INTERNAL ASSESSMENT Session 4 Professor Hilda L. Teodoro Ateneo Graduate School of Business
A comprehensive and thoughtful examination of the current state of an organization which defines its capacity for succeeding in its environment.
Identification of the organization’s strengths and weaknesses
Guide Questions: 1. How clearly are the organization’s values and norms enunciated and practiced in the entire organization? 2. What stories, rituals, symbols, heroes illuminate the culture of the organization? 3. Does the current culture support the organization’s strategy? Culture Checklist
Is the organization’s set of vision/mission and strategy clear to all the employees in the organization?
Are these appropriate given current situation?
Are company objectives and goals measurable and well communicated?
Are the physical structures and facilities appropriate for the effective functioning of the organization?
Is the organization’s structure appropriate?
Is employee morale high?
Are employee turnover and absenteeism low?
Leadership Styles Competence
1. How would you describe the leadership style in the organization?
2. How effective is this in steering the organization towards its goals?
3. What can you say about the level of competence of the leaders ( i.e. top, middle and first line ) in managing the organization?
Do managers at all hierarchical levels plan effectively?
Do managers delegate authority well?
Market segments Positioning Market share growth Guide Questions: 1. Are marketing planning and budgeting effective? 2. Do the firm’s marketing managers have adequate experience and training 3. Does the firm conduct market research? 4. Are product quality and customer service good? 5. Are the firm's products/services priced appropriately? 6. Does the firm have an effective promotion, advertising, and publicity strategy? Marketing Checklist Distribution channels Sales organizations Market research Customer service Product pricing Market budgets
Financial strength Short-term funding Long-term capital Guide Questions: 1. Where is the firm strong and weak as indicated by financial ratio analysis? 2. Are capital budgeting procedures effective? 3. Does the firm have good relations with its investors and stockholders? 4. Are the firm’s financial managers experienced and well trained? Financial Checklist Working capital Capital budgeting Dividends Investor relations Training
Financial Ratios Sales Net income Return on equity Firm’s ability to maintain economic position Growth ratios Gross profit margin Operating profit margin Net profit margin Return on total assets (ROA) Return on stockholders’ equity (ROE) Earnings per share Effectiveness shown by returns on sales and investment Profitability ratios Accounts receivable turnover Inventory-turnover Total assets turnover Effective use of firm’s resources Activity ratios Debt-to-total-assets Long-term debt-to-equity Extent of debt financing Leverage ratios Current ratio Quick ratio (or acid-test) Firm’s ability to meet its short-term obligations Liquidity ratios
Suppliers Facilities and equipment Inventory control Guide Questions: 1. Are suppliers of raw materials, parts, and subassemblies reliable and reasonable? 2. Are facilities, equipment, machinery, and offices in good condition? 3. Are inventory-control policies and procedures effective? 4. Are quality-control policies and procedures effective? 5. Are facilities, resources, and markets strategically located? 6. Does the firm have technological competencies? Production Checklist Quality control Location Technological competencies
Development of new products before competition Improving product quality Improving manufacturing processes to reduce costs Guide Questions: 1. Does the firm have R&D facilities? Are they adequate? 2. If outside R&D firms are used, are they cost effective? 3. Are the organization’s R&D personnel well qualified? 4. Are R&D resources allocated effectively? 5. Is communication between R&D and other organizational units effective? 6. Are present products technologically competitive? R & D Checklist
Computer utilization MIS organization and controls Guide Questions: 1. Do all managers in the firm use the information system to make decisions? 2. Is there a chief information officer or director of information systems position in the firm? 3. Are data in the information system updated regularly? 4. Do managers from all functional areas of the firm contribute input to the information system? 5. Is the information system user-friendly and updated? 6. Are computer training workshops provided for users? MIS Checklist Data sufficiency Training
IFE Assign to each factor a weight List key internal factors Assign a 1-4 rating Multiply each factor by its rating Sum the weighted scores KEY INTERNAL FACTORS FUNCTION WT RAT-ING WTD SCORE STRENGTHS 1. Strong ethical culture Culture .05 4 .20 2. Good corporate image Mgmt .10 3 .30 3. Only coxib with migraine indication Marketing .15 4 .60 4. Most cost effective among all coxibs Marketing .05 3 .15 5. Highly motivated sales force Marketing .15 4 .60 6. Strong R&D background R&D .05 4 .20 WEAKNESSES 0 0 1. Lack of promotional resources. Marketing .10 1 .10 2. Weak presence with General Practitioners Marketing .15 2 .30 3. Slow growth rate in sales, EBIT and ROE Finance .05 2 .10 4. Operational efficiency issue Operations .15 2 .30 TOTAL 1 2.85