Which of the following best describes environmental scanning?

Environmental scanning is best defined as a comprehensive analysis of both internal and external environments. This process involves gathering and analyzing information about the macro and micro factors that can affect an organization. It enables organizations to identify opportunities and threats in their operational landscape, which allows for strategic planning and decision-making.

This inclusive approach is essential because it recognizes that an organization does not operate in a vacuum; it is influenced by various external factors such as economic trends, regulatory changes, and competitive dynamics, as well as internal factors like organizational culture, resources, and capabilities.

The other options highlight narrower scopes that do not fully capture the essence of environmental scanning. For instance, a systematic approach to evaluating internal factors focuses only inward, overlooking external influences that can significantly impact an organization. Similarly, data collection exclusively from external sources misses the vital internal aspects that contribute to an organization's performance. Focusing solely on compliance with legal regulations neglects the broader strategic context that environmental scanning encompasses, which goes beyond just regulatory adherence to include various elements of the business environment.