Internal Scanning: Organizational Analysis

 Internal Scanning: Organizational Analysis

  1. A resource-Based Approach to Organizational Analysis
  2. Core and Distinctive Competencies

A core competency can be defined as a collection of competencies that cross division boundaries and that a company can do extremely well. A distinctive competency on the other hand is when the competencies are superior to those of a competitor.

In evaluation of a firm’s competencies, VRIO framework has a series of four questions to help;

  1. Value
  2. Rareness
  • Imitability
  1. Organization
  2. Using Resources to Gain Competitive Advantage
  3. Determining the Sustainability of an Advantage

There are two characteristics that determine the sustainability of a firm’s distinctive competencies namely durability and imitability. Durability is the rate under which a firm’s resources, capabilities become outdated.   Imitability is the rate at which a firm’s resources and capabilities can be copied by others. A core competency can be easily copied till it becomes transparent, transferable and replicable.

  1. Business Models

It is composed of five elements including

  • Who it serves
  • What it provides
  • How it makes money
  • How it differentiates and sustains competitive advantage
  • How it provides its product or services
  • Value-Chain Analysis

A value chain is a connected set of value-creating activities that start with vital raw materials from suppliers, then moves on to activities involving producing and marketing the product and finally getting the final good to the consumers through distributors.

A company’s center of gravity is the part of chain that is most important to the company and the point that its best expertise and capabilities lie, which is in its core competencies.

  1. Scanning Functional Resources and Capabilities
  2. Basic Organizational structures

There are three basic organizational structures; simple structure for a small firm, functional structure for a medium firm and divisional structure for a large corporation.

  1. Corporate Culture: The Company Way

Corporate culture is a collection of beliefs, expectations and values that are learned and shared members of a corporation and are passed from one generation of employees to another. It has two distinct attributes; intensity and integration.   Corporate intensity is the degree to which the members agree on the culture while integration is the extent through different department in the company share the same culture.

  1. Strategic Marketing Issues

The marketing manager needs to be conversant with the marketing position and segmentation and marketing mix.

  1. Strategic Financial Issues

A financial manager should have the best source for funds, use of funds and control of the same.

  1. Strategic Research and Development issues

A company should have enough resources for the effective operations of the R&D department. A company’s R&D intensity is the gaining of a global market share in the global competition.

  1. Strategic Operations issues

Under the operation issues, it is up to the manager to come up with a system that produces the required number of products or services, with a particular quality, given cost and within a given timeline. Manufacturing can be either continuous or intermittent. Continuous systems are those laid out line on which products can be continuously assembled and processed. On the other hand, intermittent systems are items that are processed in succession.

  1. Strategic Human Resource Issues

The manager has to match the jobs with the best candidate for the job.

  1. Strategic Information System/Technology Issue

Flow of information should improve the productivity in the communication department.

Continuous and intermittent manufacturing system and examples

Reference

Wheelen Thomas and Hunger David ‘Strategic Management and Business Policy: Toward Global Sustainability’ 13th Ed. Pearson Publisher

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