This chapter described the second half of the organization-environment interaction system. For the international manager, the environment consists of the interplay between humans and their natural habitats. Understanding the environment and its impact on MNCs' present and future survival requires that the international manager first comprehend the physical world which is the life support system of the humans who occupy it.
Under the heading Macroenvironment the chapter first described the physical world in terms of its resource-supplying capabilities (ability to supply food, minerals, energy, and oil) and its waste-carrying capacities (ability to absorb pollution). The human element of the macroenvironment was then discussed in terms of both its quantitative aspects and its cultural dimension.
The microenvironment is a particular organization's external business environment. In order to effectively assess the macroenvironment's potential impact on the organization, the manager must narrow his or her focus to the microenvironment. The recommended method of assessing the microenvironment, which will be used in subsequent chapters, is environmental scanning (ES). The environmental scanning approach to assessing the environment offers many advantages. It forces the international manager not only to keep an eye on developments that take place in the environment but also to try to evaluate them and incorporate the results of this evaluation into the strategic planning of the corporation. In addition, unlike the conventional approach of purchasing an environmental report and "plugging it into" the strategic-planning process, environmental scanning motivates the manager to become personally involved in the assessment, thereby becoming more knowledgeable.
Recent advances in artificial intelligence have allowed the development of systems that mimic and to some extent replicate the decision-making process of experts. The ENSCAN Assistant Expert System described in this chapter provides the international manager with a simple but adequate method for understanding and assessing the environment. The system uses issues management, a conceptual framework developed by corporate planners and public affairs officers of some of the world's largest and most progressive corporations.
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