Scanning the periphery

Companies often face new rivals, technologies, regulations, and other environmental changes that seem to come out of left field. How can they see these changes sooner and capitalize on them? Such changes often begin as weak signals on what the authors call the periphery, or the blurry zone at the edge of an organization's vision. As with human peripheral vision, these signals are difficult to see and interpret but can be vital to success or survival. Unfortunately, most companies lack a systematic method for determining where on the periphery they should be looking, how to interpret the weak signals they see, and how to allocate limited scanning resources. This article provides such a method-a question-based framework for helping companies scan the periphery more efficiently and effectively. The framework divides questions into three categories: learning from the past (What have been our past blind spots? What instructive analogies do other industries offer? Who in the industry is skilled at picking up weak signals and acting on them?); evaluating the present (What important signals are we rationalizing away? What are our mavericks, outliers, complainers, and defectors telling us? What are our peripheral customers and competitors really thinking?); and envisioning the future (What future surprises could really hurt or help us? What emerging technologies could change the game? Is there an unthinkable scenario that might disrupt our business?). Answering these questions is a good first step toward anticipating problems or opportunities that may appear on the business horizon. The article concludes with a self-test that companies can use to assess their need and capability for peripheral vision.     

Growth and the Environment in Canada: An Empirical Analysis

Standard reduced-form models are estimated for Canada to examine the relationships between real per capita gross domestic product and four measures of environmental degradation. Of the four chosen measures of environmental degradation, only concentrations of carbon monoxide appear to decline in the long run with increases in real per capita income. The data are also tested for the presence of unit roots and for the existence of cointegration between each of the measures of environmental degradation and per capita income. ADF and Phillips-Perron tests indicate unit roots in the logs of the measures of all variables. The Engle-Granger test and Johansen's maximum eigenvalue test suggest that a long-term relationship between per capita income and the measures of environmental degradation does not exist. Causality tests also indicate bidirectional causality, not unidirectional causality, from income to the environment. The results suggest that Canada does not have the luxury of being able to grow out of its environmental problems. The implication is that to prevent further environmental degradation, Canada requires concerted policies and incentives to reduce pollution intensity per unit of output across sectors, to shift from more to less pollution-producing outputs and to lower the environmental damage associated with aggregate consumption.     

EXPERTISE AND PROBLEM CATEGORIZATION: THE ROLE OF EXPERT PROCESSING IN ORGANIZATIONAL SENSE-MAKING

Our purpose is to understand more fully the role of managerial cognition in organizations. As such, we adopted an experimental approach in studying the use of expert processing in the categorization of organizational problems. We compared the problem categories of 38 chief executive officers (CEOs) in the machine tool industry (experts) with those of 30 MBA students (novices). The results of a problem sorting task indicated that experts tended to categorize the ill-structured problems significantly faster than novices. Experts also had greater variance in the number of categories used and they incorporated more problem information. Follow-up analyses revealed that the number of categories was negatively related to experts’age and positively related to the number of processes and services offered by their respective organizations. These findings are consistent with the contention that experts rely on well-developed, context-dependent heuristics in the early stages of their decision-making. It is argued that such heuristics allow organizational experts to make sense of strategic issues quickly, and respond in an efficient and effective manner.     

ON INTERNAL MARKETS IN THE N.H.S.

Professor Alain Enthoven has suggested the development of 'internal markets' in the NHS Patricia Day and Professor Rudolf Klein, of the University of Bath, argue for the encouragement of latent potential within the NHS Nick Bosanquet, of the University of York, reinforces their call for increased managerial discretion to improve efficiency Dr David Green, of the IEA, insists that commercial incentive will have a more bracing effect than continued government control