Organisational Analysis

Topics: Ethics, Business ethics, Strategic management Pages: 8 (2918 words) Published: April 25, 2013
Organisational Analysis
With growing competition, especially from the impact of globalization (Hamilton et. al, 2009), it is crucial for an organisation to develop strategies which maintain their survival, growth and success (Mullins, 2010) “The environment is the external context in which organisations find themselves undertaking their activities” (Capon, 2009, p5). Assessing the external environment is thus a crucial part of any business strategy. Organisations can either react as of when change occurs, or they can anticipate the changes and develop strategies to respond to them by being pro-active (Kew & Stredwick, 2010). By careful and accurate analysis of external factors, organisations will be able to predict future trends allowing them to respond effectively to changes, to foresee future threats and opportunities, and lead to greater development of long-term strategic decisions (Capon, 2009; Farnham, 2010). Ultimately providing a greater understanding of the context of the organisation operates in can determine the future of their organisation. There are various methods to analyse the general external environment which can benefit organisations. However it is worth noting that analysing the external environment can be time consuming, costly and create excess information, it is therefore vital to distinguish between what is important and relevant for the organisation and what is not (Grant, 2010). According to Farnham (2010) the process of environmental analysis can be divided into four stages: scanning, monitoring, forecasting and assessment. By application of these stages organisations can ensure they understand the dynamics of each context before arriving to a decision. In particular links between improved organisation performance and environmental scanning provide evidence to show that organisations are likely to succeed when they are “in tune” with what is going on in their environment (Slaughter, 1999; Choo, 1995). STEEPLE ANALYSIS

Since its primary introduction by Aguilar (1967) PEST has become a widely used external analysis tool, analysing organisations environmental influences (CIPD, 2012). The successes of PEST lead to extensions such as PESTLE and STEEPLE which introduced legal, environmental and ethical factors (Kew &Stredwick, 2010; Ward & Rivani, 2005). The following report will focus on the STEEPLE model as the ethical factor reflects and represents the current era which recognises organisations corporate social responsibilities (Kew & Stredwick, 2010). The STEEPLE analysis is a framework for macro-environmental factors which not only allow an examination of outside influences but also assist in future predictions, in order to strategize business decisions effectively (Farnham, 2010). STEEPLE differs from other organisational tools, such as Michael Porters 5 Factors model (PF5 model), in that it is detached from the organisations in which it operates; leading to Ward & Rivani (2005) describing the framework as “providing a satellite view” of the organisation. This means that whilst the organisation can use the model in order to change their strategies and future plans, they are unable to manipulate the factors to coincide with the organisations objectives. According to Buchanan (2010) using such a tool can be beneficial as it encourages analysis of various external factors which could affect the internal organisation as well as organising complex factors into a framework that can be understood. However there are also limitations in using such tools. Challenges include, the difficulties in prioritising the most relevant factors (from the range that are identified) as well as forecasting major events such as war, terrorism, economic upheavals, changes in political influences and social values and lifestyle (Buchanan, 2010). It is therefore essential for organisations to be aware of external influences that could affect their success but also to be wary that of the limitations to...
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