Thairobbin 8 organization assessment


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Thairobbin 8 organization assessment

  1. 1. DONG HOI URBAN DEVELOPMENT PROJECT COOPERATION SWITZERLAND-VIETNAMDỰ ÁN PHÁT TRIỂN ĐÔ THỊ ĐỒNG HỚI HỢP TÁC VIỆT NAM-THỤY SỸDUDP LEARNING CENTRE8. Organisational AssessmentDecember 2004Course adapted from Henley Management College’s material, “Strategic Management” by John Tompsonand “The Search of Excellence” by Thomas J. Peters and Robert H. Watermann
  2. 2. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 1ORGANISATIONAL ASSESSMENTEvery organisation must adapt to an ever-changing environment.Before going through complex changes process, it is crucial to knowwhere the organisation stands, and what are its Strengths,Weaknesses, Opportunities and Threats.In this course, youll learn how to assess strategically the positionand direction of your own organisation and how to summarize theminto a SWOT matrix. This course is mostly destined to public oradministrative organisations.1. Why an Organisational Assessment?An organisation is constantly under pressure to adjust itsstructure, strategy, etc., to respond to external influences.Changes can be responsive and adaptative to influences orthe organisation can adjust itself to anticipate expectedchanges.Before going through a transformation process that will orientthe organisation to a different direction, the actual location anddirection must be known.An organisational assessment can make use of different anduseful frameworks that help “locate” the organisation withinexternal and internal contexts.An assessment intends to answer to the following questions:
  3. 3. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 2• How are we doing?”• “Where are we?”• “Where are we going?”An assessment is often the foundation for strategic decisions,which answer to another question:• “How are we getting there?”The four questions form the bases for the StrategicManagement Process. Strategic Management involvesawareness of how successful and strong the organisation andits strategies are, and of how the circumstances are changing.Figure 1: The Strategic Square• StakeholdersAnalysis• Citizens demandand expectations• Environmentalassessment(Political, Economic,Social, Technological)• Citizens satisfaction• Environmental fitStrategicDirectionStrategicDecisionsHow arewedoing?Whereare wegoing?Whereare we?How arewegettingthere?SituationAppraisalSituationAssessment• Implementation• Monitoring• Internalassessment(Mission, Objectives,Strategy, Tactics)• Organisationalmodel
  4. 4. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 32. Environmental AnalysisThe environment is more turbulent than in the past. Managingit and operating in it demand more flexibility and morediscontinuity than in the past.The Environmental Analysis will enable you to:• Understand the nature and degree of uncertainty in theenvironment• Determine the opportunities that can be built upon and thethreats to be overcome or circumvented by theorganization• Create a higher level of sensitivity to the signals in theenvironment• Enable the organization to match its capabilitieseffectively and efficiently to its external environmentthrough creating and implementing the relevant strategy• Determine the degree to which proactive managementcan increase the control by the organization over itsenvironment.PEST AnalysisA PEST analysis is a framework that categorisesenvironmental influences as political, economic, social andtechnological. The economy dictates the country’s growth,and this has some consequences on the level of services thatthe citizens expect from a public organisation. Economicconditions are often influenced by politics and governmentpolicy. Economy and policy shape the socio-cultural
  5. 5. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 4environment that encapsulates demand and expectations fromthe citizens. Technology derives for one part from the socio-cultural development and can force organisation to adjust itsstrategy and even the kind of services it has to deliver to thepublic.The objectives of carrying out a PEST analysis for anyorganisation is to:• Determine the key environmental influences on thatorganisation• Examine the impact of the external influences.Figure 2: Example of PEST analysis for the OSSStakeholdersStakeholders are individuals or groups who have interests inthe organisation and also have the potential to influencewhether the organisation attains its long-term goals. It isnecessary to determine the views of all stakeholders on theimpact of the key environmental influences.Political: the new decree 181/2003promotes the replication of OSS atdistricts levels. The Partyencourages more transparencyand accountability in publicorganisations, etc.Economic: Strong economicgrowth in 2003 and 2004 of over7%/year. Increased demands forbusiness licenses and householdsregistration, etc.Social: Strong growth profits onlymarginally to the poor, that expectseasier and less costly access topublic services, especially relatedto education and small credits, etc.Technological: Computers arepopular tools, Intranet is alreadydeveloped at provincial level,opportunity for linking OSS districtsand province for deliveringadditional services, etc.
  6. 6. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 5When examining stakeholders, it is useful to distinguishbetween two groups:• The inner circle of stakeholders who engage in directrelationships with the organisation (leaders, employees,citizens, etc.)• The outer circle whose influence is more indirect anddiffuse (media, donor community, etc.).3. Organisational StrategyAn organisation’s current strategy may be assessed byanalysis of the Mission, Objectives, Strategy and Tactics,also known as MOST analysis.Key questions to consider when analysing an organisation’smission statement include:• Is the mission explicit or implicit?• What is the purpose of the mission? Is it an externalpublic relations exercise or is it internally focuses as a toolfor staff motivation?• Does is provide a basis for task and resource allocation?• Does it provide direction?• Does it make clear the values of the organisation?Objectives provide a yardstick against which progress inachieving a mission can be measured. Good objectives for anorganisation should be:• Clear, focus and specific• Measurable• Feasible and acceptable for those involved• Consistent with the strategy of the organisation.
  7. 7. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 6When evaluating the strategy of an organisation, key pointsto consider include:• Does the strategy help achieve the objectives and missionof the organisation?• Is the strategy coherent and clear?• Does the strategy provide direction and purpose?• Does the strategy address the real issues?• What assumptions are made of the external and internalenvironments?• How is the strategy to be implemented?Tactics are means by which a strategy is implemented on aday-to-day basis. When examining the tactics of theorganisation consider whether they are:• Focused• Adaptable• In line with the strategy of the organisation.4. Organisational ModelAn organisational model developed by McKinsey provides auseful framework to analysing all the aspects of anorganisation. The McKinsey model identifies seven interrelateddimensions which determine an organisation’s effectiveness:• Structure: organisational chart, job descriptions. Look atthe organisation chart. Is the structure appropriate withthe strategy?• Systems: procedures for getting things done. Reviewyour systems of planning, control and performance. Dothey help your organisation to be effective?
  8. 8. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 7• Style: the way management behaves, including howmanagement shows what it considers important. Howwould you describe the style of your organisation?• Staff: the people, their strengths and weaknesses. Is yourstaff well trained, competent and well motivated? Arethere any significant shortages?• Shared values: the values that determine the culture ofthe organisation. How would you describe the values ofyour organisation as they get expressed in decisions andactions?• Skills: Those capabilities possessed by an organisationas a whole. What your organisation’s key skills and corecompetence?• Strategy: a coherent set of actions aimed at providingsuperior services to citizens within allocated resources.What are the key elements of your strategy?Figure 3: The 7S frameworkStructureSharedvaluesSystemsStyleStrategyStaffSkills
  9. 9. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 8As the diagram shows, all the seven dimensions areinterconnected and interrelated. As one changes, therefore,there will have an influence on the others. Changes may stemfrom any of the seven dimensions and will have different levelsof effects on the others depending on the extent andimplications of the changes. If an organisation promoteschange in one dimension, without acknowledging the needs toaddress the other dimensions, it will result in a misalignment ofthe different aspects of the organisation. This is likely toreduce the effectiveness of the change, so the performance ofthe organisation.5. SWOT AnalysisFigure 4: SWOT MatrixInternal analysis Strengths WeaknessesExternal analysis Opportunities ThreatsOnce the analyses of the environment and strategicpositioning of the organisation are completed, a useful way ofbringing all the issues together is by using a SWOT analysis.SWOT stands for Strengths, Weaknesses, Opportunities,Threats and is a tool for analysing and summarizing anorganisation’s strategic position and the extent to which it isable to cope with the environment. The technique can be usedto match the threats and opportunities external to the
  10. 10. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 9organisation onto its external strengths and weaknesses inorder to generate viable strategic options for the future.The key to carry out a successful SWOT analysis is to ensurethat the main points in each box:• Deal with specifics and avoid available generalisations• Are listed in order of importance• Are limited to the most important six or seven factors.Once the points have been entered into the matrix theorganisational position and potential may be analysed.The principal idea, in terms of strategy formulation andstrategic positioning for the future, is to maximise the strengthsof the organisation in relation to potential opportunities, whilstminimising the weaknesses and threats. It is important toremember, however, that strengths, weaknesses, opportunitiesand threats are relative concepts, relative, that is, to otherorganisations.Figure 5: Example of SWOT for OSS ModelStrengths:• Efficient services delivery• Fit into existing organisationalstructure• Etc.Weaknesses:• No regular monitoring• Staff not enough motivated• Weak customer-orientation• Etc.Opportunities:• Backed up by Decree 181• Praised by happy citizens• Wide support from donorcommunity• Etc.Threats:• Lack of national guidelines andstrategy for replication atcommunes level• Model is sometimes “adjusted”by the local authorities tocomply with local politic• Etc.
  11. 11. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 106. Environmental fitEnvironmental fit is an analysis based on the integration andinterrelation between environment, values and resources. It iscalled E-V-R congruence. E-V-R provides a straightforwardframework for assessing the organisation’s existing strategiesand strategic needs. It is common that values are included in aSWOT analysis as a resource, but it is sometimes useful toseparate them, especially with regard to wider societal issuesthat a public organisation has to face.Figure 6: E-V-R congruenceStrengths andweaknessesOpportunities andthreatsLeadership and cultureResourcesValuesEnvironment
  12. 12. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 117. SummaryMany frameworks are used for assessing an organisationcapabilities and position. Depending on the type of theorganisation and its specific mission, a specific framework willbe employed. The figure below intends to describe the linksbetween all these tools.Internal External• MOST• 7S• PEST• Stakeholders analysisS OW TERV
  13. 13. DUDP Learning Centre: 8. Organisational AssessmentDong Hoi Urban Development Project 12
  14. 14. Information and additional copies:ELECTROWATT-INFRA VIETNAMDong Hoi Urban Development ProjectQuang Trung 19 – Dong Hoi QBTel 052 821 378; Fax 052 821 374Email: ewedh@dng.vnn.vnDong Hoi Urban Development Project is funded by the Swiss Agencyfor Development and Co-operation