201. organizational appraisal

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Organizational Dynamics &

Organizational Appraisal

Strategic Management



Strategic Management Process

Establish

Strategic

Intent

Strategic

Evaluation

& Control

Implement

Strategies

Formulate

Strategies



Environmental & Resource Analysis

Environmental

Analysis

Industry

Analysis

Competition

Analysis

Organizational

Analysis



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.



• Its Complex.

• Its Dynamic.

• Multi-Faceted.• It has far reaching impact.

• It Includes both

– Internal as well as External aspects.

Characteristics of Environment



Environmental Factors

External

Environment

Economic Socio-Cultural

Political

Legal Technological

International

Internal

Environment

Organizational Marketing aspect

Financial aspects

Personnel aspects Production aspects

Managerial aspects



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



Organizational Dynamics & Strategic

Advantage

OrganizationalResources

Organizational

Behavior

Strengths

& Weaknesses

Synergistic

Effects

CompetenciesOrganizational

Capability

Strategic

Advantage



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.



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.



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.



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.



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.



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.



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.



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.



Organizational Capability Factors

• Financial capabilities.

• Marketing capabilities.

• Operations capabilities.

• Personnel capabilities.

• Information Management capabilities.

• General Management capabilities.



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

201. organizational appraisal

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