Understanding the Organisation

1. Understanding the Organisation

2. Learning Outcomes • Prepare a brief outline PESTLE analysis for the organisation and recognise issues of specific relevance for own area of responsibility • Undertake a SWOT analysis of the organisation and own area of responsibility • Use completed SWOT and PESTLE analyses to derive a profile of the organisation in relation to identified market and customer needs • Identify research references from reading and sector information

3. Understanding the Organisation • An ORGANISATION is a body that is set up to meet needs. • BUSINESS ORGANISATIONS satisfy needs by providing people with goods and services

4. Business Organisations • Try to achieve objectives • Use resources • Need to be directed • Have to be accountable • Have to meet legal requirements • Have a formal structure

5. Understanding Organisations Common factors • People • Objectives • Structure, and • Management Resources • Non-human – physical assets, materials, facilities • Human – members’ abilities and influence, and their management

6. Formal and Informal Organisation

7. Comparing formal & informal organisations Source: Adapted from J. L. Gray and F. A. Starke, Organizational Behavior: Concepts and Applications, Fourth edition, Merrill Publishing Company, an imprint of Macmillan Publishing Company (1988), p.432. Reproduced with permission from Pearson Education Inc., Upper Saddle River, NJ.

8. Comparingformal& informal organisations Source: Adapted from J. L. Gray and F. A. Starke, Organizational Behavior: Concepts and Applications, Fourth edition, Merrill Publishing Company, an imprint of Macmillan Publishing Company (1988), p.432. Reproduced with permission from Pearson Education Inc., Upper Saddle River, NJ.

9. Comparing formal & informal organisations Source: Adapted from J. L. Gray and F. A. Starke, Organizational Behavior: Concepts and Applications, Fourth edition, Merrill Publishing Company, an imprint of Macmillan Publishing Company (1988), p.432. Reproduced with permission from Pearson Education Inc., Upper Saddle River, NJ.

10. What is Strategy? • The pattern of decisions and actions taken by the business to achieve its goals • Businesses have a variety of goals • Major goal is to improve performance so that profits increase

11. STRATEGY Future Intent Sources of Advantage + The two elements of strategy - the essence that binds and drives the company

12. Vocabulary of Strategy Vision Ideal Mission Over riding premise in line with stakeholders Goal General statement of aim or purpose Objectives Quantification/more precise statement of the goal Strategies Broad categories of actions to achieve goal Actions Individual steps to implement strategies Control Monitoring of action Rewards Rewards - payoffs

13. A summary Model of the Elements of Strategic Management Culture Environment Resources Strategic Analysis Planning Resources Identify options Strategic Implementation Strategic Choice Evaluating options Selecting strategy Managing change Organisation structure

14. Framework for Developing Improved Performance • Where do we want to be? • Mission, goals & objectives • Business & its boundaries • Competitive advantage • Stakeholder expectations • Shared values • Clearly stated functional goals & objectives • Where are we now? • Review • Drivers for change(SWOT) • Functional reviews • Market requirements • How do we fill the Gap? • Strategic planning • Competitive strategy • Critical success factors • Core processes • Key competencies • How do we measure progress? • Measurement & control • MIS • Benchmarks & KPI’s • Team review & individual appraisal • What needs to be done? • Tactical planning & implementation • Critical process improvement • Setting of team & individual goals

15. Managing Strategically Externaldrivers Develop strategy Analyse & Develop Market focus Analyse Culture & leadership Analyse critical business processes Identify & implement Best practices Improved business performance

16. External Drivers for Change Materials Shareholders Macro-economics Suppliers Environment Purchasers Others? Existing customers Legislation New customers Products/ processes Existing competitors New competitors

17. PESTLE – KNOWING WHAT IS OUT THERE

18. SWOT Analysis • Firm • Distinctive competences • financial • managerial • functional • organisational • Reputation • History Strengths Weaknesses Strategy • Industry • Size • Attractiveness • Competition • strategy • capabilities • intent • Segmentation Fit Opportunities Threats Macro-environment PESTLE

19. Porter’s 5 Forces - Structural Analysis ofIndustries Supplier Power Degree of Rivalry Threat of Entry Threat of Substitutes Intensity of competition Buyer Power Bargaining leverage Price sensitivity

20. Organisations of the future Organisations are living organisms that are constantly evolving. Ulrich suggests that with the changing and dynamic contextual factors - … the essence of organisations has shifted and will continue to shift from focusing on structure to capability.

21. Rise of organisational democracy There is a demand for alternative organisational practices and a far reaching transformation has already begun based on the idea that management as a system fails to open the heart or free the spirit The age of management is coming to an end and the real push for the future is for more authentic human relationships and the humanisation of organisations as crucibles for personal growth and development Cloke & Goldsmith

22. Summary • Understanding the organisation • Strategic management • SWOT analysis • TEMPLES • Porter’s 5 Forces • Organisations of the future