Environmental Analysis

1
Environmental Analysis

• Justin F. Keogan
• keoganj_at_tcd.ie

2
Contents

• Public and private strategy making
• PEST
• External and Internal Analysis
• SWOT
• SLPO
• Resource Audit
• Maslin Multi-Dimensional Matrix
• Stakeholder Mapping

3
Why is strategy relevant?

• Private
• Pace of change
• Size of investments
• Pressure for profits
• Competition - survival
• Product / market scope

• Public
• Pace of change relevance of the environment
• Scarce resources
• Value for money
• Scope of activity
• Accountability
• New Public Management

4
Public Sector and the Environment

• Unlike private companies, public organisations
  are in the politico-administrative sphere and
  therefore more likely to have an impact on the
  general state of affairs including the economy
• But to what extent is it possible to alter the
  sensitivities of an organisation to its
  environment through strategic decisions?

5
Public Vs Private
6
Public Vs Private
Wilcox and Harrow (1992)
7
(No Transcript)
8
Economic GDP trends Interest rates Money
supply Inflation rates Unemployment
levels Wage/price controls Devaluation/revaluation
Energy availability and cost Disposable and
discretionary income
Technological Total government spending for
RD Total industry spending for RD Focus of
technological efforts Patent protection New
products New developments in technology transfer
from lab to marketplace Productivity improvements
through automation
Political-Legal Antitrust regulations Environmenta
l protection laws Tax laws Special
incentives Foreign trade regulations Attitudes
toward foreign companies Laws on hiring and
promotion Stability of government
Sociocultural Lifestyle changes Career
expectations Consumer activism Rate of family
formation Growth rate of population Age
distribution of population Regional shifts in
population Life expectancies Birth rates
9
(No Transcript)
10
(No Transcript)
11
SWOT
12
Street Level Public Organisation
13
SWOT
SWOT
SWOT
SWOT
SWOT
14
Resource Audit

• Physical resources machines equipment,
  facilities ,etc,
• Human resources skills base, and adaptability to
  change,
• Financial resources ability to obtain capital,
  debtor and creditor control, shareholders
  interest etc.
• Intangibles goodwill, reputation, organisation
  culture, etc.

15
Resource Audit

• Competencies
• In separate activities
• Through linking activities

Some are

• Assessing balance
• Resources
• Competencies
• Business units

• Identifying key issues
• SWOT analysis
• Critical Success Factors

Underlying Strategic capability
16
(No Transcript)
17
Boston Matrix
18
Boston Matrix

• Limitations in applicability to public sector
• Based on simple, purely rational view of markets
  and economic man
• Does not take into account political context and
  priorities

19
Maslin Multidimensional Matrix

• Tool to guide the management of a portfolio of
  services
• Not just limited to marketing issues as the
  Boston matrix is but can be used in general
  strategic planning
• It does not take a prescriptive stance in
  relation to decision making but in descriptive
• It helps but doesnt replace decision making
• It deals with the issue of political (defined
  need) versus environmental priority (user defined
  dimension)

20
Maslin Multidimensional Matrix
21
Maslin Multidimensional Matrix

• Want and needs are defined by some group
  (political, legal or societal) according to some
  particular set of priorities
• User dimensions are defined by the user of the
  model through their interpretation of their
  environment
• Wants and needs poor relief
• Environment determines that scare resources and
  other constraints will result in the public body
  not being able to prioritise poverty relief
  actions

22
Maslin Multidimensional Matrix

• Many possible user dimensions (you pick the more
  important ones)
• Examples
• Level of concern by elected members
• Level of concern of the community
• Level of concern by other agencies
• Level of finance available
• Level of non-financial resources available
• Level of statutory duty
• Level of current activity

23
Maslin Multidimensional Matrix

• Different levels will be of interest to different
  stakeholders conflict
• Equilibrium common interest
• Disequilibrium - conflict

24
Maslin Multidimensional Matrix

• Example
• X-axis needs or wants of a client group laid
  down by some authority
• Y-axis level of elected member concern and
  existing level of provision

25
Maslin Multidimensional Matrix
H Level of provision L
Lobby and rematch
Continue but monitor
Review and evaluate
Withdraw
L Client group needs or wants (general
population) H Rural Public Telephones
26
Maslin Multidimensional Matrix
H Level of elected member concern L
Lobby and rematch
Continue but monitor
Review and evaluate
Withdraw
L Client group needs or wants (general
population) H Rural Public Telephones
27
Withdraw

• Politically unproblematic, activities, resources
  and requirements are well matched
• Level of need and provision has decreased
  significantly with ubiquity of personal
  telecommunications
• Rural public telephones are not a priority
• Whats left could probably be abandoned

28
Maslin Multidimensional Matrix
H Level of provision (A) Level of elected
member concern (B) L
Lobby and rematch
Continue but monitor
B
A
Review and evaluate
Withdraw
L Client group needs or wants (old rural
dwellers) H Rural Public Telephones
29

• Action to be taken
• Increase provision or
• Redefine the level of need as it applies to your
  organisation

30
Maslin Multidimensional Matrix
H Level of Provision (A) Level of elected
member concern (B) L
Lobby and rematch
Continue but monitor
A B
Review and evaluate
Withdraw
L Client group needs or wants H Child
Protection Services
31
Continuebut monitor

• Needs of group are clear cut and not perceived as
  ambiguous
• Level of provision and share of resources
  expended are relatively high
• Political concern high, though not necessarily
  actively preoccupied with the issue

32
Maslin Multidimensional Matrix
H Level of Provision (A) Level of elected
member concern (B) L
Lobby and rematch
Continue but monitor
Ba
A
Bb
Review and evaluate
Withdraw
L Client group needs or wants H Municipal Golf
Courses
33
Lobby and rematch

• Or why are we still doing this?
• Need is low relatively speaking
• Provision is surprisingly high
• Elected member concern may be in favour of
• Retaining provision Ba disequilibrium
• Abandoning provision Bb equilibrium

34
Maslin Multidimensional Matrix
H Level of Provision (A) Level of elected
member concern (B) L
Lobby and rematch
Continue but monitor
A B
Review and evaluate
Withdraw
L Client group needs or wants H Recycling
Facilities
35
Review andEvaluate

• Why arent we doing this?
• Need is high
• Provision is low
• Elected members may favour other priorities or
  wait for another level of government to deal with
  the issue
• Disequilibrium it should be a matter of concern
  for the organisation and the subject of future
  planning

36
Stakeholders

• Individuals or groups who depend on the
  organisation to fulfil their goals and whom, in
  turn, the organisation depends

37
Stakeholder Expectations

• Strong political dimension to formulating and
  implementing strategy
• Especially for public organisations
• Implications for strategic choice and managing
  change

38
Stakeholders - internal
39
Stakeholders - external
40
Stakeholder Mapping
41
Power / Interest Matrix

• Relevant to specific strategies
• Plot those that matter
• Exclude groups that will remain indifferent
• Dont over estimate power of stakeholders

42
Sources of power

• Think internal and external
• Hierarchy politicians
• Influence media
• Control of resources DoF
• Expertise professions
• Control of the environment unions in
  negotiation
• Involvement in strategy implementation

43
Indicators of power

• Again think internal and external
• Status
• Resources
• Representation
• Symbols

44
Acid test

• If I were to pursue this strategy with disregard
  to the views of this particular stakeholder,
  could / would they stop me?
• If yes, reconsider
• If no, fire away

45
Example Reduce staff numbers
46
Classification of strategy by maps
- - -



47
- - - - - -
_
- - - - - -
? ? ? ? ? ?
48
? ? ? ? ? ?
49
After Environmental Analysis

• Whats actionable?
• What should we respond to?
• Identify the factors that are controllable and
  those that are not controllable

50
Issues Priority Matrix