Business Policy Homework Part TWO

Part 1-B(2): ASSESS CURRENT ORG. CAPABILITIES

1. DATA COLLECTION

Theory informs us that “org. capabilities” result from a purposeful combination of a firm’s resources and organizing processes, and that they are influenced by the desires and preferences of managers. Therefore, in order to identify the current capabilities of a firm, you must first understand the current resources, organizing processes and management preferences of the firm before you can identify the current org. capabilities.

a. FIRM RESOURCES

From the case material and, when possible, outside sources, identify as much as you can about the resources of the firm. Consider both tangible and intangible resources in a variety of areas. The list in Table 6.1 in your book provides a good overview of resource areas where information could be gathered, but you should tailor the collection of information to the nature of the company you are examining. Note that at this point you are mostly collecting a “laundry list” of what the firm has, and thus should be as detailed as possible. Determination of the particular value/importance of any given resource will come in later steps.

b. MANAGEMENT PREFERENCES

Working from the case material, identify as much as you can about the preferences of key managers. Note that, depending on the case material, this may come as statements from specific managers, as statements about the views of a department, or in a variety of other forms. You are likely to have to “read between the lines” in many instances to get a feel for the preferences of the company as a whole and for those of key managers and/or departments. Note that, as in previous steps, your goal at this point is data collection. That is, you are trying to collect as many indicators of management preferences as you can. Sorting through and determining the importance of any particular view will come in later steps.

c. ORGANIZING PROCESSES

The “Organizing Processes” piece of your analysis is focused on examining and interpreting indicators of how the firm organizes its assets in ways that create specific capabilities for the firm and, ultimately, value for its customers. The “organizing” that occurs, in turn, results from three organizational components: a) organization structure, b) management processes, and c) leadership behavior (see Chapter 8).

To appreciate the organizing processes of a firm, you need to start by gathering information about each of the 3 components and how they allow the firm to organize its assets. Working from the case material, identify as much as you can about how this is accomplished. Note that, depending on the case material, information on organization structure, management processes, and leadership behavior may come from multiple sources, e.g., a picture of an organization chart, statements about “how things are done” within the firm, or in a variety of other forms. You are likely to have to “read between the lines” in many instances to get a feel for each of the components of organizational processes.

As in previous steps, your goal at this point is data collection. That is, you are trying to collect as many indicators as you can about the characteristics and the effectiveness of the processes used by the firm to organize its assets. Sorting through and determining the importance of particular aspects will come in later steps.

2. ORGANIZATION AND ANALYSIS – Identifying Org. Capabilities

On their own, resources, management preferences and organization are simply pieces of the puzzle. Put them together correctly, however, and a firm can generate powerful Org. Capabilities. Now that you have information on the company’s resources, management preferences, and organization you need to evaluate them within this context and consider how they combine to create the Org. Capabilities that are available for the firm.

a. Current Org. Capabilities. Use the information collected in the prior section to identify 3 –4 of the most significant org. capabilities that the firm currently possesses and identify the relative role played by resources, management preferences and organizing processes in generating each of the capabilities. Err on the side of listing more rather than less capabilities – the list can be evaluated and narrowed in the next step. If you believe that a capability could be stronger with the addition of (or a change in) resources, management preferences or organization, note this for future consideration.

How you organize this information is up to you, but you need to be sure that for each identified org. capability you address the following items.

Available Org. Capability

a. Role played in the Capability by

i. Resources

ii. Management Preferences

iii. Organizing processes

b. Additions or changes that might make this Capability stronger (resources, management preferences, or organizing capabilities)

b. Potential Org. Capabilities. Consider the resources, management preferences and organization of the firm. Are there any additional org. capabilities that could be developed by building on what the firm already? That is, are there potential org. capabilities available to the firm that could be developed without too much additional investment?

Again, how you organize this information is up to you, but you need to be sure that for each potential org. capability you address a similar set of items as you did above.

Potential Org. Capability

a. Role played in the Capability by

i. Resources

ii. Management Preferences

iii. Organizing capabilities

b. Additional investments in resources, management preferences, or organizing capabilities that would be needed to fully develop this org. capability

3. CONCLUSIONS AND RECOMMENDATIONS

Given your analysis above, you are now in a position to arrive at conclusions regarding the org. capabilities that the firm possesses. You need to determine which, if any of these have the potential to support strategic actions for the firm as it seeks to build a sustainable competitive advantage. Said differently, you need to evaluate each of the current and potential org. capabilities in light of the VRIO criteria (see Chapter 6 as well as supplements on blackboard).

Based on this evaluation, identify the 2 or 3 most important org. capabilities that the firm currently has (from 3.2 A above) and/or could easily develop (from 3.2 B above). Justify why these are most important and clearly identify how they match up with the VRIO criteria. Are any of them capable of generating a sustainable competitive advantage?

a. ___________________________________________________________________________

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b. ___________________________________________________________________________

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c. ___________________________________________________________________________

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