This document discusses various tools in a manager's toolkit that can be used to analyze an organization and its external environment. It describes the 7s framework, PESTEL analysis, Porter's five forces model, and organizational control. The 7s framework examines an organization's strategy, structure, systems, shared values, style, staff, and skills. PESTEL analysis assesses political, economic, social, technological, legal and environmental factors. Porter's five forces model evaluates competitive rivalry, threat of new entrants, supplier and buyer power, and substitute threats. Organizational control involves how managers distribute control within a hierarchy. These tools provide frameworks to help managers make strategic decisions.
2. Table of Contents
Introduction.............................................................................................................................................3
Body paragraph.......................................................................................................................................3
1. 7’s Framework.............................................................................................................................3
Hard Skills.......................................................................................................................................4
Soft Skills:.......................................................................................................................................4
2. Organizational Control.................................................................................................................5
3. PESTAL Analysis........................................................................................................................5
Political ...........................................................................................................................................6
Economical......................................................................................................................................6
Social ..............................................................................................................................................7
Technological..................................................................................................................................7
Legal ...............................................................................................................................................7
Environmental .................................................................................................................................7
4. Porters five force frameworks ......................................................................................................8
Rivalry among Existing Competitors................................................................................................8
The threat of New Entrants ..............................................................................................................9
Bargaining Power of Suppliers.........................................................................................................9
Bargaining power of buyers ...........................................................................................................10
The threat of substitute (products and services) ..............................................................................10
Conclusion:...........................................................................................................................................11
Bibliography .........................................................................................................................................12
3. Introduction
Manager’s tool kit is the kit that is used by the managers in the organization to manage it. The
tool kit is used by the managers to change the organization in why it can help the managers to
achieve the organizational goals. The manager’s tool kit he many components that are used by
the giant organization. This tool kit helps the managers to see outside the organization as well as
inside the organization (Crawford:, 2011). The managers make the decisions by using these tools
so that know what is happening in the organization and out of the organization. This tool kit is
relying on the different components that are given by different scholars. Here are some tools of
the tool kit:
1. Organizational Change
2. PESTEL Analysis
3. Porter’s Five Force Model
4. 7’s framework
5. The Market Structure Analysis
Other than these many other tools help the managers in planning organizing leading and
controlling the organization. Every organization uses these tools, some of them use all these tools
and some of them only use the selected tools. The manager’s tool kit helps the manager in
surviving in the climate change, that climate may be within the organization or our side of the
organization (Aitken & Crawford, 2008).
Body paragraph
Some of the manager’s tool kit tools are discussed below:
1. 7’s Framework
The 7’s framework is given by Tom Peters and Robert Waterman in the 1970s. These both were
the consultant at McKinsey &company. This framework is also known as McKinsey 7’s
framework. The managers of different organizations use this framework as the tool to make
decisions for the better performance of the organization. It helps in taking the internal decision of
the organization (Ravanfar, 2015). The 7's are the combination of different skills of the
employee. Out of 7s, 3s are related to hard skills and the remaining 4s are related to soft skills.
4. Hard Skills Soft Skills
Strategy Style
Structure Staff
System Skills
Shared Values.
Hard Skills
1. Strategy:
The plan is developed by the manager of the organization to achieve the goals and
objectives of the organization. The goals are made to achieve the competitive advantage
of the organization which helps the organization to get success as compared to its
competitive company (Morgan, 1991).
2. Structure:
The division of the organization into different units to flow the information from one
position to another position is known as the structure. The organization is divided into
different units because it helps the managers and employees to make communication easy
(Ahmady, Mehrpour, & Nikooravesh, 2016). It is also known as the hierarchy of the
organization. The manager makes the structure in a way that can help in conveying the
information from top management to lower management.
3. System:
It is the complete procedure of the company that helps the organization operate in a
standard way (J.Colema & D.Palmer, 2018). The manager always tries to maintain their
employees that they can work with the standard and no one can work with their wish. The
system helps the managers and employees to work at the same pace.
Soft Skills:
1. Skills:
The abilities that are used by the employees to perform the work within the organization
are known as Skills (Laud, Arevalo, & Johnson, 2016). The managers always try to
enhance the skills of the employees so they can perform better and better and give bet
output.
2. Staff:
5. The employees who are working in the organization and help them in achieving the goals
are known as the staff (Osborne & Hammoud, 2017). The managers always try to find
out the vacant position so they can fill it by hiring a new employee. The hiring of new
will help to boost the performance of the company.
3. Style:
It is the behavior of the top management that how they behave and handle the
organization which helps in boosting up the performance of the company.
4. Shared Values:
The culture of the organization is known as shared values. The manager is the one who
helps in creating the values that are shared between the employees so the friendly
environment will create help in the growing the performance of the company (Badovick
& Beatty, 2011).
2. Organizational Control
The organization control is another tool from the manager's tool kit. The organization control
helps the organization in decision making to improve the performance of the company.
Organization controls are the process by which managers or agents of the organization able and
establish to control the organization (Briand, 2016). In this tool, the managers distribute the
power of controlling the work of the organization. The control is divided to support and get
accurate results; the control may be over the employees or the systems. The control is divided
based on trust, the managers give control only to those employees who can be trusted; otherwise,
they do not divide the control (JohnChild, 2015). Control is divided in a way like each manager
will handle ten employees or each manager will supervise ten employees. This helps the
managers to work on any target that will easy to achieve easily. Organizational control is
distributed according to the hierarchy basis. The top management will control middle
management and middle management will control lower management, and so on.
3. PESTAL Analysis
External factors affect the business productivity and work quality of the employees of
organizations. The concept of this comes from the strategic management of the business which
classifies the external risk in the business. It normally tells about the risk of the business and
6. those risks are coming from the external side of business like the social environment of markets
competitors and government etc.
The word PESTLE is a combination of a few other words like Political, Economic, Social,
Technological, Legal, and environmental. They evaluate the impact of Political, Economic,
Social, Technological, Legal, and environmental on the business; these all things affect the
organization's work activities and these all are impacting the employees and managers also.
When managers decide to open new business managers need to do pestle analysis (RASTOGI &
TRIVEDI, 2016).
These are the main benefits of the PESTLE analysis:
Pestle analysis helps managers to stain business in the opportunities and it informs and to
give suggestions in threats.
Pestle analysis exposes the particular direction of the change with the business
environment it tells about the people that either he/she would be work with change or not.
How does he/she will do the work?
Pestle analysis helps new businesses to avoid things which bring them to words failures
and tell them how to handle and control the things.
Pestle analysis help new business to know about the country, region, and the market that
how to open a new business and what type of market is this? And how I am as a new
business will survive.
Political
This factor considers the level to which the government affects the economy or the
industries. Like businesses pay the tax to the government so the profit of the company will be
affected because of government taxes. These political factors consist of tax policies, fiscal
policy, and monetary policy (S. H. Wearne, 2002)
Economical
This factor considers the performance of the economy which affects the business and
resonate its effect for the long term. Suppose the inflation rate will high in the economical
prices of the products of companies would be increased and it affects the businesses in terms
of demand due to high prices. The demand for the product will be decreased and this will
7. affect the business profitability through this the consumer's buying power is declined people
were unable to afford high priced products due to inflation. These Economical factors consist
of the interest rate, inflation rate, and economic growth patterns (PESTLE Analysis, 2020).
Social
In this factor the all social events affected the markets and communities socially. This
sociology has both merits and demerits because people of the society who are part of our
business also need to be involved in this. As people worked and those who are our targeted
people were diverse Hindus Muslims they all have there on cultural events like Independence
Day holy Christmas. And people expect these events to celebrate with their norms ethics
values and healthy and happy so the business would be affected through this social society.
Technological
This factor is related to the changes in innovations in technology that may impact the
processes of the business and the market favorably and unfavorably. This is related to the
awareness of technology to the market with the new things that were coming in the market
through different software and all. This thing comes through research and the development of
authentic and innovative things. This will help the business in the financial decisions and it
also affects the business and helps the manager in decisions (Eliufoo, 2018).
Legal
In this factor laws and regulations are related to the business and the management decision-
making. According to laws and the government policies business works, laws were strictly
followed by successful businesses. And this is related to these factors import, export,
employment, resources, and taxation. Different types of laws are their like labor law, safety
and security law, and consumer law.
Environmental
In this factor whole, the surrounding will be considered in the surrounding all the elements
influence these are not limited and less this is broad and large and they effect on the business
strategies and the profits also. These environmental consist of climate, weather, global
change in the climate, geographic changes, and climate changes. So this helps and influences
the business and its decision making.
8. 4. Porters five force frameworks
Porters’ five forces framework is:
1. Rivalry existing competitors
2. The threat of new entrants
3. Bargaining power of suppliers
4. Bargaining power of buyers
5. Substitute products and services
It is based on the perception that the strategies of the organization should be meeting with
opportunities and threats to the businesses in external sites. It argued by porters with the
strategist that competitive environments always looking at the competitors. (Porter, 1997)
The five forces framework is a significant and straightforward tool for the recognition of few
powers in the procession with particular business conditions by working in the perspective in the
outside. (Johnson, K.Scholes, & R.Whittington, 2008). This framework consists of five forces
and these all forces were varying from one another in the environment that makes a competition
and organization's profit is at risk. This framework is depending on the economic industry and
organizational economy which is (IO) approach.
Rivalry among Existing Competitors
In existing competitors if the rivalry occurred it is important; through this industry suffers in
terms of profitability and the new organizations and at that time prices will be discounted of the
products and create campaigns of advertising the services where advanced (Porter, 1997). In this,
it is necessary to know how the industry growth rate will increase and how the fixed cost will
manage and how many competitors were available in markets. In this variation between the two
things one is the cost of switching and the other is the barrier that exists (Hubbard & Beamish,
2011). It will help the management of the organization that how to handle the costs and
reputation of the business in the market. How they motivate their employees to work with
efficient skills to get a competitive advantage. They also need to provide different motivations to
their employees because through this employees will engage with work and employees were
happy with the organization than rivalry is not that much harmful to the business or industry
because their workforce and management is more efficiently work than competitor
9. The threat of New Entrants
When new business comes to the industry, they bring a new capacity and it will bring new needs
and wants in the market to get market shares and it will produce difficulty in the prices. It is
important to compete with cost and investment rate (Porter, 1997). It depends upon the high
entry blockade and industry possesses how many firms it impact on the competitive advantage
directly (Johnson, K.Scholes, & R.Whittington, 2008). The profit margin would be decreased for
all the market members because the demand for extra products and services would not be
decreased or increased.
Seven blockades would be defined by porters (1985) that are:
1. The supply side of the economy
2. The scale of benefits of the Demand side
3. Switching cost of customers
4. Requirements of the capitals
5. Advantages independent of the size of the incumbency
6. The entry is unequal in the distribution channels
7. Strict policies of the government
It is an important practice for the organization to examine the barriers to entry and it is most
essential for the new business entrance to overcome the barriers to entry without invalidity and a
huge investment when entering the market or industry of profitability.
When organizations have a quality workforce they don't need to become more worried about
their investment because their workers and management work properly (Pringle & Huisman,
2011). Like employees give the quality of goods and services and managers take the quality of
decisions so they can be entered in the market successfully.
Bargaining Power of Suppliers
This is an unfavorable/negative impact on the profitability of an industry as a supplier so they
can give threats to the organizations by increasing the prices of their raw material. There are so
many causes of high bargaining power suppliers like few organizations were dominate in the
industry they more focus and that why industry sells or that organization is not that much
important customer for the suppliers' team (Porter, 1997). The bargaining power of suppliers
would be influenced by the supplier size, supplier numbers, and the accessibility of the customer
10. substitute (Slater & Olson, 2002). The significant aspect to the supplier's power is the power of
the customers; they may be decreases the prices and want the quality of material, and increases
the services maybe they negatively affect the outcomes of the industry.
Bargaining power of buyers
In the market monopoly situation occurs it beneficial for the customers to switch towards
competitors because if the seller not bargaining over the prices customers have their alternatives.
And in this monopoly situation of the market the greatest bargaining is occurred due to the same
product and services sellers are present in the market or alternative are present conveniently in
the market (Slater & Olson, 2002). Buyers were forces by the suppliers to decreases the prices, a
buyer focuses on these things:
1. Many buyers and many suppliers
2. Few buyers few suppliers
3. Few suppliers and many buyers
When buyers were in a strong and powerful position sellers try to find ways to give some
products where buyers are agreed to pay the price as the seller wants and when the buyer is
switching to the alternative some cost would be incurred on the buyers' side. Although this is a
difficult thing for the suppliers to do that thing and for managing the loyalty suppliers arrange the
programs for the buyers and give them more value than the other competitors (Bruijl, 2018).
The threat of substitute (products and services)
For products and services substitutes were recognized that can meet with the same objective as
the industry’s products of the regard the industry. These are the factors which affect the threat of
substitute products and services (Hubbard & Beamish, 2011)
1. Difference between the cost of the substitute and industry products
2. Buyer's addiction to buying substitute
Convenience, Time, and Application these three attributes give the concept of the threat of
substitute profitability is suffers during the high threat of substitute (Pringle & Huisman, 2011).
11. Conclusion:
By using the manager’s tool kit, the manager can control the organization in a way that gives the
organization better performance. The tool kit is used in every organization to improve
performance in different ways. The above is not only the tools but many other tools help in
increasing the performance. These tools help the managers to plan, organize, lead, and control
the organization, its goals, and objective so it can make the employees a competitive advantage
for the company.
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