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Environment AnalysisEnvironment Analysis-- A tool for evaluating the environment of a public A tool for evaluating the environment of a public
organization within the social management frameworkorganization within the social management framework--
Purpose of the ToolPurpose of the Tool
Evaluation of the Nature of the Environment Evaluation of the Nature of the Environment
The Six Areas of Influence on the Environment The Six Areas of Influence on the Environment
The Social Management Value NetThe Social Management Value Net
Purpose of the ToolPurpose of the Tool
Only with the input of an adequate scanning Only with the input of an adequate scanning of the environment it is possible to be of the environment it is possible to be prepared to successfully achieve the goals prepared to successfully achieve the goals established by the public organizations’ established by the public organizations’ mandate and mission.mandate and mission.
The term “environment” implies many themes The term “environment” implies many themes and actors; the challenge is making sense of and actors; the challenge is making sense of these diversities in order to contribute to the these diversities in order to contribute to the strategic decision making process. strategic decision making process.
The environment analysis asserts that all The environment analysis asserts that all organizations, projects and reforms are organizations, projects and reforms are influenced by the profound impact of influenced by the profound impact of political, economic, sociocultural and political, economic, sociocultural and institutional contexts. institutional contexts.
Purpose of the ToolPurpose of the Tool
Provide an understanding of the current and Provide an understanding of the current and potential changes outside an organization. potential changes outside an organization.
Provide strategic inputs for decision making and Provide strategic inputs for decision making and strategic management.strategic management.
Reduce the uncertainty while formulating Reduce the uncertainty while formulating adjustment mechanisms by continuosly scanning adjustment mechanisms by continuosly scanning the environment.the environment.
Evaluate the strategic position of the organization Evaluate the strategic position of the organization by understanding the Social Management Value by understanding the Social Management Value Net. Net.
Evaluation of the Nature of the Evaluation of the Nature of the EnvironmentEnvironment
The Organization and its BoundariesThe Organization and its Boundaries
The boundary of an organization establishes:
The demarcation of the interface between The demarcation of the interface between an organization and its environment. an organization and its environment.
The protection mechanism from external The protection mechanism from external tensions. tensions.
The regulation of information, input and The regulation of information, input and labor shared between an organization and labor shared between an organization and its environment. its environment.
The Organization and its BoundariesThe Organization and its Boundaries
The permeability of an organization defines The permeability of an organization defines its influence on and openess to the its influence on and openess to the environment. environment.
The attempt to acheive many goals at the The attempt to acheive many goals at the same time enhances the uncertainty level same time enhances the uncertainty level and information requirements.and information requirements.
Risk Vs. UncertaintyRisk Vs. Uncertainty
Risk: Quantitative analysis. Tends to be Risk: Quantitative analysis. Tends to be more objective. more objective.
Uncertainty: Subjective analysis. Scarce Uncertainty: Subjective analysis. Scarce statistical information. Scarce quantitative statistical information. Scarce quantitative measures and more qualitative analysis. measures and more qualitative analysis.
Public policy formation in Latin America is developed under fairPublic policy formation in Latin America is developed under fairly ly uncertain environments! uncertain environments!
The Environment and the Decision Making ProcesssThe Environment and the Decision Making Processs
The decision making process deals with several dimensions The decision making process deals with several dimensions regarding the environment:regarding the environment:
Heterogeniety Heterogeniety –– HomogenietyHomogeniety
High variability High variability –– Low variability Low variability
Uncertainty Uncertainty –– Certainty Certainty
Complex Complex –– SimpleSimple
Methodological Approaches to Envirornment EvaluationMethodological Approaches to Envirornment Evaluation
Conditions of the EnvironmentConditions of the Environment
Con
ditio
ns o
f the
Env
ironm
ent
Con
ditio
ns o
f the
Env
ironm
ent
Simple Complex
Static Historical analysis and pronostics
Descentralization
Dinamic Scenario planning Experience and learning
The Six Areas of Influece on The Six Areas of Influece on the Environmentthe Environment
The Six Areas of Influence on the EnvironmentThe Six Areas of Influence on the Environment
PoliticalPolitical
EconomicEconomic
SocialSocialInstitutional Institutional
SymbolicSymbolic
OrganizationOrganization
Global Global TendenciesTendencies
11
22
33
4455
66
Global TendenciesGlobal Tendencies
Area of Influence: Global TendenciesArea of Influence: Global Tendencies
Review of the different tendencies within a public policies framework. Positions outside the organization that influence its performance and decision making.
(Ex.: Washington Consensus, second generation reforms, institutional reforms)
Political EnvironmentPolitical Environment
Area of Influence: Political EnvironmentArea of Influence: Political Environment
General Political Environment: Political and General Political Environment: Political and governmental situation.governmental situation.
Political Cycle: Strategic positioning within a Political Cycle: Strategic positioning within a legislative period. legislative period.
Strategic Positionig within the Political CycleStrategic Positionig within the Political Cycle
Strategicpositioning
zone Fortification Zone
High High
Medium Medium
Low Low
Activity Intensity Reelection Probability
Activity level
Impact
Beginning of term 1/4 1/2 3/2 4/4
End of term
Economic EnvironmentEconomic Environment
Area of Influece: Economic EnvironmentArea of Influece: Economic Environment
Permanent or structural changes: Implies a Permanent or structural changes: Implies a review and even a redesign of a policy, review and even a redesign of a policy, program or project. program or project.
Transitory or cyclical changes: Implies an Transitory or cyclical changes: Implies an adjustment of the policy, program or adjustment of the policy, program or project due to an exceptional temporal or project due to an exceptional temporal or cyclical change. cyclical change.
Area of Influece: Economic EnvironmentArea of Influece: Economic Environment
VariablesStructural Change
(Permanent)
Temporal Change (Transitory)
Impact on the Policy, Program or Project
Social EnvironmentSocial Environment
Area of Influence: Social EnvironmentArea of Influence: Social Environment
Cultural aproach to the most relevant groups:Cultural aproach to the most relevant groups:
Demographic Issues Human Development Index Approach
Population size Education level
Age distribution Type of job
Demographic distribution Income
Ethnic composition Access to basic services
Institutional AnalysisInstitutional Analysis
Area of Influence: Institutional Environment Area of Influence: Institutional Environment
Review of formal and informal rules that constrain the organizatReview of formal and informal rules that constrain the organization:ion:
Formal Rules Informal Rules
Constitution political lobbies
Political legislation authorities
Administrative Manuals conventions
Statutes habits
Analysis of the Symbolic Analysis of the Symbolic EnvironmentEnvironment
Area of Influence: Symbolic EnvironmentArea of Influence: Symbolic Environment
Political Political ValuesValues
Social Social ValuesValues
Technological Technological ValuesValues
Economic Economic ValuesValues
Values: Shared assumptions regarding what’s good and bad. It detValues: Shared assumptions regarding what’s good and bad. It determines ermines the dominant position that reflects a preference towards certainthe dominant position that reflects a preference towards certainalternatives. alternatives.
Review of the Six Areas of Review of the Six Areas of InfluenceInfluence
Review of the Six Areas of InfluenceReview of the Six Areas of Influence
Variables Tendencies Impact on the policy, project or program Opportunities Threats
Global TendenciesPoliticalEconomicSocialInstitutionalSymbolic
It is important to carefully select variables of the environmentIt is important to carefully select variables of the environment that have an important that have an important impact on the organization and its performance. Avoid the commonimpact on the organization and its performance. Avoid the common practice of practice of
exhaustive lists of unrelated variables. exhaustive lists of unrelated variables.
Evaluating the Strategic Position of the Evaluating the Strategic Position of the Organization: Organization:
“The Social Management Value Net”“The Social Management Value Net”
The Strategic Position of the OrganizationThe Strategic Position of the Organization
In the public sector, the concept of competence is In the public sector, the concept of competence is related to the competition for resources, especially related to the competition for resources, especially within the political arena. within the political arena.
The need to show what is being offered has more The need to show what is being offered has more relevance. Therefore, itrelevance. Therefore, it’’s important to identify the s important to identify the components of the Social Management Value Net. . components of the Social Management Value Net. .
The Strategic Position of the OrganizationThe Strategic Position of the Organization
The Social Management Value NetThe Social Management Value Net
Legitimacy and SupportCitizens
............
Clients
..............
Beneficiaries
................
Obligates
..................
Founding
..............
..............
..............
..............
..............
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Suppliers
.........................................
.........................................
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ComplementorsPoliciesPrograms andProjects
..............
..............
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Synergies
..............
..............
..............
Institutions
..............
..............
..............
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Competitors
ResourcesIntruders
..............
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SubstitutesOf the Private Sector
..............
..............
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OrganizationPolicies, projects and programsformulated under the Social Management Framework
...............................................
...............................................
The Strategic Position of the OrganizationThe Strategic Position of the Organization
The Social Management Value NetThe Social Management Value Net
Source of legitimacy and support: citizens, Source of legitimacy and support: citizens, beneficiaries, users, obligates and financing sources.beneficiaries, users, obligates and financing sources.
Complementors: Public agencies, units, private and Complementors: Public agencies, units, private and diversified level. diversified level.
Competitors: Resources intruders, private sector Competitors: Resources intruders, private sector substitutes.substitutes.
Suppliers: Labor, public, private and diversified Suppliers: Labor, public, private and diversified organizations.organizations.
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