Organizational Appraisal

UNIT 4

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CASE STUDY ??
SWOT analysis

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Organizational capability rests on
an organization's capacity and
ability to use its competencies to
excel in a particular field, thereby
giving it strategic advantage.

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 DEVELOPMENT
OF
STRATEGIC ADVANTAGE

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ORGANISATIONAL RESOURCES
Resources based view of internal
environment or resource base theory
(Barey-1991)
Resources: Tangible and Intangible
All assets,capabilities,organizational
processes,information,knowledge etc.

Costly to Non
Valuable Rare
Imitate Substitutable

Physical resources:Technology,plant and

equipmet,geographic location, access to raw Strategic Advantage
materials etc.
Human
resources:Training,experience,judgement,intellige
nce,relationship etc.
Organizational resources: Formal system and
structure, informal relationship among groups etc.

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ORGANISATIONAL BEHAVIOUR
Organizational behavior is the manifestation of the It leads to the development of a special
various forces and influences operating in the internal identity and character of an organization.
environment of an organization that create the ability
for, or place constraints on, the usage of resources.

Forces and influences that affect organizational

behavior are: the quality of leadership, management
philosophy, shared values and culture, quality of work
environment and organizational climate,
organizational politics, use of power etc.

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ORGANISATIONAL RESOURCES + ORGANISATIONAL BEHAVIOUR

STRENGTH & WEAKNESSES

Strength is an inherent capability which an organisation SYNERGISTIC EFFECT
can use to gain strategic advantage It is an idea that the whole is greater
Weakness is an inherent limitations or constraints which or lesser than the sum of its parts.
creates a strategic disadvantage for a organisation. 2+2=5 or
2+2=3 (Dysergy)

Proctor & Gamble Company acquired Gillette (2005)

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https://www.investopedia.com/terms/s/synergy.asp

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SYNERGYSTIC EFFECT

Over a period of time

COMPETENCIES (योग्यता)
Are special qualities possessed by an
organization that make them withstand the
pressure of competition in the marketplace. Degree of uniqueness

Core Competencies
(Unique resources, Core capabilities, Distinctive Competence (exclusive)
Invisible aseets,Embeded knowledge)
• Two wheeler-more fuel efficient
C.K.Prahlad & Gary Hamel • Niche creation
Core competence-the collective learning
Canon:Optics,imaging,microprocessor controls
Sony:Miniaturisation
Philips: Optical media
3M’s:Stick tape
Honda:Engine,power trains
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 Analogy of a tree by Prahlad & Hamel

Tree: Diversified corporation

Trunk & Limbs: Core products
Smaller branches: Business units
Leaves,flowers,fruit:End products
Root: Core competence

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COMPETENCIES
Outcome of organization's knowledge base
ORGANISATIONAL CAPABILITY (क्षमता) Organisational capability is measured
It is the inherent capacity or potential of an and compared through the process of
organisation to use the strength and overcomes its organizational appraisal.
weaknesses in order to exploit the opportunities and
face the threats in its external environment.

Strategic factors,
Strategic advantage factors,
Corporate competence factors
STRATEGIC ADVANTAGE

COMPETITIVE ADVANTAGE

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 FUNCTIONAL AREAS OF AN ORGANISATION
1. Finance
2. Marketing
3. Operations
4. Personal
5. Information
6. General Management

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Financial Capability

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Financial Capability

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Marketing Capability

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Operations Capability

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Personnel Capability

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Information Management Capability

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General Management Capability

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 CONSIDERATIONS IN ORGANISATIONAL ANALYSIS/APPRAISAL

The purpose of organizational appraisal is to determine the

organizational capability in terms of strengths and weaknesses that lie
in the functional areas.

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 INTERNAL ANALYSIS

1. VRIO FRAMEWORK

A. VALUABLE
B. RARE
C. INIMITABLE
D. ORGANISED FOR USE

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2.VALUE CHAIN
Porter (1985):Value Chain Framework
A value chain is a set of inter linked value creating activities performed by an organization.

Value Chain of Upstream Supplier

Value Chain of Downstream Supplier

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 VALUE CHAIN OF A MANUFACTURING FIRM

PRIMARY ACTIVITIES SECONDARY ACTIVITIES

Related to the flow of products to the customers. To sustain the primary activities.

FIVE sub activities FOUR sub activities

1. Inbound logistics 1. Firm infrastructure
2. Operations 2. Human resource management
3. Outbound logistics 3. Technology development
4. Marketing & sales 4. Procurement
5. Service

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3.QUANTITATIVE ANALYSIS
i. Financial Analysis
ii. Non –Financial Analysis
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4.QUALITATIVE ANALYSIS
5.COMPARATIVE ANANLYSIS
i. Historical Analysis
ii. Industry Norms
iii. Benchmarking
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6.COMPREHENSIVE ANALYSIS
a) KEY FACTOR RATING
 Financial capability factors
 Marketing capability factors
 Operations capability factors
 Personnel capability factors
 Information management capability factors
 General management capabilities factors
b) BUSINESS INTELLIGENCE (BI) SYSTEM
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c) BALANCED SCORECARD
Robert S Kalpan & David P. Nortan
FOUR Key Performance Measures
1. Customer Perspective: “How do customers see
you?”
2. Internal Business Perspective: “ What must we
excel at?”
3. Innovation & Learning Perspective: “Can we
continue to improve and create value?”
4. Financial Perspective: “How do we look at
shareholders?”
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STRUCTURING ORGANISATIONAL APPRAISAL

Glueck: Strategic Advantage Profile (SAP)

Organizational Capability Profile (OCP) Rating on six functional areas

(Strategic Advantage Profile is made on the basis of

the detailed information presented in the OCP)

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