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Organisational Appraisal

INTRODUCTION

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

 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Outdated or expensive tech.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. 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.

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