The Organisation Level Diagnosis

02 Nov 2017

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Session 12: Autumn Leaves Aged Care Inc WA

Organisation-Level Diagnosis

Inputs

Part 1 General Environment (Danny)

Social, technological, economic, ecology, political forces

General Environment refers to the external factors that affect the reaching of the goals of the company objectives. The amount of social, technological, economic, ecology and political forces are forces that can prevent the company from reaching it effective strategy positions.

The Social forces can refers to the mixture of the workforce diversity, the society’s attitudes and Cultural values and the concerns about the working environment and the external environment that encompass within the work done.

The Technological forces can refer to the innovations on the product, the applications of the knowledge and also focus of private and government-related or supported researched and development expenditures.

The Economic forces can refer to the inflation and interest rates, deficits or surpluses of the trade or budget and savings rate for both personal and businesses.

The Ecology forces can refer to environmental differences, environment politics and ecosystem of the company.

The Political forces can refer the laws that emphasis taxations, philosophies of deregulations and laws for labour.

All these forces have contributed to the changes of a company objectives and directions. The more uncertainty in the external environment, which could affect the organisation, the more difficult it, is to design an effective orientation strategy.

Part 2 Industry Structure (Danny & Jason)

Michael porter’s 5 forces

The 5 forces that Michael porter had mention consist of the following: suppliers, buyers, threats or entry, threats of substitutes and rivalry among competitors.

Suppliers: The strategic structure must be sensitive to the powerful suppliers who can increase their prices (and therefore lowering their profits). They are able to force the organisation to give more attention to the needs of the suppliers than the organisations needs. Union can be regards as a powerful supplier who can supply workers that can affect the costs of any organisation within the industry.

Buyers: The strategic orientation got to be sensitive towards the powerful buyers. For example Quantas Airlines or country governments, they are those companies who are potential powerful buyers that purchase aeroplanes. They can force Airbus, McDonnell-Douglas or Boeing to lower their prices or force them to be appointed in their particular ways.

Threat of entry: The strategic orientation must be sensitive to the entry of any new firms entering into the competition. The ease of starting a new restaurant business in the food industry makes the profits of the organisation to be declining. Therefore understand the needs of the consumer and the niche of the industry can help to leverage the income.

Threats of substitutes: The strategic orientation got to be sensitive to the threat of a new products or services that can replace existing one. Ice cream is one of the examples that can be substitute with frozen yogurt or any other types of dessert, especially when the costs or prices become more expensive.

Rivalry among competitors: The strategic orientation must be sensitive to the rivalry among existing competitors. In order for the organisation to be prosper or survive long in the industry, the organisation must be careful and have to keep monitoring their product or services that they can offer, the costs and their structure.

No matter whether it is a manufacturing firm, a non-profit organisation or a government agency, Michael Porter’s 5 forces play an important role in determine the success of the organisation.

Both the general environment and industry structures changes over time, therefore the process of designing a strategic orientation makes it more difficult to be implemented.

Strategic Orientation (Design Components)

Part 3 Strategy (Jason)

Mission, goals/objectives, intent, policies

A Strategy is a Mission, goals/objectives statement that describes how an organisation would use its resources such as human, economic or technical to gain and sustain a competitive advantage.

Indian Ocean Finance (IOF) Pty Ltd was a highly conservative organisation with stability reputation of steady returns for many years.

Ced was a 32-year-old chief financial officer with forceful personality and enthusiasm came up with a business proposal venturing into Autumn Leaves Aged Care Inc WA based on only two sales points.

Some board members have concerns about entering into an unfamiliar market but still accepted Ced’s proposal. The next big mistake was by making Ced as the CEO and empowering him with full rein to establish the first facility.

To make matter worse, Ced failed to bring in the right staffs with the correct skill sets and knowledge and instead called his favours in and delegated them to get things up and running. Ced also failed to spend time on the details by checking thoroughly on the aged care regulatory component and its profitability.

Apparently Indian Ocean Finance (IOF) Pty Ltd did not have a mission statement to state its long-term purpose, range of products or services offered, markets to be served and the social needs served by the organisation.

Its Goals and objectives is also absent as they could provide clear direction, set the organisation priorities, provide guidelines for the management’s decision, designing jobs and setting achievement standards.

The organisation also failed to have a system in place to set and measure achievement targets, such as business profit, employee’s performance and productivity levels.

If Indian Ocean Finance (IOF) Pty Ltd has its strategy of Mission, and goals/objectives, then they would not have venture into Autumn Leaves Aged Care Inc WA and wrongly appointed Ced to be its CEO.

Part 4 Organisation Structure (Chloe, Melissa)

Core activity system, Structural system Measurement system, Human Resource system

Culture

The structural system is how task can be completed in an accurate and order manner. Organizing workflow where work can be divided can do this equally among department. Therefore to make the task to be done perfectly, structural and core activities system need to be closely aligned.

There are two ways to determine how organization divides its work. One of it is call the formal structure. Those with responsibility for managing the organization, which enable the organization to meet its stated, organize formal structure objectives. This can concern with the relationship between authority and subordinates where hierarchical organization begins at the top with the most senior leader and then cascades down to the subordinate managers and then subordinate employees below those managers. However more employee prefer informal structure as it saves people time and effort where making easier to work.

The other one is call the Differentiation and integration where this theme was developed by Lawrence and Lorsch (1967).

Where an organization needs to find it ways of splitting out the different tasks it must achieve in order to accomplish its main purposes without losing overall coordination and integration.

Differentiation - is divided up in an organization. When an organization becomes more compounds, one person can no longer carry out the entire task given, so there is a need to divide up tasks among people, and thus specialists emerge. For example, a jewelry manufacturer may require dedicated sections to acquire resources, to transmute inputs into output and to deliver the product to customers or to participative vendors, as well as people to manage these specialized sections. Never the less it will be tougher for people in different department to keep in contact among one another when the organization grows as well as having more pressure.

Integration - can be used to designate the point to which members of several departments work together in an integrated manner. They emphasize that while departments should work together and their jobs should be combined where necessary, it is important not to decrease the differences that contribute to job accomplishment.

The measurement system is using a variety of methods to assemble the data collected on the operations and activities on the organisation’s groups and individual. From the data, organisation can assess the performance of the operations based on the goals that the company has set. This would also better coordinate the work in the organisation as information on work activity performance is being effectively communicated to the organisation members (Waddell, 2007).

The human resource system is with regards to the mechanisms of organisation members such as developing, appraising and rewarding. This would enable the organisation members to know the importance of having certain skills and knowledge that is essential to the work activities related in the organisation (Waddell, 2007). Not only is It crucial for organisation members to apply their relevant abilities to their duty, recognizing their performance by rewarding through either monetary or incentive means a lot to show that the organisation is appreciating their contribution.

Outputs

Part 5 Organisation Performance, Productivity, Stakeholder Satisfaction (Jia hui)

Outputs are the result of what is transformed by a system and sent to the environment. The inputs have been transformed represent outputs ready to leave the system.

There are three types of components in the outputs of strategic orientation,

Organisation Performance

Productivity

Stakeholder Satisfaction

Organisation performance refers to the financial outputs such as profits, return on investment and earning. For those non-profits and governmental agencies, performance often refers to the extent to which costs were lowered or budgets met as well as other performance measures.

Productivity mainly concerns about the internal measurements of efficiency like the sales per employees, wastage, error rates, quality or units produced per hour.

Stakeholder satisfaction shown how well the organisation has met the expectations of different groups. Examples, Customer satisfaction can be measured in term of market share or focus group date; employee satisfaction can be measured in terms of opinion survey and investor satisfaction is measured in term of share prices.



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