Module 4: Internal Environment Analysis

Strengths and Weaknesses

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Alexander Iluis and Elmer Aquino

Reporters/Discussants

DM 214 Strategic Planning

PROF. Josefina B. Bitonio, DPA

Overview: An Environment Analysis is

commonly used in organization in general as a method of identifying opposition for a new venture or strategy. This allows professionals to identify all of the positive and negative elements that may affect any new proposed actions.

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Definition:

Environmental Analysis is meant to act primarily as an

assessment technique, though its lengthy record of

success among many organizations makes it an invaluable tool in project

management.

Purpose: The Environment Analysis enables

cooperatives/business to identify the positive and negative influencing factors inside of a company or organization. Besides businesses, cooperatives, other organizations, in areas such as community health and development and education have found much use in its guiding principles. The key role of Environmental Analysis is to help develop a full awareness of all factors that may affect strategic planning and decision making, a goal that can be applied to most any aspect of industry.

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Environmental Analysis is meant to be

used during the proposal stage of strategic planning.

It acts as a precursor any sort of company action,

which makes it appropriate for the following moments:

When to use Environmental Analysis :

Exploring avenues for new initiatives

Making decisions about execution strategies for a new policy

Identifying possible areas for change in a program

Refining and redirecting efforts mid-plan

Environment

Values

Environmental Analysis Internal

Factors:

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Environmental Analysis Internal factors refer to Strengths and Weaknesses, which mean the resources and experience readily available to you. These two factors focus on how to allow the organization to identify the forces influencing a strategy, action, or initiative. Knowing these positive and negative impacting factors can help organization more effectively communicate what factors of a plan need to be recognized.

Financial resources, such as funding, sources of income and investment opportunities.

Physical resources, such as your company’s location, facilities and equipment.

Human resources, such as employees, volunteers and target audiences.

Current processes, such as employee programs, department hierarchies and software systems

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Examples of areas typically considered include:

When it comes to listing strengths and weaknesses, individuals shouldn’t try to over inherent weaknesses or strengths. Identifying factors both good and bad is important in creating a thorough Internal Environment Analysis

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The Internal Environment Analysis is a simple, although comprehensive strategy in identifying not only the weaknesses of a plan, but also the strengths available through it. While an excellent brainstorming tool, the two-cornered analysis prompts entities to examine and execute strategies in a more balanced way.

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In this assessment it focuses on identifying and evaluating the Strengths and Weaknesses of PANELCO III in each functional areas of operations. These include the Financial, Institutional and Technical systems.

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Assessment of the Internal Environment Factors of

PANELCO III

A.) Management Audit

1.) Planning

2.) Organizing

3.) Motivating

4.) Staffing

5.) Controlling

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Planning – work planning has been part of

PANELCO III’s existence. From the vision and mission of the Cooperative, objectives from all levels of the organization are formulated which serve as guide for Division Supervisors and Department Managers to effectively prepare their work plans.

Organizing is the function of

management which follows planning. It is a function in which the synchronization and

combination of human, physical and financial resources takes place. All the three

resources are important to get results. Therefore, organizational function helps in

achievement of results which in fact is important for the functioning of a concern.

According to Chester Barnard, “Organizing is a function by which the concern is able to define the role positions, the jobs related and the co- ordination between authority

and responsibility. Hence, a manager always has to organize in order to get results.

Source: http://managementstudyguide.com/organizing_function.htm

Source: http://www.megaessays.com/viewpaper/7485.html

What is Motivation Why is it important in management? Motivation is what we call our driving force, our ‘get up and go’. It stimulates our senses into the achievement of goals that have been set out for us. Its ability to shape the workforce into its own driving force is what becomes important to the success of work organizations. The meaning of motivation is tending to initiate motion; power; that which induces a person to act eg: desire, fear, and circumstance. (Oxford Dictionary, 1987)

Are the CREATOR of your own destiny

Staffing – Policies are implemented for an

effective human resource management such as Hiring and Recruitment procedures, Guidelines on Promotion and Transfer, Wage and Salary Administration, Manpower Placement Procedures as well as the Code of Employees Discipline. Scholarship grants are open to all qualified employee for career advancement. Employees are sent to trainings and workshops for their continuing development.

Controlling - Evaluation tools

used are Performance Evaluation Sheets and Monthly Accomplishment Report.

1.) Financial - The Finance Department: is responsible for the overall effective discharge of accounting, cashiering and assists the management in the formulation and implementation of sound relevant and effective financial programs, plans, policies, decisions and actions thorough the exercise of good advisory judgment and submission of timely comprehensive verbal and written reports.

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B.) Functional Departmental Areas of

PANELCO III

2.) Institutional - The Institutional Department is similar to the Marketing Department of an organization. It is responsible in planning, development and implementation of promotional or image-building programs, training & information strategies, power use and load development programs and general membership affairs as well as the orderly conduct of Board of Directors elections.

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3.) Technical - System loss reductions remains to be the major program given focus by the management. The curb perennial problem on high system loss ( technical and non-technical) the Engineering Services Department has embarked on the improvement of System Power Factor thereby reducing and reactive energy in the system and will augment the distribution reliability which will reduce system’s loss. The replacement and relocation of KWH meter’s will positively reduce the incidence of power pilferages with in the area, similarly, the implementation of the pole block metering will help our anti-pilferages drive.

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C.) Organizational Core Values Every company has a unique values, beliefs and best

practices (Thompson and Strickland 2003). We at PANELCO III upholds the following core values:

1.) Honesty ; 2.) Unity; 3.) Dedication and Commitment and

4.) Thrift

- In summarizing and evaluating the major strengths and weaknesses in the functional departments of PANELCO III, the Internal Factors Evaluation (IFE) Matrix is used. Intuitive judgements in developing an IFE matrix. An IFE Matrix can be developed in five steps. 1.) List the key internal factors as identified in the internal audit process. List strengths first and then weaknesses.

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D.) Internal Factors Evaluation to PANELCO III

2.) Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) to each factor. The weight assigned to a given factors indicate the relative importance of the factor to being successful in the firm’s

3.) Assign a 1 to 4 to each factor to indicate

whether that factor represents a major weakness (rating = 1), minor weakness ( rating = 2), minor strength (rating = 3), major strength (rating = 4). Strengths and Weakness must receive a 1 or 2 rating . Rating are company based while industry –based.

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4.) Multiply each factors weight by its rating to determine its weighted score for each variable.

5.) Sum the weighted scores for each variable to determine the total weighted score for the organizational (David, 2005 p147).

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WEIGTH RATING WEIGHTED SCORE

0.10 3.00

0.12 4.00

0.15 4.00

0.10 3.00

0.13 4.00

0.05 1.00

0.10 1.00

0.05 2.00

0.10 1.00

0.10 2.00

1.00

0.20

2.75

collection period (30)

WEAKNESSES

0.05

0.10

0.10

0.10

0.30

0.48

0.60

0.30

0.52

Total

1. Limited internally - generated funds

2. High operating cost

3. Collection days (48) is above the prescribed

4. System loss above the prescribed 13% SL Cap

5. Weak corporate identity and culture

STRENGTHS

1. Advancement on information system

2. Regular work planning and controlling

3. Sole distributor of electric service in eastern pangasinan

4. Prompt payments to supliers

5. Experienced and capable workforce

Survey Among the Students of DM 213 Strategic Planning

Class

Strengths Actual Survey Variant Rating Actual Survey Sole Distributor in Eastern Pangasinan 0.14 0.19 0.05 4 0.06 0.76

Experienmce and capable workforce 0.09 0.15 0.06 4 0.03 0.06

Advancement In Information System 0.14 0.13 0.01 3 0.03 0.39

Prompt payment to suppliers 0.14 0.13 0.01 3 0.1 0.09

Weakness 0.51 0.6 0.22 1.3

High operating costs 0.08 0.08 0 1 0.1 0.08

Collection days non conformance 0.03 0.08 0.05 1 0.1 0.08

System loss non conformance 0.08 0.08 0 1 0.1 0.08

Limited internally generated funds 0.03 0.07 0.04 1 0.05 0.07

Not regular planning and controlling 0.1 0.05 0.06 2 0.48 0.1

Weak corporate identity and culture 0.08 0.04 0.04 2 0.02 0.08

0.4 0.4 0.085 0.49

TOTAL 0.305 1.79

1 majorj weakness

2 minor weakness

3 minor strength

4 major strnegth

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on your your

Reporters: Alexander A. Iluis/Elmer Aquino

References:

• http://mystrategicplan.com/resources/internal-and-external-analysis/

• http://www.businessnewsdaily.com/4245-swot-analysis.html

• Strategic Planning of PANELCO III FY2010-2011

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