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Organisational AppraisalDynamics Of Internal EnvironmentOrganisational Resources Organisational Behaviour Strength & Weaknesses Competencies Organisational Capability Strategic competitive AdvantageOrganisational Capability FactorsOrganisational capability factors are the strategic strengths and weaknesses existing in different functional areas within an organisation ,which are of crucial importance to strategy formulation and implementation.Functional/Capability Areas IncludeFinacia
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Organisational Appraisal
Dynamics Of Internal Environment
Organisational ResourcesOrganisational BehaviourStrength & Weaknesses
CompetenciesOrganisational Capability
Strategic competitive Advantage
Organisational Capability Factors
Organisational capability factors are the strategic strengths and
weaknesses existing in different functional areas within an
organisation ,which are of crucial importance to strategy formulation
and implementation.
Functional/Capability Areas Include
Finacial CapabilityMarketing CapabilityOperations CapabilityPersonnel Capability
Information Management CapabilityGeneral Management Capability
Financial Capability
Relates to the availability ,usages and management of funds and all allied aspects that have a bearing on Organisation’s capacity and
ability to implement its strategies.
Factors influencing Financial Capability
Related to sources of Funds: Capital Structure , Procurement of capital,
Working capital etc.Related to usage of Funds:
Capital investment,current assets,relationship with shareholders etc.
Related to Management of funds:Financial Accounting and Budgeting
systems,management control,Tax olanning etc.
Marketing Capability
Relates to the pricing, promotion & distribution of products &
services,and all allied aspects that have a bearing on Organisation’s
capacity and ability to implement its strategies.
Factors influencing Marketing Capability
Product related factors:Variety,differentiation, mix quality,
positioning,packaging etc.Price related factors:
Pricing objectives,policies,changes.etcPlace related factors:
Distribution,logistics & transportation etc.Promotion related factors:
Promotional tools,sales promotion,advertising etc.
Operations Capability
Relate to the production of products,use of material resources
and all allied aspects that have a bearing on Organisation’s capacity
and ability to implement its strategies.
Factors influencing Operations Capability
Related to the Production system:Capacity,location,layout,product design
etc.Related to operations & control:
Aggregate production planning,material supply etc.
Related to R&D system:Personnel facilities,product
development,patent rights etc.
Personnel Capability
Relate to the existence & use of human resources & skills, and all
allied aspects that have a bearing on Organisation’s capacity and ability to
implement its strategies.
Factors influencing Personnel Capability
Related to Personnel system:System for manpower
planning,selection,development,compensation etc.
Related to Organisational & Employee characterstics:
Corporate image,quality of managers,working conditions etc.
Related to Industrial Relations:Collective bargaining,Safety,welfare & security
Information Management Capability
Related to design & management of flow of information from outside
into,and within an organisation for the purpose of decision making and all allied aspects that have a bearing
on Organisation’s capacity and ability to implement its strategies.
Factors influencing IM CapabilityFactors related to acquistion & retention of
Information:Sources,quantity,quality & timeliness of
information.Factors related to processing of information:Database management,computer system &
software capability.Factors related to retreival & usage of
Information:Availability & appropriateness of
information formats.
Considerations in Organisational Appraisal
Factors affecting Organisational Appraisal
The Size of the organisation affects the quality of appraisal.
If the internal environment of an organisation is vitiated owing to opposing political forces &
power games,the quality of appraisal is likely to suffer.
Approaches
Systematic ApproachAdhoc Approach
Sources of Information
VerbalWrittenInternalExternal
Method & techniques for OA
Internal AnalysisVRIO framework
QuantitativeQualitative
Internal Analysis
Internal analysis of an organisation deal with an investigation into its
strengths and weaknesses by focusing on factors that are specific
to it
1. VRIO FRAMEWORK
VRIO stands for-
V- ValuableR- RareI- InimitableO- Organised For Usage
QUANTITATIVE ANALYSIS
• Quantiative analysis are the financial figures which are most often used for performance evaluation, as well as assessment of strengths and weaknesses.
• Financial Analysis
• Non-Financial Analysis
QUALITATIVE ANALYSIS
A quantitative analysis has to be tempered with qualitative analysis. Such a analysis is based on information opinion, judgement, intuition or hunch
COMPARATIVE ANALYSIS
HISTORICAL ANALYSIS: Historical analysis is to compare own performance and identify strengths and weaknesses over the period of time.
INDUSTRY NORMS:• The industry to which the business belongs is
the most obvious choice for comparison with regard to a wide range of parameters.
BENCHMARKING:The process of benchmarking is aimed at finding
the best practices within and outside the industry to which an organization belongs.
When one is interested in finding out what is to be compared then there are three types of benchmarking:
a) Performance benchmarkingb) Process benchmarkingc) Strategic benchmarking When one is interested in finding out against
whom to compare oneself then there are four types of benchmarking
a) Internal benchmarkingb) Competitive benchmarking c) Functional benchmarkingd) Generic benchmarking
COMPREHENSIVE ANALYSIS
Two Popular Methods:-
1. Balance Scorecard
2. Key Factor Rating
1. BALANCE SCORECARD
Proposed By Robert S Kaplan & David P NortonThe balanced scorecard is a strategic planning
and management system that is used extensively in business and industry, government, and non-profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.
The balance scorecard identifies four key performance measures
2. KEY FACTOR RATING Many systems have been evolved to assess
organisational strengths and weaknesses. These systems are based on rating, depending on a number of key factors, each of which is analysed on the basis of a series of thoughtful questions. A detailed study of the areas covered by these questions leads to a reliable appraisal of an organisation.
If we consider different factors under various headings of functional capability, the questions that can be asked with regard to these different areas are:-
• For Financial Capability Factors:1.Question related to sources of funds.2.Question related to usage of funds.3.Question related to management of funds
For Marketing Capability Factors:
1. Questions related to product or services.2. Questions related to price.3. Question related to promotion
For Operations Capability Factors:1. Questions related to the personnel system.2. Questions related to organisational and
employee characterstics3. Questions related to industrial relations.
• For Information Management Capability Factors:
1. Question related to acquisition and retention of information.
2. Questions related to processing and synthesis of information.
3. Question related to retrieval and usage of information.
4. Question related to transmission and dissemination.
• For General Management Capability
1. Questions related to the general management system.
2. Questions related to general managers.3. Questions related to external relationships.4. Questions related to organisational climate Once the strategists answers the questions
above, they are in position to pinpoint the strategic strengths and weaknesses in each of the functional area. On this basis, organisational capability can be judged.