CHAPTER 2 – OVERALL ORGANISATIONAL PERFORMANCE
When considering performance of a business, consider possible impacts from all environments.
The impact will depend on the strategies implemented.
1. IMPORTANCE OF CREATIVE THINKING AND PROBLEM-SOLVING TECHNIQUES TO
IMPROVE PERFORMANCE
Creative thinking = identifying a problem the consumer is not aware of yet and finding a way to
solve it (customer must always be happy)
Aim of finding creative solutions = create and maintain competitive advantage.
Business must constantly adapt to ensure customer needs are satisfied.
Can't solve new problems using old solutions. Need to be creative.
POSSIBLE STEPS DURING PROBLEM-SOLVING PROCESS
Explain the
Identify the impact on Choose the best
resource gap and business and solution(s) and
obtain these consider explain it in
resources different breadth & depth
solutions
2. CREATIVE THINKING/PROBLEM-SOLVING TECHNIQUES
Pros and Cons chart:
Helps weigh advantages/disadvantages of certain option
Decision tree:
Visual representation of different outcomes to a single
event
Helps view different options and consequences of each.
Value chain analysis:
Studies where and how value is added.
Looks at business process to see where value added in cost-effective manner to enhance quality of
p/s.
Activity often outsourced if not adding value.
PE2STLE analysis:
Factors that impact business, strategies formulated to overcome challenges.
SWOT analysis:
Internal & external environment
, Delphi technique:
Method to obtain opinions of experts without necessarily engaging with them face-to-face.
The reason it remains anonymous (not always) is to prevent subjectivity and personal opinions
preventing members from expressing their opinions critically.
Resource-based approach:
Analyses which resources are of strategic importance to the business.
Assist in creating comp. advantage.
Includes tangible and intangible resources.
Balanced scorecard:
Describe key outcomes that business wants to “measure” to improve these outcomes.
Forces management to focus on things that add value.
4 elements of traditional Balance Scorecard:
- Financial perspective: focuses on max utilisation of assets and minimising costs to create
shareholder value.
- Customer perspective: focuses on how customers see business, and their expectations.
- Internal business perspective: focused on innovative p/s, management of operations and social
investments to improve bus.
- Learning and growth perspective: how employees can improve and create value.
o Intangible assets developed by employees = leadership, accountability, teamwork etc.
3. FORMULATING STRATEGIES
Keep close eye on events in internal/external environments:
- Internal
o 8 bus. functions evaluated by SWOT, Resource-Based Approach, Value Chain Analysis and
Balanced Scorecard.
- External
o Market (Porter’s six forces) and macro (PE2STLE), and O and T.
Strategic management = Top management analyses events that take place in the business
environment. Decisions and actions are taken into response to the analysis. Those then form the
strategies of the business.
- Events may be something that develops overtime (trend) or may come as a surprise (crisis)
Vision = a statement about what your organisation wants to become. Mission = a description of what
an organisation does or the purpose of the business.
Once the vision and mission are formulate the business will outline:
Long-term and short-term objectives = when formulating objectives the future is the starting point.
(Business should ‘create its own future’) Do this by aligning the present situation with the desired
When considering performance of a business, consider possible impacts from all environments.
The impact will depend on the strategies implemented.
1. IMPORTANCE OF CREATIVE THINKING AND PROBLEM-SOLVING TECHNIQUES TO
IMPROVE PERFORMANCE
Creative thinking = identifying a problem the consumer is not aware of yet and finding a way to
solve it (customer must always be happy)
Aim of finding creative solutions = create and maintain competitive advantage.
Business must constantly adapt to ensure customer needs are satisfied.
Can't solve new problems using old solutions. Need to be creative.
POSSIBLE STEPS DURING PROBLEM-SOLVING PROCESS
Explain the
Identify the impact on Choose the best
resource gap and business and solution(s) and
obtain these consider explain it in
resources different breadth & depth
solutions
2. CREATIVE THINKING/PROBLEM-SOLVING TECHNIQUES
Pros and Cons chart:
Helps weigh advantages/disadvantages of certain option
Decision tree:
Visual representation of different outcomes to a single
event
Helps view different options and consequences of each.
Value chain analysis:
Studies where and how value is added.
Looks at business process to see where value added in cost-effective manner to enhance quality of
p/s.
Activity often outsourced if not adding value.
PE2STLE analysis:
Factors that impact business, strategies formulated to overcome challenges.
SWOT analysis:
Internal & external environment
, Delphi technique:
Method to obtain opinions of experts without necessarily engaging with them face-to-face.
The reason it remains anonymous (not always) is to prevent subjectivity and personal opinions
preventing members from expressing their opinions critically.
Resource-based approach:
Analyses which resources are of strategic importance to the business.
Assist in creating comp. advantage.
Includes tangible and intangible resources.
Balanced scorecard:
Describe key outcomes that business wants to “measure” to improve these outcomes.
Forces management to focus on things that add value.
4 elements of traditional Balance Scorecard:
- Financial perspective: focuses on max utilisation of assets and minimising costs to create
shareholder value.
- Customer perspective: focuses on how customers see business, and their expectations.
- Internal business perspective: focused on innovative p/s, management of operations and social
investments to improve bus.
- Learning and growth perspective: how employees can improve and create value.
o Intangible assets developed by employees = leadership, accountability, teamwork etc.
3. FORMULATING STRATEGIES
Keep close eye on events in internal/external environments:
- Internal
o 8 bus. functions evaluated by SWOT, Resource-Based Approach, Value Chain Analysis and
Balanced Scorecard.
- External
o Market (Porter’s six forces) and macro (PE2STLE), and O and T.
Strategic management = Top management analyses events that take place in the business
environment. Decisions and actions are taken into response to the analysis. Those then form the
strategies of the business.
- Events may be something that develops overtime (trend) or may come as a surprise (crisis)
Vision = a statement about what your organisation wants to become. Mission = a description of what
an organisation does or the purpose of the business.
Once the vision and mission are formulate the business will outline:
Long-term and short-term objectives = when formulating objectives the future is the starting point.
(Business should ‘create its own future’) Do this by aligning the present situation with the desired
