VIJAYA,
HERE ARE ANSWERS FOR Q1/Q2/Q3
other answers are held back due to space constraint.
please send the Qs to my email id
[email protected]
I will send the answers back asap.
regards
LEO LINGHAM
=======================
1. Describe any three organizational structures and their advantages and limitations. Illustrate with reference to an organization you are familiar with how restructuring help in the effectiveness of their organization. Briefly describe the organization you are referring to. PRINCIPLES OF ORGANIZATIONAL DESIGN
Division of Labour Departmentalization
Specialization Authority and Responsibility Line and staff authority
Authority and power Contingency Factors Environment and technology
Knowledge technology: task variability & problem analyzability Spans of Control Levels of contro
Centralization and decentralization Contingency Factors
Knowledge technology: task variability & problem analyzability =======================================
EFFECTIVE ORGANIZATIONAL DESIGNS
Use functional structures , when the organization is small, geographically centralized, and provides few goods and services.
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When the organization experiences bottlenecks in decision making and difficulties in coordination, it has outgrown its functional structure.
Use a divisional structure when the organization is relatively large, geographically dispersed, and/or produces wide range of goods/services.
Use lateral relations to offset coordination problems in functional and divisional structures.
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When the organization needs constant coordination of its functional activities, then lateral relations do not provide sufficient integration. Consider the matrix structure.
To adopt the matrix structure effectively, the organization should modify many traditional management practices.
====================================================================================
ORGANIZATION STRUCTURES
Functional Organizations Reduces duplication of activities
Encourages technical expertise
-------------------------------------------------
DIVISIONAL ORGANZATIONS
Improves decision making
Fixes accountability for performance
Increases coordination of functions
---------------------------------------------------------
MATRIX STRUCTURES
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
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LATERIAL RELATIONS
Dotted-line supervision
Liaison roles
Temporary task forces
Permanent teams
Integrating managers
=======================================
Organization Design
Organization design is central to an enterprise’s ability to be market driven, adaptive, innovative, and more – in short, to be able to compete effectively. The design approach is guided by the following core principles: Organization design is more than just structure – it is the integration of structure, processes, people, culture, systems and technology Strategy is the starting point – organization design must be driven by, and supportive of, overall strategy Clarity and accountability underpin sound organization design –when good people know what to do and are held accountable, they achieve results Transitioning to a new organization end-state requires an integrated approach to change management ======================================================= Strategic Organization Design
The Need:
Senior organizational leaders are constantly facing the need to restructure their organizations. Changes in leadership, a shift in strategy, or changing factors within an organization often create the need for reorganizing. Organization design is one of the most potent tools available to senior managers for shaping the direction of their organizations. It can be a key leverage point for directing attention and energy to certain critical activities in an organization.
Organizational leaders, however, often lack the tools necessary to help them in making decisions about how to structure their organizations. Efforts at restructuring are often uneven and unsystematic. Decisions to reorganize are often made with insufficient information and without a clear process to guide the effort. The result is that reorganizations often fail to produce the desired effects, leading instead to further confusion or problems within the organization.
The Process:
Strategic Organization Design is a four-phase participative process intended to provide senior leaders with a systematic, step-by-step method for examining the structure of their organizations. The four-phases are as follows:
p Preliminary Analysis
p Strategic Design
p Operational Design
p Implementation
The preliminary analysis involves the collection of information necessary for making design decisions. Structured interviews are conducted focusing on the strategy of the organization, the key tasks being performed and current strengths and weaknesses of the organization. Operational design involves the structuring of supervisory roles, information flows, and jobs within the context of the strategic design decisions. Implementation involves managing the transition from the current design to a new design.
===========================================
Strategic Organization Design
The key restructuring decisions are made during the strategic design phase. This phase involves six steps:
Step 1. Identify design criteria.
Step 2. Generate grouping alternatives.
Step 3. Evaluate grouping alternatives against the criteria.
Step 4. Generate linking mechanisms.
Step 5. Conduct an impact analysis.
Step 6. Select a new design.
The goal of the strategic design phase is to develop grouping and linking combinations that best support the strategy and basic work of the organization. Before any design decisions are made, the management group identifies design criteria - statements about what the new design will need to be able to do. These statements are reflections of the organization's strategy, its basic tasks, and the current strengths and weaknesses identified during the preliminary analysis.
Next, several different grouping alternatives are developed by the group and assessed against the design criteria. Linking or coordinating mechanisms such as liaison roles, integrator departments, etc. are then generated for each of the possible grouping alternatives. This step depends on the need for information exchange between groups in a particular design. Finally, an impact analysis is conducted to determine the effect that the new design will have on the organization. At this point a final design can be selected using the information and ideas generated during each step. Often the final design is a hybrid of several alternatives considered during the process.
Who Should Be Involved?
This process is highly participative, involving each member of senior leadership staff of an organization, i.e. a Vice President and each of his or her direct reports. The process draws heavily on the knowledge of the organization that each senior staff member has, and its success depends on the sharing of their ideas, concerns, and work-related needs. To complete the process usually requires one to two days time for each member of the senior staff.
The process is not only for those groups who have an immediate need to restructure. Leadership groups who only want to modify their organization slightly, or who simply want to reexamine their current structure may also benefit from using this process. The process can help managers to solidify their strategy and ensure that their structure is consistent with it.
Strategic Organization Design Process Outline
Objective: To provide a systematic participative process to help leaders structure their organizations in a way which helps accomplish the overall business strategy as well as the day-to-day work.
Phase I: Preliminary Analysis Conduct structured interviews to: v Identify strengths and weaknesses of the existing organization v Clarify issues related to business strategy and organizational design
Phase II: Strategic Organization Design
v Design Criteria: Review information from the preliminary analysis and generate criteria for a new design
v Grouping: Generate several design options and evaluate against criteria
- Grouping By Output – Product, Service, or Project
- Grouping By Activity – Function, Work Process, Knowledge or Skill
- Grouping By Customer – Market Segment, Customer Need, Or Geography
v Linking: Identify information flow requirements, select ways to facilitate the flow of information to meet the requirements, and evaluate against the criteria
v Impact Analysis: Analyze each option to determine feasibility given the existing leadership skills, power relationships, and work environment.
Phase III: Operational Design
v Carry out the operational homework necessary to put organization design decisions in place
v Design work charters, reporting relationships, information flows, etc.
Phase IV: Implementation
v Develop a strategy for implementing the new design
v Assess the potential resistance to the new organization
v Determine the best way to manage the transition from the old organization to the new one.
==============================================
1.FUNCTIONAL ORGANIZATION.
This organization is structured by major functions.
-manufacturing function.
-production function.
-marketing function.
-sales management function.
-distribution functions.
-supply chain function.
-finance/accounting function
-legal function
-human resource function
etc 2.PRODUCT ORGANIZATION.
This organization is structured by product groups.
EXAMPLE LEVER BROS UK
-personal care products.
-food products.
-cosmetics
-peters ice cream
etc etc
===============================
Different types of organizational structure and their relevance
TYPES OF ORGANIZATION
HORIZONTAL ORGANIZATION
Horizontal organizations consist of teams which are organized around business processes and which are responsible for the results they generate. By flattening portions of the organization and holding the team members accountable for results, it asserts that decisions will be made more quickly and more consistently with business objectives. This tool seeks to reduce problems with cross-functional coordination by ensuring that the team members have the necessary skills to have end-to-end accountability for the process.
Approach
The following steps are critical to creating a horizontal organization: Organize teams around the most critical business processes. Give team members ownership of the process and assign a clear process leader. Cross-train team members for the range of skills needed for their process. Tie performance measures directly to customer requirements for the process, and reward individuals for individual and team contributions. Create career development paths consistent with developing team consistent with developing team skills. Redefine managers' roles to focus on enabling teams to perform through training, coaching, sharing, information, and setting strategic direction. Benefits
Horizontal organizations are often used to structure processes which requires extensive cross-functional coordination. This tool increases the responsiveness and productivity of an organization. Additionally, horizontal organizations can be used to balance local and global needs within a multinational corporation by creating a network linking the disparate operations.
[these types of organization structure are still very popular with the ''brick and mortar '' type of manufacturing / marketing cos.
these organization are visible and can be seen in types like
-product divisions
-business divisions
-geographical divisions
-functional divisions
etc etc
==========================================###
virtual organization
A virtual organization or company is one whose members are geographically apart, usually working by computer EMAIL and GROUPWARE while appearing to others to be a single, unified organization with a real physical location. But there is more to virtual organizations then simply replacing the location where people work. What makes a virtual organization different? It removes many barriers - especially that of time and location. It emphasizes concentrating on new services and products, especially those with intensive information and knowledge characteristics, rather than concentrating on cost savings made possible by removing the barriers. It goes beyond outsourcing and strategic alliances and is more flexible in: that it has continuously changing partners, the arrangements are loose and goal oriented, emphasizes the use of knowledge to create new products and services, its processes can change quickly by agreement of the partners. What are the steps to a virtual organization? Often the steps here go through: outsourcing mainly to reduce costs where there is some experience in working at a distance, but three is one dominant party and high certainty of what everyone must do. forming strategic alliances to share the work and gain experience in developing and sharing common goals. Here there is no dominant party although the parties are fixed. and then becoming virtual organizations to achieve flexibility. Now the partners themselves can quickly change, with greater emphasis on the use of knowledge to create new and innovative products. Why virtual? What are the reasons for organizations becoming virtual. These include: Globalization, with growing trends to include global customers, Ability to quickly pool expert resources, Creation of communities of excellence, Rapidly changing needs, Increasingly specialized products and services, Increasing required to use specialized knowledge [these types of organization structure are becoming very popular with the ''SERVICE '' type of cos.
these organization are visible and can be seen in types like
-insurance
-financial
-consulting
-professional services
etc etc
=========================================================###
Boundaryless Organization:
What are the boundaries?
Vertical - Boundaries between layers within an organization
Classic Example: Military organization
Problem: Someone in a lower layer has a useful idea; "Chain of command" mentality
Horizontal - Boundaries which exist between organization functional units.
Each unit has a singular function.
Problem: Each unit maximize their own goals but not the overall goal of the organization
External - Barriers between the organization and the outside world(customers, suppliers, other government entities, special interest groups, communities).
Customers are the most capable of identifying major problems in the organization and are interested in solutions. Problem: Lose sight of the customer needs and supplier requirements Geographic - Barriers among organization units located in different countries Problem: Isolation of innovative practices and ideas What is a boundaryless organization?
One that makes all of these barriers much more permeable than they are now; loosen boundaries Let information/ideas/resources/energy flow throughout the organization and into others.
Can an organization be completely boundaryless? No -- there will always have some hierarchy, functional divisions, geographic boundaries, limits between organization BENEFITS
Quick Market Intelligence - direct customer feedback .
SPEEDY New Product Introduction.
RAPID Advanced Manufacturing Techniques.
Quality initiatives . Quality focused CULTURE OPERATION Benefits
Speed Flexibility Integration Innovation [these types of organization structure are with the '' IT COS '' type of SOFTWARE/ SOLUTIONS cos.
these organization are visible and can be seen in types like
-IT
-ITES
-BPO SERVICES
etc etc
===================================================
Matrix structure
Different structures can be combined together. When one has two parallel
organizational structures this is called a matrix structure. The idea is to combine the
advantages of two structures, but this has the obvious disadvantage of being harder to
coordinate and introducing more potential conflict.
In the past most large companies were centralized – that is, involved structures in
which decisions were taken at the centre or upper levels of organization. Just as there
has been a move to flatter organizations, so there has been a move to decentralized
ones.
**MATRIX STRUCTURE
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
Increases power conflicts
Increases confusion & stress for 2-boss employees
Impedes decision making ###############################################################
MECHANISTIC ORGANIZATION
mechanistic organizations are often appropriate in stable environments and for routine tasks and technologies. In some ways similar to bureaucratic structures, mechanistic organizations have clear, well-defined, centralized, vertical hierarchies of command, authority, and control. Efficiency and predictability are emphasized through specialization, standardization, and formalization. This results in rigidly defined jobs, technologies, and processes. The term mechanistic suggests that organizational structures, processes, and roles are like a machine in which each part of the organization does what it is designed to do, but little else.
The term "organic" suggests that, like living things, organizations change their structures, roles, and processes to respond and adapt to their environments. Organic structures are appropriate in unstable, turbulent, unpredictable environments and for non-routine tasks and technologies. For organizations coping with such uncertainty, finding appropriate, effective, and timely responses to environmental challenges is of critical importance. Organic organizations are characterized by:
decentralization flexible, broadly defined jobs interdependence among employees and units multi-directional communication employee initiative relatively few and broadly defined rules, regulations, procedures, and processes employee participation in problem solving and decision making, often interactively and in groups #######################################################################
Discuss the strategies adopted for organizational restructuring in an organisation you are familiar with. Discuss reasons for organizational restructuring?
The organization, I am familiar with is a -a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
---------------------------------------------------------------
The above company ,initially, operated as a market structures company.
As the company added more technical products, it became necessary
to re-organize the company.
-we conducted customer survey.
-we conducted an in-house operation audit.
-we conducted HR audit.
BASED ON THE FINDINGS, WE REVIEWED THE FOLLOWING Basic Characteristics of Organizational Structure
Division of labor: dividing up the many tasks of the organization into specialized jobs
Hierarchy of authority: Who manages whom.
Span of control: Who manages whom.
Line vs staff positions
Decentralization
Hierarchy of Authority
Tall vs flat hierarchies
Autonomy and control
Communication
Size
Span of Control
A wide span of control: a large number of employees reporting, A narrow span of control: a small number employees reporting
The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.
Line vs Staff Positions
Line vs Staff: Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business.
Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service
Decentralization
The extent to which decision making is concentrated in a few people or dispersed through out the organization
Advantage: benefits associated with greater participation and moving the decision closest towards implementation
Disadvantage: Lack of perspective and information, lack of consensus
Integration
Hierarchy of authority
Liaison roles
Teams, committees, task forces
VStandardization & formalization
Mechanistic & Organic Designs
Mechanistic: tallness in hierarchy, specialization, centralization in authority, formalization. Work best under stable conditions
Organic: flatness, generalization, decentralization flexibility Best fit dynamic conditions and complex technology
Effectiveness Criteria
Output approach
Internal process approach
Systems resource approach
Stakeholder approach
Effectiveness & Structure
Size and structure
Complexity
Differentiation
Decentralization
Formalization
Structure and satisfaction
Decentralization
Span of control
Backwards & Forwards
Summing up: we examined the characteristics of organizational structure, differentiation and coordination. Mechanistic and organic designs were discussed and organizational effectiveness.
==============================================================
BASED ON THE TOTAL FINDINGS, WE DECIDED ON A
-PRODUCT GROUP BASED '' MATRIX'' STRUCTURE. THIS STRUCTURE
GAVE THE COMPANY
-better / effective coordination with R&D.
-better / effective cooperation with SALES TEAM.
-BETTER CUSTOMER SERVICE ON TECHNICAL PRODUCTS.
###########################################################
2. Discuss the importance of quality of work life in the present day work – situation. Comment on the quality of working life at your present workplace or a workplace you are familiar with and discuss how it could be improved. Briefly describe the organization you are referring to. QWL services address the key areas of Work-Life Balance, Health Promotion and Wellness, and Staff Appreciation and Recognition. WORK LIFE BALANCE — Manage the competing demands of home and work. FLEXIBLE WORK OPTIONS offer creative solutions to help you balance work and family demands. DAY CHILD CARE is available when public schools close due to inclement weather(pre-enrollment required). WORK AND FAMILY SERVICE provide support for dependent care issues, including school strikes, elder care challenges, and more. EDUCATIONAL WORKSHOPS cover a variety of topics, from finance to family relationships. HEALTH PROMOTIONS AND WELLNESS— Improve your physical and emotional health and wellbeing. EMPLOYEE ASSISTANCE PROGRAM provides free, 24/7 resources for you and your family, including counseling, referrals and information about personal or professional concerns. ANNUAL HEALTH FAIRS held each year in April feature free health screenings and a wealth of information. FLU SHOTS are available to faculty and staff every fall. DISCOUNT FITNESS CLUB PROGRAM offers discounted memberships to local health clubs. WELLNESS WORKSHOPS explore nutrition, lifestyle, exercise and other health-related topics. RECREATING PROGRAM provides group exercise classes, personal training, gym membership and more at attractive rates. WALKING PROGRAM makes walking, jogging or running a part of your routine by tracking your progress and keeping you motivated. WEIGHT REDUCTION PROGRAMS helps members shed excess pounds with on-campus meetings. WEIGHT MAINTENANCE gives you the support you need to avoid gaining weight during the holiday season. SMOKING CESSATION PROGRAM can help you kick the habit. STAFF RECOGNITION/ REWARDS Enjoy recognition and appreciation of your contributions to Penn's mission. LENGTH OF SERVICE REWARDS reward long-standing commitment to Penn. EXCELLENCE AWARDS honor achievements by individuals or teams who go above and beyond the call of duty. FAMILY DAY is an annual celebration of the Penn community, featuring food, fun and football. Quality of Worklife programs are constantly evolving.
=========================
WHAT ARE FLEXIBLE WORK OPTIONS
Flexible work options offer creative approaches for completing work while promoting balance between work and personal commitments. These approaches involve use of non-traditional work hours, locations, and/or job structures, flexible work arrangements, time worked does not equate to achieved outcomes. Outcomes are based on the staff member's achievement of results and use of competencies critical to achieving those results. Except in the case of conversion from full-time to a less-than-full time schedule, such as for a part-time assignment or job share, the total numbers of hours worked and expected productivity remain the same.
Typical flexible work options are:
FLEXTIME :The most requested, easiest to manage and the most affordable FWO, flextime offers flexibility in arrival, departure and/or lunch times, typically with a designated core-time mid-day during which all staff are present.
FLEXPLACE :This arrangement allows for a portion of the job to be performed off-site, on a regular, recurring basis. The majority of work time is spent at the office and the off-site work typically is done at home. It may be the most complicated flexible work option to arrange since it generally requires electronic equipment and technological support.
COMPRESSED WORK SCHEDULE :A traditional 35-40 hour work week is condensed into fewer than five days of work. This option is more easily applied to non-exempt(weekly paid) staff for whom maximum work hours are identified, but it is not ruled out for monthly paid staff who may work more than 40 hours during the work week. The Fair Labor Standards Act requires weekly paid staff to be paid overtime if they work over 40 hours in a work week.
PART-TIME WORK ---is a regular arrangement for between 17.5 and 28 hours a week. This is different from a temporary work assignment where an employee is expected to have a temporary, non-recurring relationship to the workplace and does not receive paid time off.
JOB-SHARING : allows two staff members to share the responsibilities of one full-time position, typically with a prorated salary and paid time off. This is not the same as a part-time job. Each staff member shares a specific proportion of a full-time position. Creative and innovative schedules can be designed to meet the needs of the job sharers and the office. Note: If one position is scheduled for less than 17.5 hours a week, it becomes temporary and cannot retain regular part-time status.
===============================
Creating an Employee Supportive
Workplace . Achieving Work-Life Quality and Balance
Work-Life quality and balance have become the most pressing
issues experienced by workers today. This program is based
upon the premise that we cannot manage time but we can
manage our most important workplace activities, when they are
clearly identitified and prioritized.
Achieving work-life quality and balance requires the
complementary efforts of:
• An Organizational Support System
and implementation of:
• Manager/Supervisor/Employee-Designed Work-Life Process
The Organizational Support System consists of:
. Program support
. Leadership support
. Cultural Transformation
The Manager/Supervisor/Employee Designed Work-Life
Process consists of:
• Personal Work-Life Plan
• Implementation Process
Creating an Employee Supportive Workplace
Achieving Work-Life Quality and Balance
An Organizational Support System
Program Support: This component involves the various unique
programs offered by an organization to their employees. These
programs include, but are not limited to:
1. Family-Friendly Initiatives
2. Child Care
3. Elder Care
4. Adoption
5. Family Leave
6. New Mothers
7. Family Education Expenses
8. Employee Assistance Programs
9. Personal Problems
10. Financial, Mental, Health, and Chemical Dependency
11. Work-friendly Programs
12. Flexibility in Work Hours
13. Telecommuting or working at home
14. Zero Tolerance Harassment(including race, color, sex, etc.)
15. Disability and Religious Accommodation
16. Anti-harassment Training, Prevention, and Procedures
17. Pay Equity Evaluations and Adjustments
18. Employee Satisfaction Survey
19. Disability Strategy
20. Retirement Planning Program
Creating an Employee Supportive Workplace
Achieving Work-Life Quality and Balance
26. On-site summer camp
27. Workshops or seminars for quality, balance, and work-life issues
28. Diversity training
29. Manager/supervisor work-life appraisals
30. Career counseling programs
31. Wellness programs for employees and their families
32. 401(k) or 403(b) individual retirement plan
21. Reduced schedules
22. Family leave for childbirth or adoption
23. Job sharing
24. Leave for school/childcare functions
25. Childcare near or at worksite
=================================================
The organization, I am familiar with is a -a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
---------------------------------------------------------------
THIS ORGANIZATION HAS ADOPTED A FEW
POPULAR ''QWL'' BASED ON THE NEEDS/ AFFORDABILITY.
Program Support: This component involves the various unique
programs offered by an organization to their employees. These
programs include, but are not limited to:
1. Family Leave
2. New Mothers
3. Family Education Expenses
4. Employee Assistance Programs
5. Personal Problems
6. Work-friendly Programs
7. Flexibility in Work Hours
8. Zero Tolerance Harassment(including race, color, sex, etc.)
9. Disability and Religious Accommodation
10. Anti-harassment Training, Prevention, and Procedures
11. Pay Equity Evaluations and Adjustments
12. Employee Satisfaction Survey
13. Workshops or seminars for quality, balance, and work-life issues
14. Diversity training
15. Career counseling programs
22. Family leave for childbirth ETC
########################################
3. Explain how organizational analysis helps in the development of an organization. Illustrate an intervention which is used for the development of the organization which you are familiar with. Briefly describe the organization you are referring to. ORG.ANALYSIS IS THE SECOND STAGE, WHERE WE ANALYSE THE INFORMATION IN A SCIENTIFIC MANNNER AND DEVELOP
A STRATEGY / ACTION PLAN.
Culture and Climate Analysis Employee Opinion Analysis Market Research Analysis
Competitive Analysis COMPANY SWOT Analysis Environmental Scan ANALYSIS / Development Skill and Competency Assessment Customer Input or Feedback ANALYSIS
Group and Individual Assessments, and 360 Evaluations FROM THESE WE DEVELOP
Development of Master Strategies Development of Goals Development of Objectives Development of Tactics Structural Redesign Change Planning, Implementation Design, and SUPPORT SYSTEMS.
============================================
The organization, I am familiar with is a -a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer service
*distribution
*warehousing/ transportation
*TQM
=========================
THE ORGANIZATIONAL ANALYSIS INCLUDE:
1.ENVIRONMENTAL ANALYSIS
Environmental analysis is defined as the process by which strategists monitor the economic, governmental, legal, market, competitive, supplier, technological, geographic, and social cultural settings to determine opportunities and threats to their firms / company / organization. Environment diagnosis principally consists of managerial decisions made by strategist for analyzing the significance of the data like Strengths, weakness, opportunities and threats of the organization to has to design their own strategy for formulation, implementation and controlling the internal environmental factors. Environmental analysis helps to strategic executive and manager to diagnosis of strategic competitive force and components of strategic management. However, internal environment of the organization is a quite essential and important from the point of view of the environment analysis. It is the cornerstone of the new and exiting business opportunity analysis too. For instance, the individual life success depends on his innate capabilities like psychological factors, traits and skills. These are to the cope with the environment then will be got success otherwise failure. The survival is the basic elements and success of the business organization, it has depend on its own strengths in terms of resources like money, men, machinery, materials, market and methods as its command. Organization success depends on effective utilization of physical resource, financial resources and human resource skills. These are adaptability to the business environment. Every business organization principally consists of internal environment factors and set of external environmental factors. In this chapter, we shall discuss only the internal environment of the organization/company. Internal environment factors are generally considered as controllable factors of the organization. Internal environment factors are important to business like personal(human) resource department. marketing department, production department, physical facilities, accounting and finance departments and swot analysis. Therefore, the organization controls over these factors, these factors are modified or alter by the organization that suit for the business environment. INTERNAL ANALYSIS OF THE ORGANISATION / COMPANY Formulation of an effective and efficient strategy has based on a clear definition of organization mission, an accurate assessment of the external environment and through internal analysis of the organization. Organization requires success it needs at least three ingredients. They are as listed: Strategy must be consistent with conditions in the competitive environment Strategy must place realistic requirements on the organization / companys internal resources and capabilities. Strategy must be carefully formulated, implemented, controllable and executed. Internal analysis of the organization is to difficult and challenging one to strategist.
An internal analysis has leads to design a realistic organization profile. It frequently involves tradeoff, value system judgments, educated and skilled guess as well as objective and standardized analysis. A systematic internal analysis leads to main objective of the organization profile. It is essential to develop strategy and design a realistic mission for achievement of the strategy. Internal analysis of the organization must identify the strategically strengths, opportunities, weakness and threats that are based on organization strategy. Organizational analysis identifies suitable strategy that based on the SWOT analysis. Internal analysis can be achieved by first identifying key internal factors like value system, mission objectives, management structure and nature, integrated power relationship, human resource, company/organization image and brand equity, physical assets, R&D, technological capabilities, marketing resource and financial resource factors and secondly by evaluating these factors. THE VALUE OF SYSTEMATIC INTERNAL ASSESSMENT The value system of internal assessment is essential from the point of view of strategy formulation by the experienced strategist of the organization / company. The value system applies to either large or small business concern. It is critical in developing a successful business strategy. Regardless of the favorable opportunities in the environment, a strategy must be considered the essential internal strengths, weaknesses, opportunities and threats of the organization if such opportunities are to be maximized for accomplishment of goals. The value systematic internal analysis is particularly essential in small business organizations. Small business organizations are faced lot of problems like limited resource and markets. These organizations are flexible and capable to capture selected markets and effectively channel their limited resource and maximize these limited market opportunities. Internal analysis is the basis objectives of the organization. Steps/Process in the Development of a Organizational / Company Profile Company / organization profile focus on determination of strengths and weakness of the strategic environment of the business. Identifying and evaluating strategic internal factors are based to accomplish to organization future strategy. The major steps are important to development of an organization / company profile. They are listed below: Stage one -- Identification of Strategic Factors Stage two --Using Value Chain Analysis Stage three -- Evaluations of strategic internal factors IDENTIFICAION OF STRATEGIC FACTORS An important identification of strategic factors approach as listed below: 1. Functional approach 2. The value chain approach FUNTIONAL APPROACH Functional approach refers to Organizations basic capabilities; characteristics, swot analysis and limitation are the key strategic factors. Functional approach key strategic factors are as follows: Marketing Finance and accounting Production /operation/ technical Human resource development Organization of general management Marketing Marketing deals with the following issues: Organizations products / service; product life cycle and marketing strategy. Concentration of sales in few products or little customer segmentation. Ability to gathered information about the market. To know the market share or sub market share. Product/service mix and expansion potential: to know the life cycle of key products; to know the profit or loss of the product/service. To clearly know the channel of distribution; number, coverage, and control. To maintain effective sales organization: to find out knowledge about the customer needs. To improve product/service quality with image and reputation of brand name. Efficient and effective utilization of available resource for effective sales promotion and advertising. To aware of the pricing strategy and pricing flexibility. To effective monitoring and feedback of the marketing functions and expansion of product Effective implementation of after sales service and follow up. To keep standards, goodwill and brand loyalty. Finance and Accounting Finance and accounting functions refers to: Ability to raises short term and long-term capital: either debt or equity. To maintain good corporate level resource. To know the cost of capital relative to industry and competitors Tax consideration To build up effective relationship with owners, investors, financial institution and stock holders. To know the leverage position: capacity to utilization financial strategies, like lease or sale and lease back. To aware of the cost of entry and barriers of the entry. To know the price earning ration Present working capital position of the organization. Effective cost control and ability to minimize cost of expenditure for production of goods and service. Financial size of the organization. Efficient and effective accounting system for cost, budget, and profit planning of the organization. Production/Operation/Technical Production or operation or technical refers to: To know the present raw material cost and availability Inventory control system of the organization. Location facilities; layout and utilization facilities. Technical efficiency and effective utilization of technical resource in the organization. Effective use and implementation of subcontracting. Degree of vertical integration in terms of value added and profit margin of the product. To know the efficient and cost benefit of production techniques. Effective utilization and implementation of operation control procedure: design, scheduling, purchasing, quality control and efficiency. To know the costs and technological competencies relative to industry and competitors. Research development, innovative, advance ethnological development. Patents, trademarks and similar legal protection for their organization products/service. Human Resource Development Human resource development refers to the following: Effective management of the human resource in the organization. Improvement of employee skill and morale. Labor relations costs compared to industry and competition from present industry scenario. Efficient and effective formulation and implementation and controlling of the policies. Effective utilization of incentive to motivate employees performance. To know the ability to level peaks and valleys of employment. To regulate employee turnover and absenteeism. Specialized skills and experience. Organization of general management Organization of general management refers to the following: To know the organization structure. Organization image and prestige to public world. Organization record for achieving goals and objectives. Effective utilization of resource and overall organization control system. To effective monitoring organization cultural climate. Effective utilization of systematic procedure and tools and techniques in decision-making. To know the top management skills, capabilities and interest. Effective implementation strategic planning system. To keep and maintain intra organization synergy(multibusiness) Some of which would be the focus of internal analysis in most business organization. Organization is not likely to consider all of the factors are potential strengths or weakness. Strategist has develop or review the factors which are important for successful of the organization. For the Analysis of the organization, firstly, a strategist has to analyze the past trends like sales, costs and profitability. These trends are the major importance in identification of the internal factors of the organization. Further this identification should be based on a clear picture of the nature of the organizations sales trends. An anatomy of past trends has broken down by product lines channels of distribution of goods and service into different segmentation of key customers, geographical region and sales approach should be developed in detail. A similar anatomy of past trends should focus on costs and profitability. Strategist has to conduct detailed investigation of the organizations performance history that helps isolate internal factors influencing to sales, costs and profitability or their interrelationships. The above factors are important in future strategy decisions. Identification of strategic factors also requires an external focus of the organization. Strategist isolates key internal factors through analysis of past and present performance like industry conditions / trends and comparisons with competitors. In addition, strategic internal factors are often selected for in depth evaluation because organizations are contemplating expansion of products or markets, diversification. Strategist carefully scrutinizes the industry under consideration of current competitors. This is a key means of identifying strategic factors, if an organization is evaluating its capabilities more into unfamiliar markets. ===================================
INTERNAL ORGANIZATIONAL ANALYSIS
-plan to change operational methods [ change in skills/ knowledge]
-plan to change technology [ change in knowledge/skills]
-organization restructuring [ change in job functions]
-changes in corporate strategy [ change in knowledge /skills]
-changes in the role of jobs. [ change in knowledge / skills]
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Levels of Analysis
1. Organizational Analysis
-Identification of short- and long-term goals
-Identification of human resource needs
-Evaluation of methods of meeting HR needs(e.g.,
selection, training)
-Assessment of resource availability
-Evaluation of support for transfer of training
2. Task(Job) Analysis
-Identification of: tasks
-standards
-optimal procedures
3. Person Analysis
-Evaluation of individual against standards
-Identification of deficiencies
-Identification of causes(e.g., motivation vs. ability)
4. Demographic Analysis
-Assess the specific training needs of various
demographic groups(e.g., the disabled, ]
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