To cope with increasing competition in the 1960s, managers started to transpose military practices to business. This chapter is a literature review about the systems, processes, tools and practices used by companies to monitor what happens in their environment. Initially, control systems aimed at measuring various internai indicators of the firm's performance to take timely corrective actions. In a globalized world that is changing quickly, the controlling paradigm is facing limits and firms need not just to implement their strategy but also to adapt it. In parallel to the control literature, a wide and rather unstructured stream of research rose to describe and predict the state of the environment. How these studies inform practice remains inconclusive. Through the contingency theory of the firm, we call for more research on the systems, processes, tools and practices for environment monitoring and on the association between monitoring intensity and innovativeness of firms.
Chapter 2: Monitoring the Environment: A Multiple Case Study
The purpose of this chapter is to study how companies monitor their environment. To keep their strategy aligned with market conditions, companies need to have a clear idea of trends and potential changes occurring in their environment. Relying on structured interviews with top and middle managers of two organizations, we explored how these managers defme their environment and process data about it to make stratégie décisions.
We observed that environment monitoring is only partially formalized and structured. The différent practices and tools, however, make the Company better informed about the ongoing changes. Four main lessons emerged. First, top management increases its involvement as soon as the situation becomes particularly urgent. Second, when the legitimacy of the strategy is at stake, the diversity of people reflecting on the issue increases. Third, information channels are more structured and disciplined when assessing the power (nuisance capacity) of an actor of the environment. Finally, environment monitoring intensity tends to be positively associated with the company's efforts to innovate.
Chapter 3: Déterminants of Environment Monitoring Intensity and its
Impact on Firm's Innovativeness
Environment monitoring is essential to accurately and timely detect opportunities and threats. This survey-based study on managerial and organizational systems, tools and practices explores the déterminants of environment monitoring and its impact on innovativeness. We observe that a wide involvement of people, a disciplined and structured information sourcing process, as well as a top management team focus, are positively associated with environment monitoring intensity. Conversely, performance measurement systems such as the Balanced Scorecard are not associated with environment monitoring intensity. We also observe a positive association between the environment monitoring intensity and innovativeness of companies.