The environmental scanning practices of US multinationals in the late 1980's

Multinational Corporations (MNCs) are faced with increasing levels of uncertainty and complexity in their multiple and geographically dispersed operating environments. This turbulence is often manifested in widely fluctuating currencies, new demands by host country governments and publics, as well as, political revolution, terrorist attacks on executives, and expropriation by host countries. In order to better predict and plan for sudden changes in business conditions, MNCs must develop systematic environmental assessment procedures. While the need for such procedures is well recognized, earlier
studies suggest that MNCs vary widely in the extent to which they have developed systematic approaches and in-house capabilities for determining political risks, the effects of technological changes and social developments, economic trends, etc., in the highly competitive global environment in which they operate (e.g. Keegan, 1974; Ring-bakk, 1976; O'Connell and Zimmerman, 1979; Kobrin, Basek, Blank and La Palombara,1980; Kennedy, 1984). The present study focusses on the environmental assessment activities of U.S. headquartered multinational firms. Of particular interest to the study
were: the extent of sophistication reached by mid-1987 with respect to multinational scanning systems, the relative importance of the major types of environmental variables (including risk) that need to be regularly scanned, and the principal sources of information that are currently being relied upon. This will indicate current MNC scanning practices, rather than what has been strongly advocated in the prescriptive literature.