Business Alignment (20%) Flashcards
3 aspects business change must align to
External Environment
This is the business environment within which the organisation operates.
Enterprise Architecture
All business changes must align with the enterprise architecture of an organisation, including the business, applications, data and technology architectures.
Strategic Direction (VMOST)
Business change proposals should align with the vision, mission, objectives, strategy and tactics defined for an organisation.
Describe the External Environment in the context of the alignment in the business change life cycle.
This is the business environment within which the organisation operates. This environment imposes trends, rules and constraints upon the organisation that it cannot change or influence. Understanding the external environment helps to ensure that change proposals are in alignment with the factors that exist within this environment. This analysis may also lead to the identification of opportunities available to the organisation and threats to it.
Techniques such as PESTLE and Porter’s Five-Forces analysis provide a basis for analysing the external environment for an organisation.
Describe the Enterprise Architecture in the context of the alignment in the business change life cycle.
All business changes must align with the enterprise architecture of an organisation, including the business, applications, data and technology architectures. It also helps us question the what, how, where, who, when and why of business systems change.
Describe Strategic Direction / VMOST in the context of the alignment in the business change life cycle.
Strategic Direction (VMOST)
Business change proposals should align with the vision, mission, objectives, strategy and tactics defined for an organisation. This ensures that changes are supportive of this overall direction.
A VMOST analysis may also identify strengths or weaknesses inherent within an organisation, for example, through considering the coherence and relevance of its strategic direction.
Explain the process and techniques used to develop a SWOT analysis
xamination of the SWOT creates an understanding of the current position of the organisation and helps to identify issues to be addressed, for example, to identify where:
- The organisation needs to make changes in order to ward off threats
- There are opportunities for the organisation to grow or improve
- The organisation has strengths that may be utilised in order to overcome threats or grasp opportunities
- The organisation has weaknesses that need to be overcome if required changes are to be successful
SWOT - Internal and External
Strengths & Weaknesses: Internal
Opportunities & Threats: External
What other techniques can we used alongside SWOT for more rigorous analysis?
PESTLE and Porter’s Five-Forces analysis (External)
VMOST and Resource Audit - S&W (Internal)
Name techniques used to analyse the external environment
PESTLE and Porter’s Five-Forces
Explain the PESTLE analysis
Political
The political influences. For example, the prevailing political intent or focus, the level of political uncertainty or instability, or the international political situation.
Economic
The state of the economy, both nationally and globally. For example, the level of economic success or the amount of disposable income available to people.
Socio-Cultural
Movements and developments within society. For example, customer preferences or demographic trends.
Technological
The development of new and emerging technologies. For example, IT, engineering or manufacturing technologies.
Legal
Legislative changes at national and international levels. For example, data protection, health and safety or financial legislation.
Environmental
Concerns for the environment, or the ‘green’ factors. For example, those relating to transport or packaging.
Porters Five-Forces analysis
Porter’s Five-Forces and aspects to consider for each of the forces are:
Industry competitors and rivals
What is the intensity of the rivalry or competition between existing firms in the industry?
Bargaining power of suppliers
What is their level of bargaining power relative to the organisation under consideration?
Bargaining power of buyers
What is their level of bargaining power relative to the organisation under consideration?
Threat from potential new entrants
Are there barriers that will prevent new organisations from entering the market
Threat from possible substitute products or services
Are there products or services that may be used as alternatives?
Name techniques to analyse the internal environment
VMOST and Resource Audit
Explain the VMOST analysis
VMOST provides a framework for the examination of the direction and focus of an organisation. The results of a VMOST analysis can be used to populate the strengths and weaknesses elements of the SWOT
Vision
Where does org see itself in the future? A sense of journey
Mission
The overall direction for the organisation. The purpose/ why does it exist
Objectives
HL goals to be achieved by the organisation in SMART. An example objective might be ‘to increase sales of our product by 30% and profitability by 50% by 20xx’.
Strategy
The long-term approach to achieving the organisation’s objectives. E.g. expand into new markets
Tactics
The short-term means used to deliver the strategy such as deploying new IT systems, improving products or enhancing customer experiences.
Explain the Resource Audit
A resource audit offers insights into the strengths and weaknesses within an organisation through the analysis of five aspects. The types of resources to investigate are:
- The physical resources that the organisation owns or has access to. This includes features such as buildings, land and equipment. The classification of the resources, such as age, condition and situation, should also be considered
- The financial resources that determine the organisation’s financial stability, capacity to invest in new resources and ability to weather fluctuations in the market. The management of debtors and creditors may also be considered
- The human resources and their expertise, adaptability and commitment to the organisation
- The know-how owned by the organisation. This may include patents or trademarks and may be derived from the use made of information and technology within the organisation. Intellectual properties and patents are also included in this category
- The reputation of the organisation, for example, the brand recognition and the belief that is held about the quality of the brand, and the goodwill that this produces
Name the frameworks used when analysing organisational culture
Charles Handy’s organisational cultures and the Cultural Web by Johnson et al
4 cultures within Handy’s Model
Power / Role / People / Task
What is Power Culture
Power is centralised in the top executives of the organisation
What is Role Culture
Bureaucracy with highly structured, well documented procedures
What is Task Culture
Getting things done through empowerment/flexibility/teams
What is Person Culture
Focused on the individuals who may be connected through a common set of strong values
Hofstede 5 dimensions of national culture
Power distance
Individualism
Long term / short term orientation
Uncertainty avoidance
Masculine/feminine
Power distance national culture
A high power distance - expectation that power is distributed unequally and less likely to question person at the top
Individualism national culture
People expected to look after themselves and their family
Opposite = collectivism
Masculine national culture
Values such as assertiveness/competitiveness prevail and women more likely to be equal
Opposite = feminine
Uncertainty avoidance culture
Low tolerance for uncertainty and ambiguity
Long term oriented culture
Long term - thrift and perseverance are valued more
Short-term- respect for tradition and reciprocation of gifts and favours are valued more
6 Elements of The Cultural Web (Johnson)
Stories
Symbols
Power Structures
Organisational Structures
Control Systems
Rituals & Routines
The Paradigm
Stories - The Cultural Web
Narratives/anecdotes that employees share about the organization
Symbols - The Cultural Web
Visual representations of the organizations culture (logos/office layout/dress code)
Power Structures - The Cultural Web
The distribution of power and influence within the organisation
Organisational Structures - The Cultural Web
How is work organised - hierarchy / comms channels / decision making process
Control Systems - The Cultural Web
Processes and procedures to monitor and manage employee performance
Rituals & Routines - The Cultural Web
Repetitive actions and behaviours that define an organisation’s culture (daily routines/social events/repeated traditions)
Balanced business scorecard
The BSC (Kaplan and Norton, 1996) provides a means by which to assess the breadth
and balance of ‘goals’ and ‘objectives’ that the organisation uses to measure strategic
performance.
Historically many organisations have focused on financial performance but need to balance other areas which can in turn improve the financial performance
4 elements: Financial / Customer / Internal Processes / Learning & Growth
Each perspective has goals and associated measurements
e.g. Goal - improve customer satisfaction. Measurement - KPI: NPS Target: 75+
All goals and performance measures should support the vision and biz strategy
Critical Success Factors (CSF)
Areas of the organisation that must succeed to achieve position performance and meet objectives.
Broad statement such as customer service / low costs
Types of CSF
Industry wide - necessary for any org operating within a particular business domain/market i.e. all airlines have ‘safety of operations’ as a CSF
Organisation specific - area of performance that enable an organisation to outperform its competition (key differentiators) e.g. ‘low cost’ for Ryanair
KPI
KPIs are related to the CSFs, and define the specific areas to be monitored in order
to determine whether the required level of performance has been achieved.
E.g. the volume of complaints received over a defined time period, and the percentage of customers rating the organisation ‘very good’ or ‘excellent’ in a customer perception
survey.
Since KPIs are related to CSFs, they need to be defined for both the industry-wide and
the organisation-specific areas.
