Appraisel 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 Internal envt.
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-procedure- polices Strengths & weaknesses meaning
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Outdated or expensive tech.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. appraisal
There 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. Quantitative analysis:-
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 techniques
Financial parameters Physical parameter
1.Ratio analysis 1.Computation of 2.Economics value added absenteeism (EVA) 2.Market ranking 3.Activity based costing 3.Rate of advt. recall (ABC) 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. 2.Industry norms:-
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 vs industry norms/avg.
Of an organisation. Of performance 3.Bench marking:-
Bench marking is a comparitive technique,
where the performance of an organisation is measured against the best practices in area.
Performance of vs the best practices in
An organisation 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.