Organisataion Culture
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When a organisation is trying to position themselves in their industries there are a number of analytical tools to help them analysis the external enivonrment identifying factors which can influence their growth. An organistion can use a pestel analysis to get a grasp on the environement and the factors which can affect them. It is important for an organsastion to identify the drving factors present in this environment to and how they influence the market themselves. However most affecting influences to an organstiaon will come in the immediate envinroment. Porters five forces analysis can be used her to determine what the most affecting competitive forces are in the orgnastions particular industry. The strengths of these forces will depend on the stage of the industry life cycle the industry is in.
The first starting point for an organistion should be with the wider environment it organsaiton lies in . This is why a organstion will use a pestel analysis to determing these factors and any future impact they may have. PESTEL stands fro Political, Economic, Social, Technological and Legal. A pestel analysis refers to the macro envonrmenr factors and helps inform an organtisation of market trends and controlling factors in the industry which may pose credible advantages or threats. The political refers to the role of government in the ogransiations industry. Governement can have a huge influence on a industry such is an example in the airline industry where they may control emigration or they may control acquisitions and mergers to prevent excessive market power. From a strategic perspective it is vital that an organisation acknowledge the role of the government in their industry as ultimately for sustainable growth and even entry they will need the backing of the government. The Economic dimension refers to the external factors present in the industry such as the exchange rate it is here the macro economic factors will clearly be present it will show business cycles and different economices growth levels from around the world. This can be crucial to organstions formuatling strategies depending on which industry they are enetering .If it is an already developed indistury than business life cycles and previous trends in the marke place can give a huge indication to the possibilities of strengths and weakenesses. The next element is the social. It also refers to the change in cultures and demographics and how they may affect an organstion such as the againes western population. The next element is Technological, this refers to the technology advancements in the industry. Acknowleding these factors are crucial as they can provide unique core competencices which organsitons can build there strategy on. They also can be barriers of entry if new technology is needed to compete in the market place and requires heavy investment. Not acknolwoding the extent of technolical influence can mean a organstion can be left behind. The envonrimanetel aspect refers the “green” issue in the industry such as pollution and waste management. Of course this is crucial to a organstion as there are standards which must be met not only from socities point of view but from a legal stance too. This is why CSR has become such a domination factor in industries worldwide today. Organisations need to implore this through out there strategy as their strategy is determined on long term growth and sustainability ignoring the social aspects at your peril as eventually it will catch up with you and can damage an organisation to the extent of no return. The final aspect to a pestel analysis is the Legal factors in the envionrment. This refers to the law of the industry that must be adhered to and any requirement an organisation must follow to be allowed compete within the industry. A pestel analysis allows an organstion to get a broad sense of the industry environment and its influecnign factors however it is important at this point to identify the key drivers in an environment. These drivers are
Long term growth of the industry
Changes in who buys the product and its uses
Product innovation
Technolical advancements and the diffusion of know how
Market innovation
The entry/exit of firms
Changes in lifestyles