Review Questions: Describe the three-step process that managers use to make sense of their changing environments.

• Interpreting environmental factors:

Managers determine what these environmental events and issues mean to the organization. These events could present either threats to or opportunities for the organization.

• Environmental scanning

: Managers search the environment for important events or issues that might affect an organization. This allows managers to stay up-to-date on important industry factors and to reduce uncertainty.

• Acting on threats and opportunities

Managers can protect themselves against competition or capture strategic opportunities.