SWOT Analysis - Definition, Advantages and Limitations

SWOT Analysis - Definition, Advantages and Limitations

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. By definition, Strengths (S) and Weaknesses (W) are considered to be internal factors over which you have some measure of control. Also, by definition, Opportunities (O) and Threats (T) are considered to be external factors over which you have essentially no control.

SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position of the business and its environment. Its key purpose is to identify the strategies that will create a firm specific business model that will best align an organization’s resources and capabilities to the requirements of the environment in which the firm operates.

In other words, it is the foundation for evaluating the internal potential and limitations and the probable/likely opportunities and threats from the external environment. It views all positive and negative factors inside and outside the firm that affect the success. 

A consistent study of the environment in which the firm operates helps in forecasting/predicting the changing trends and also helps in including them in the decision-making process of the organization.

An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given below-

 Strengths – 

Strengths are the qualities that enable us to accomplish the organization’s mission. These are the basis on which continued success can be made and continued/sustained.

Strengths can be either tangible or intangible. These are what you are well-versed in or what you have expertise in, the traits and qualities your employees possess (individually and as a team) and the distinct features that give your organization its consistency.

Strengths are the beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty. Examples of organizational strengths are huge financial resources, broad product line, no debt, committed employees, etc.

 Weaknesses – 

Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our full potential. These weaknesses deteriorate influences on the organizational success and growth.

Weaknesses are the factors which do not meet the standards we feel they should meet.

Weaknesses in an organization may be depreciating machinery, insufficient research and development facilities, narrow product range, poor decision-making, etc.

Weaknesses are controllable. They must be minimized and eliminated. For instance - to overcome obsolete machinery, new machinery can be purchased.

Other examples of organizational weaknesses are huge debts, high employee turnover, complex decision making process, narrow product range, large wastage of raw materials, etc.

Opportunities – 

Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable.

Organizations can gain competitive advantage by making use of opportunities. Organization should be careful and recognize the opportunities and grasp them whenever they arise.

Selecting the targets that will best serve the clients while getting desired results is a difficult task. Opportunities may arise from market, competition, industry/government and technology.

Increasing demand for telecommunications accompanied by deregulation is a great opportunity for new firms to enter telecom sector and compete with existing firms for revenue.

Threats – 

Threats arise when conditions in external environment jeopardize the reliability and profitability of the organization’s business.

They compound the vulnerability when they relate to the weaknesses.

Threats are uncontrollable.

When a threat comes, the stability and survival can be at stake.

Examples of threats are - unrest among employees; ever changing technology; increasing competition leading to excess capacity, price wars and reducing industry profits; etc.

Advantages of SWOT Analysis

SWOT Analysis is instrumental in strategy formulation and selection. It is a strong tool, but it involves a great subjective element. It is best when used as a guide, and not as a prescription.

Successful businesses build on their strengths, correct their weakness and protect against internal weaknesses and external threats. They also keep a watch on their overall business environment and recognize and exploit new opportunities faster than its competitors.

SWOT Analysis helps in strategic planning in following manner-

1.     It is a source of information for strategic planning.
2.     Builds organization’s strengths. 
3.     Reverse its weaknesses.
4.   Maximize its response to opportunities. 
5.   Overcome organization’s threats.
6.  It helps in identifying core competencies of the firm.
7.   It helps in setting of objectives for strategic planning.
8.   It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out. 

SWOT Analysis provide information that helps in synchronizing the firm’s resources and capabilities with the competitive environment in which the firm operates.

Limitations of SWOT Analysis

SWOT Analysis is not free from its limitations. It may cause organizations to view circumstances as very simple because of which the organizations might overlook certain key strategic contact which may occur. Moreover, categorizing aspects as strengths, weaknesses, opportunities and threats might be very subjective as there is great degree of uncertainty in market. SWOT Analysis does stress upon the significance of these four aspects, but it does not tell how an organization can identify these aspects for itself.

There are certain limitations of SWOT Analysis which are not in control of management. These include- Price increase;

1.  Inputs/raw materials;
2. Government legislation; 
3. Economic environment;
4. Searching a new market for the product which is not having overseas market due to import restrictions; etc.
5.  Internal limitations may include-
6.   Insufficient research and development facilities;
7.  Faulty products due to poor quality control;
8. Poor industrial relations;
9. Lack of skilled and efficient labour; etc

BIBLIOGRAPHY

John A. Pearce II , Richard B Robinson , JR., Amita Mital “Strategic Management” 10^th Addition Tata Mc Graw Hill Education Pvt.Ltd New Delhi.

CONCEPT OF TRAINING

CONCEPT OF TRAINING

BY 

SMART LEARNING WAY

Human Resource Management is concerned with the planning, acquisition, training & developing human beings for getting the desired objectives & goals set by the organization. 

The employees have to be transformed according to the organizations' & global needs. This is done through an organized activity called Training.

Training is a process of learning a sequence of programmed behavior. 

It is the application of knowledge & gives people an awareness of rules & procedures to guide their behavior. 

Thus, training is a process that tries to improve skills or add to the existing level of knowledge so that the employee is better equipped to do his present job or to mould him to be fit for a higher job involving higher responsibilities. 

It bridges the gap between what the employee has & what the job demands.

Since training involves time, effort & money by an organization, so an organization should to be very careful while designing a training program. 

The objectives & need for training should be clearly identified & the method or type of training should be chosen according to the needs & objectives established.

Once this is done accurately, an organization should take a feedback on the training program from the trainees in the form of a structured questionnaire so as to know whether the amount & time invested on training has turned into an investment or it was a total expenditure for an organization.

Training is a continuous or never ending process. 

 Training plays a significant role in human resource development. Human resources are the lifeblood of any organization. Only through trained & efficient employees, can an organization achieve its objectives.

MEANING OF TRAINING 

Training is the acquisition of knowledge, skills and competencies as a result of the teaching of vocational or practical skills or knowledge that relate to specific useful competencies.  

Training has specific goals of improving one's capability, capacity, productivity and performance. 

          OBJECTIVES OF TRAINING 

1)      To impart to the new entrants the basic knowledge & skills they need for an intelligent performance of definite tasks.  

2)      To prepare employees for more responsible positions. 

3)      To bring about change in attitudes of employees in all directions. 

4)      To reduce supervision time, reduce wastage & produce quality products. 

5)      To reduce defects & minimize accident rate. 

6)      To absorb new skills & technology. 

7)      Helpful for the growth & improvement of employee's skills & knowledge.

ROLE OF TRAINING 

1)      It enables the organization to contribute to the development of a country's human capital, through its influence on education policies and systems and training by public training institutions, to better serve business needs. 

2)      It also enables it to influence employers in regard to the need for them to invest more in training and employee development - which employers should recognize as one key to their competitiveness in the future. 

3)      It provides an important service to members, especially in industrial relations in respect of which sources of training for employers in developing countries are few. 

4)      It is an important source of income provided the organization can deliver relevant quality training. 

5)      It contributes to better human relations at the enterprise level and therefore to better enterprise performance, by matching corporate goals and people management policies. 

6)      It improves the overall image of the organization and invests it with a degree of professionalism, which can lead to increased membership and influence. 

NEED FOR TRAINING 

Good communications and consultation are essential for efficient operation in any organization. 

Training can help employees better understand the information they are given and can encourage them to play a fuller part in the way the organization conducts its affairs.  

Managers have an important role to play in communicating and consulting and good training can enable them to:

    i)   become more aware of the importance of good  communication and consultation practice

    ii)  understand their roles and responsibilities as communicators 

    iii)  support those who are less outspoken and improve their ability to communicate.

  IMPORTANCE OF TRAINING 

 

Optimum Utilization of Human Resources 

 Development of Human Resources 

 Development of skills of employees 

 Productivity  

 Team spirit  

 Organization Culture  

 Organization Climate 

 Morale 

DEVELOPMENT 

Human Resource Development (HRD) is a process of developing skills, competencies, knowledge and attitudes of people in an organization. 

The people become human resource only when they are competent to perform organizational activities.

Therefore, HRD ensures that the organization has such competent human resource to achieve its desired goals and objectives. 

HRD imparts the required knowledge and skill in them through effective arrangement of training and development programs. 

 HRD is an integral part of Human Resource Management  which is more concerned with training and development, career planning and development and the organization development. 

The organization has to understand the dynamics of HR and attempt to cope with changing situation in order to deploy its HR effectively and efficiently. And HRD helps to reach this target.

Hence, HRD is a conscious and proactive approach applied by employers which seeks to capacitate employees through training and development to give their maximum to the organization and to fully use their potential to develop themselves.

ROLE OF DEVELOPMENT 

To compete in an ever-changing world, businesses must frequently realign themselves. Organizational development is a way to improve a company through this change process. When done effectively, organizational development focuses on the best use of the company's employees. 

The human resources department plays a vital role in this development by recruiting highly-skilled people who fit into the culture of the company. The HR department also manages the growth of employees through training and fills employment gaps to help secure a competitive advantage.

          1)  Strategic Planning

         2)  Job Analysis and Design

         3)  Recruitment Skill

IMPORTANCE OF DEVELOPMENT 

1)      Human resource development develops the skills and knowledge of individual, hence, it helps to provide competent and efficient HR as per the job requirement. 

2)      HRD helps to grasp the career development opportunities through development of human skills and knowledge.  

3)       When people in the organization are well oriented and developed, they show higher degree of commitment in actual work place. This inspires them for better performance, which ultimately leads to job satisfaction. 

4)      HRD facilitates planning, and management of change in an organization. It also manages conflicts through improved labor management relation. It develops organizational health, culture and environment which lead to change management. 

5)      Trainings and development programs are tools of HRD. They provide opportunity for employee's development by matching training needs with organizational requirement. Moreover, HRD facilitates integrated growth of employees through training and development activities. 

•  

6)      HRD develops necessary skills and abilities required to perform organizational activities. As a result of which, employees can contribute for better performance in an organization. This leads to greater organizational effectiveness.

BIBLIOGRAPHY

* Aswathappa K. "Human Resource and Personal Management" – Text and Cases, Tata McGraw Hill Publishing Company Ltd., New Delhi.

* Chhabra T.N. "Human Resources Management – Concepts and Issues, Fourth Edition", Shampat Rai & Co., Delhi.

* Gupta, C. B. (2004), "Human Resource Management", Sixth Edition, Sultan Chand & Sons, New Delhi.

*  Kothari, C. R. (2005), "Research Methodology", Second Edition, New Age International Publishers, New Delhi.

STRATEGIC CONTROL AND CONTINUOUS IMPROVEMENT

STRATEGIC CONTROL AND CONTINUOUS IMPROVEMENT

BY

SMART LEARNING WAY

Strategic control is concerned with tracking a strategy as it is being implemented, detecting problems or changes in its underlying premises, and making necessary adjustments. In contrast to postaction control, strategic control is concerned with guiding action in behalf of the strategy as that action is taking place and when the end result is still several years off. Managers responsible for the success of a strategy typically are concerned with two sets of questions:

      1.    Are we moving in the proper direction?

      2.    How are we performing?

ESTABLISHING STRATEGIC CONTROLS

·  Premise Control:

Every strategy is based on certain planning premises—assumptions or predictions. Premise control is designed to check systematically and continuously whether the premises on which the strategy is based are still valid. Key questions for management are:

·  Which premises should be monitored: environmental factors—those over which the firm has no control but those that can influence strategy and industry factors—that influence success in a particular industry.

·  How are premise controls enacted: the strategy’s key premises should be identified and recorded during the planning process and responsibilities for monitoring those premises should be assigned to those with qualified sources of information.

·   Special Alert Control: 

A special alert control is the thorough, and often rapid, reconsideration of the firm’s strategy because of a sudden, unexpected event.

·         Strategic Surveillance: 

 Strategic surveillance is designed to monitor a broad range of events inside and outside the firm that are likely to affect the course of its strategy. The basic idea behind strategic surveillance is that important yet unanticipated information may be uncovered by a general monitoring of multiple information sources.

·         Implementation Control: 

 Implementation control is designed to assess whether the overall strategy should be changed in light of results. Two types of implementation controls are:

·         Monitoring strategic thrusts: 

projects that need to be done if the strategy is to be accomplished and information on the strategy’s progress.

·         Milestone reviews: critical events and resource allocations through time, and full-scale assessment to scrutinize the strategy.

 Implementation control is also enabled through operational control systems like budgets, schedules and key success factors. To be effective, operational control systems must take four steps common to all potation controls:

·         Set standards of performance

·         Measure actual performance

·         Identify deviations from standards set

·         Initiate corrective action

The Quality Imperative: Continuous Improvement

TQM stands for total quality management, an umbrella term for the quality programs that have been implemented in many businesses worldwide in the last two decades.

 TQM was first implemented in several large U.S. manufacturers in the face of the overwhelming success of Japanese and German competitors. 

TQM is viewed as virtually a new organizational culture and way of thinking. 

It is built around an intense focus on customer satisfaction; on accurate measurement of every critical variable in a business’s operation; on continuous improvement of products, services, and processes; and on work relationships based on trust and teamwork. 

One useful explanation of the quality imperative suggests 10 essential elements of implementing TQM as follows:

      1.    Define quality and customer value.

      2.    Develop a customer orientation.

      3.    Focus on the company’s business processes.

      4.    Develop customer and supplier partnerships.

      5.    Take a preventive approach.

      6.    Adopt an error-free attitude.

      7.    Get the facts first.

      8.    Encourage every manager and employee to participate.

      9.    Create an atmosphere of total involvement.

     10.    Strive for continuous improvement.

Six-Sigma Approach to Continuous Improvement

Sometimes referred to as the “new TQM,” Six-Sigma is a highly rigorous and analytical approach to quality and continuous improvement with an objective to improve profits through defect reduction, yield improvement, improved customer satisfaction and best-in-class performance.

Critics of TQM see key success factors differentiating Six-Sigma from TQM:

·         Acute understanding of customers and the product or service provided

·         Emphasis on the science of statistics and measurement

·         Meticulous and structured training development

·         Strict and project-focused methodologies

·         Reinforcement of the doctrine advocated by Juran such as top management support and continuous education

 ISO 9001 and the Era of International Standards

The ISO 9001 quality management system standard, introduced in 1987, is international in both scope and impact.  The ISO 9001 standard focuses on achieving customer satisfaction through continuous measurement, documentation, assessment, and adjustment. 

The standard specifies requirements for a quality management system where an organization:

Needs to demonstrate its ability to consistently provide product and services that meet customer requirements, and

Aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer requirements.

 The Balanced Scorecard Methodology

Recognizing some of the weaknesses and vagueness of previous implementation and control approaches, the balanced scorecard approach was intended to provide a clear prescription as to what companies should measure in order to “balance” the financial perspective in implementation and control of strategic plans.

The balanced scorecard methodology adapts the TQM ideas of customer-defined quality, continuous improvement, employee empowerment, and measurement-based management/feedback into an expanded methodology that includes traditional financial data and results. 

BIBLIOGRAPHY

John A. Pearce II , Richard B Robinson , JR., Amita Mital “Strategic Management” 10^th Addition Tata Mc Graw Hill Education Pvt.Ltd New Delhi.

http://en.wikipedia.org/wiki/Strategic_management