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7/30/2019 201. Organizational Appraisal
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Organizational Dynamics &
Organizational Appraisal
Strategic Management
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Strategic Management Process
Establish
Strategic
Intent
Strategic
Evaluation
& Control
Implement
Strategies
Formulate
Strategies
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Environmental & Resource Analysis
Environmental
Analysis
Industry
Analysis
Competition
Analysis
Organizational
Analysis
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Environmental Analysis
• The environment of the business is the
aggregate of conditions, events and
influences that surround and affect it.
• Environment literally means the
surroundings, external objects, influences,or circumstances under which someone or
something exists.
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• Its Complex.
• Its Dynamic.
• Multi-Faceted.• It has far reaching impact.
• It Includes both
– Internal as well as External aspects.
Characteristics of Environment
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Environmental Factors
External
Environment
Economic Socio-Cultural
Political
Legal Technological
International
Internal
Environment
Organizational Marketing aspect
Financial aspects
Personnel aspects Production aspects
Managerial aspects
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Industry & Competitive Analysis
Potential
Entrants
Buyers Suppliers
Substitutes
Industry Competitors
Rivalry
Organizations
Threat of
New Entrants
Bargaining power of
buyers
Bargaining
power of
suppliers
Threat of
substitute
products
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Organizational Dynamics & Strategic
Advantage
OrganizationalResources
Organizational
Behavior
Strengths
& Weaknesses
Synergistic
Effects
CompetenciesOrganizational
Capability
Strategic
Advantage
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Organizational Resources
• A firm is a bundle of resources…
– Tangible & Intangible.
• These resources can be classified as -
Physical, Human & Organizational.
• The cost & availability of resources are the most important aspects on which the
success of any organization depends.• But its not only the possession, it’s the
utilization that makes an organization
capable.
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Organizational Behavior
• Organizational behavior is the manifestation of various forces & influences operating within the environment of an organization.
• It leads to the development of a special identity & characteristics of an organization.
•
The forces includes – Quality of Leadership,management philosophy, values & culture,work environment, politics, use of power and organizational climate as a whole.
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Strengths & Weaknesses
• Organizational Resources & Behavior
combines to create Strengths & Weaknesses.
–
Strength is an inherent capability that can be used to gain Strategic Advantage.
– Weakness is an inherent limitation that creates
strategic disadvantage.
• Strength & Weaknesses combines across the
functional areas to create synergistic effects.
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Synergistic Effects
• A situation where attributes do not add mathematically but combine to produce an enhanced or a reduced effect.
• Synergy is the idea that the whole is a greater or lesser than the sum of its parts.
[2 + 2 = 5]
• These synergy or dysergy (negative synergy) lead to the development of competencies.
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Competencies
• These are the special qualities possessed by an organization that make them withstand pressures of competition in the marketplace.
• The net results of the strategic advantages and disadvantages that exist for an organization determines its ability to
compete with its rivals.• These are the Unique resources, core
capabilities, embedded knowledge.
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Competencies
• The capability to use the competencies
exceedingly well turns them into
“Core - Competencies”
• Any specific ability possessed by a
particular organization exclusively, is called a distinctive competence.
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Organizational Capability
• It is the inherent capacity or potential of an organization to use its strengths & overcome its weaknesses in order to exploit
opportunities & face the threats in its external environment.
• As an attribute it’s the sum total of
resources, behavior, strengths & Weaknesses, synergistic effects & competencies of an organization.
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Strategic Advantage
• These are the outcomes of the capabilities.
• These are the results of organizational activities in terms of financial & non- financial parameters.
• Strategic advantages of an organization are comparable in terms of performance with
respect to its competitors
• Strategic Advantages leads to competitive Advantage.
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Organizational Capability Factors
• Financial capabilities.
• Marketing capabilities.
• Operations capabilities.
• Personnel capabilities.
• Information Management capabilities.
• General Management capabilities.
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Methods for
Organizational
Appraisal
Internal
Analysis
Comparative
Analysis
Comprehensive
Analysis
Value Chain Analysis
Historical Analysis
Balanced Scorecard
Quantitative
Analysis
Industry
Norms
Key Factor
Rating
Qualitative
Analysis Benchmarking