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INTRODUCTIONAppraisel of internal envt. Enables a firm to decide about what it can do. The resources,behaviour,strength and weaknesses, synergy and competencies constitute the internal envt. All these together determine the organisational capability that lead to strategic advantage
Organisational capability could be understand in terms of strengths and weaknesses existing in different functional area of an organisation
The internal envt. Of a business consist of various factor existing within an organisation which results into building its strengths and weaknesses It includes:Employees & their skills base Level of tech. available Availability of various resurces like finance,infrastructure etc. processes
Organisational design & structure Organisational work culture-procedurepolices
Strengths & weaknesses meaning
internal envt. :Strengths & weaknesses External environment :- opportunities & threats
Strengths:A strengths of a business is its capacity or ability to perform or to posses any resource relevant for the success or otherwise of a firm, which may not be possessed by a rival player in the industry. For e.g. Skilled manpower Level of tech.
Economy of scale or availability of cheap finance Intense distribution channels Raw material /component at least cost Efficient suppliers etc.
The strengths possesed by a firm either in the short run or in the long run business can take a risk based on one of its strengths this strength , if realised can help strategic planning of a firm
Weaknesses:A wekness of a business is its shortcoming something which a rival firm may have.this weakness determine the level of strategic advantage gained by competitive firm over a business. A weakness could be poor availability or poor retension of skilled manpower or unability to do something or to possess
Examples are as:High cost of capital Outdated or expensive tech. High cost of production Unreliable supplier Shallow distribution channel Poor state of logistics & physical distribution
Method & tech. used for org. appraisalThere are 3 kind of tech. & method used that are 1.Internal analysis 2.Comparitive analysis 3.Comprehensive analysis
Internal analysis:Value chain analysis Quantitative analysis Internal analysis:-it is the analysis of the internal envt. Of the organisations strength & weaknesses etc. this analysis can be done by various metod
Value chain analysis:
Value chain is the sequence of activities starting from production to mktg. the value chain analysis focuses on a set of these inter related activities undertaken in an organisation. The imp. Of this technique is that the total tasks of an organisation are seggregated into different parts and then evaluated.
It is an operational technique which makes use of a physical unit in quantitative terms for the purpose of performance assessment .it is one of the popular used method
Quantitative techniquesFinancial parameters 1.Ratio analysis 2.Economics value added (EVA) 3.Activity based costing (ABC)
Physical parameter 1.Computation of absenteeism 2.Market ranking 3.Rate of advt. recall 4.Total cycle time of production
Qualitative analysis:The qualitative analysis is another technique. Operational control which is done for those aspects which are not possible to be measured numerically. There are many methods used under qualitative analysis:1.Intution 3.informed opinion 2.Judgement 4.surveys 5.Experimentation etc.
b.Comparative analysis:The technique mentioned aims at comparing the performance of an oragnisation with its past performance.this comparison helps in the operational control.there exists three techniques:-
1.Historical analysis:The technique of historical analysis is a very easy to implement and a very frequently used technique. This aims at comparing the present performance of an organisation with the record of performance over the past years. This comparison uses past data i.e. historical data for analysis of comparison.
This method of comparison uses the standards of leading firms in the same industry to be used for comparison with the performance achieved by an organisation.
Present performance Of an organisation.
vs industry norms/avg.Of performance
Bench marking is a comparitive technique, where the performance of an organisation is measured against the best practices in area.
Performance of An organisation
the best practices in the industry
c)Comprehensive analysis:As the name suggested . It is a technique which encompasses total activities of an organisation for the purpose of analysis This is of two types 1.Balanced score card 2.Key factor rating
Balanced score card:
This method is based on the identification of 4 key performance measures of customer perspective ,internal business perspective,innovation & learning perspective & financial perspective. The performance of an organisation is measured taking into account various parameters.
Key factor rating:
It is a very comprehensive metod taking a holistic view of the organisational performance. It takes in to account key factors in several areas & then evaluates performance.