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Organization appraisal (Internal Environmental Analysis) Internal environment provides an organization with the capability to capitalize on the opportunities.

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Presentation on theme: "Organization appraisal (Internal Environmental Analysis) Internal environment provides an organization with the capability to capitalize on the opportunities."— Presentation transcript:

1 Organization appraisal (Internal Environmental Analysis) Internal environment provides an organization with the capability to capitalize on the opportunities or protect itself from the threats that are present in the external environment. “Internal Environment analysis provide the information about the strengths and weaknesses of the organization”

2 Strategic Advantage Organizational CapabilityCompetencies Synergistic Effect Strengths Weaknesses Organizational Resources Organizational Behavior

3 Organizational Resources Tangible(physical) resources Technology, plant and equipment, raw material, financial resources, infrastructure, etc Intangible(Human)resources Knowledge, skill, innovative capacity, experience, training of Human resource

4  Organizational behavior create ability for, or place constraint in the usage of resources  It includes quality of leadership, management philosophy, shared values and culture, quality of work environment and organizational climate, organizational politics and policies, use of power, relationship and group norms etc. “Organizational resources and organizational behavior collectively produce strengths and weakness”

5  Organizational resources and behavior combine in complex fashion to create strengths and weaknesses within internal environment of an organization  Strength It is an inherent capability which an organization can use to gain strategic advantage.  Weakness It is an inherent limitation or constraint which creates a strategic disadvantage for an organization

6 Synergistic Effects Strengths and weaknesses combine in a variety of ways and produce synergic effects. For instance two strong point in a particular functional area add up to something more than double the strength. Two weaknesses acting in tandem result in more than double the damage. Example In marketing, the synergic effect occur when the product, pricing, distribution, and promotion resulting high level of marketing synergy.

7 Competencies On the basis of its resources and behavior, an organization develops certain strengths and weakness which when combined lead to synergistic effects. Such effects manifest themselves in terms of organizational competencies. Competencies. Are special qualities possessed by an organization that make them withstand pressure of competition in the marketplace Many organization achieve strategic success by building distinctive competencies around CSFs(critical success Factor) Example Superior product quality in a particular attribute, say, a two wheeler. Which is more fuel efficient than its competitor products Creation of a market niche by supplying highly specialized products to a particular market segment.

8 Organizational capability It is the inherent capacity or potential of an organization to use its strengths and overcome weaknesses in order to exploit opportunities and face threats in its external environment. Types of capabilities 1. Financial capability 2. Marketing Capability 3. Operations Capability 4. Personnel Capability 5. General Management Capability

9 Consideration in Organizational Appraisal 1. Factors affecting Organizational Appraisal 2. Approaches to Organizational Appraisal Factors affecting Organizational Appraisal Approaches to Organizational Appraisal


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