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Strategy Skills > Building an Evidence Base

Analysing data - Organisational analysis

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Organisational analysis aims to generate an understanding of the organisational structure and culture of the system the project is looking at. This can help in understanding the ease or difficulty with which new strategies can be adopted.

Resource Analysis

A resource audit should be carried out to identify the quantity and quality of resources available to the organisations that will be involved with the implementation of the new strategy. The key areas to assess include:

• Availability of and sources of finance
• Skills: organisational, leadership, technical expertise
• Availability of physical resources e.g. buildings offices etc
• IT capacity
• HR capacity.

There are also some intangible organisational assets which should be assessed such as:

• goodwill
• branding
• contacts
• image etc.

The audit should be comprehensive, but should concentrate on identifying resources that are critical to the organisation's capabilities.

It can also be helpful to conduct historical analysis, looking at the deployment of resources of the organisation by comparison with previous years. This can help identify any significant changes and reveal trends which might not otherwise be apparent. Benchmarking to other similar organisations both in the UK and other countries can also help put the organisation into perspective.

Finally, it may be beneficial to undertake analysis as to the extent to which the organisation's resources are balanced as a whole. The three key aspects of resource balance analysis are:

• the extent to which various activities and resources of the organisation complement each other
• the degree of balance of the people within the organisation in terms of individual skills and personality types
• whether the degree of flexibility in the organisation's resources is appropriate for the level of uncertainty in the environment and the degree of risk the organisation is likely to take.

Cultural Mapping

The aim of cultural mapping is to understand how an organisation's culture will affect its ability to change and adapt to new policies or environments.

Faced with similar environments organisations respond differently. The collective behaviour of managers and employees is determined by frames of reference (the paradigm) which are created by the culture of the organisation (deeper level of basic assumptions and beliefs). The purpose of a cultural audit is to:

• understand that culture;
• understand how the culture contributes to the problem; and
• work out how it needs to change in order for the organisation to deliver the strategy effectively.

The cultural audit analyses different aspects of the organisation's cultural web:

See this culture web template (pdf)

A cultural audit can be conducted through:

• Listening to people talk about their organisation
• Observing the organisation day to day operation
• Asking managers to undertake the audit themselves using a checklist

In addition, to identify the dominant culture of the organisation as a whole it is helpful to analyse the way its strategies have developed historically.

Checklist

Stories

• What core beliefs do stories reflect?
• How pervasive are these beliefs?
• Do stories relate to strengths or weaknesses, success or failures, conformity or mavericks
• Who are the heroes and villains?
• What norms do the mavericks deviate from?

Routines and rituals

• Which routines are emphasised?
• Which would look odd if changed?
• What behaviour do routines encourage?
• What are the key rituals?
• What core beliefs do they reflect?
• What do training programmes emphasise?
• How easy are rituals/routines to change?

Symbols

• What language and jargon is used?
• How internal or accessible is it?
• What aspects of strategy are highlighted in publicity?
• What status symbols are there?
• Are there particular symbols which denote the organisation?

Organisational structure

• How mechanistic/organic are the structures?
• How flat/hierarchical are the structures?
• How formal/informal are the structures?
• Do structures encourage collaboration or competition?
• What type of power structures do they support?

Control Systems

• What is most closely monitored/controlled?
• Is emphasis on reward or punishment?
• Are controls related to history or current strategies?
• Are there many/few controls?

Power Structures

• What are the core beliefs of the leadership?
• How strongly held are these beliefs?
• How is power distributed in the organisation ?
• Where are the main blockages to change?

Overall

• What is the dominant culture?
• How easy is this to change?
• Are there any linking threads through the separate elements of the web?

(Source: Exploring Corporate Strategy - Gerry Johnson, Kevan Scholes)

Strengths

• Organisational analysis allows you to understand the ease or difficulty with which new strategies can be adopted.
• Will help identify whether the organisation has the resources/competencies to deliver the new strategic direction, once identified.
• Will identify key areas of relevant expertise/knowledge within the organisation. Policies can then be developed to capitalise on this expertise.
• Feeds into change management and implementation planning
• Comprehensive assessment of organisational culture.

Weaknesses

• Time consuming and often neglected during the knowledge gathering phase.
• Assessment may not be objective if conducted by the managers of the organisation

References

Related Sections: comparison with other organisations - see Benchmarking

Exploring Corporate Strategy, Gerry Johnson & Kevan Scholes, Prentice Hall, 1993.

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