questionnaire Respondent Firms 121
4.2 Profile of Questionnaire Respondents 121
4.3 Comparison of Questionnaire Respondents
and Study Population by Firm Size 122
4.4 Comparison of Questionnaire Respondents
and Study Population by Geographical Location 123
4.5 Perceived Importance, Variability, and Complexity
of Environmental Sectors 126
4.6 Perceived Strategic Uncertainty of Environmental Sectors 127
4.7 Histogram of Respondents Indicating Frequency of Information
about the Environment Coming to Their Attention 128
4.8 Amount of Environmental Scanning 129
4.9 Amount of Time Spent on Environmental Scanning 130
4.10 Correlations between Perceived Strategic Uncertainty and
Amount of Scanning 132
4.11 Perceived Source Accessibility (PSA) 134
4.12 Rank Order of Sources according to
Mean Perceived Source Accessibility (PSA) 135
4.13 Source Categories 136
4.14 Perceived Source Accessibility by Source Category 137
4.15 Perceived Source Quality (PSQ) 139
4.16 Rank Order of Sources according to
Mean Perceived Source Quality (PSQ) 140
4.17 Perceived Source Quality by Source Category 141
4.18 Histogram of Respondents Indicating Frequency of
Using Information Sources in Environmental Scanning 143
4.19 Frequency of Using Source in Scanning by Source Category 144
4.20 Correlations between Perceived Source Accessibility,
Perceived Source Quality, Perceived Environmental Uncertainty,
and Frequency of Using Source in Scanning 147
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4.21 Correlations between Perceived Environmental Uncertainty
and Frequency of Using Source in Scanning by Source Category 149
4.22 Regressions to explain Frequency of Using Source in Scanning
based on Perceived Source Accessibility, Perceived Source Quality,
and Perceived Environmental Uncertainty 151
4.23 Rank Order of Sources according to Frequency of Using
Information from Source in Decision Making 154
4.24 Frequency of Using Information from Source
in Decision Making by Source Category 155
4.25 Correlations between Perceived Source Accessibility,
Perceived Source Quality, Perceived Environmental Uncertainty,
and Frequency of Using Information from Source in
Decision Making 158
4.26 Correlations between Perceived Environmental Uncertainty
and Frequency of Using Information from Source in
Decision Making by Source Category 159
4.27 Regressions to explain Frequency of Using Information
from Source in Decision Making based on
Perceived Source Accessibility, Perceived Source Quality,
and Perceived Environmental Uncertainty 162
4.28 Frequency of Using Environmental Information
in Decision Making 168
4.29 Correlations between Total Amount of Scanning and
Frequency of Using Environmental Information
in Decision Making 169
4.30 Correlations between Perceived Environmental Uncertainty and
Frequency of Using Environmental Information
in Decision Making 170
4.31 Summary of Results of Hypotheses Testing 171
5.1 Profile of Interview Respondents 178
5.2 Summary of Critical Incidents 204
6.1 Most Frequently Used Sources in Environmental Scanning
and Decision Making 233