Addis Ababa medical and business
college
Department information technology
Unit of competency improve business
practice
Pre by instr. Jaleto S.
introduction
� To improve business performance, you need to
understand your business’ current performance and be
familiar with your business goals and targets.
Diagnosis the business
� Organizational Diagnosis
❑ Organization diagnosis is a process that helps
organizations to improve their capacity to assess and
change inefficient patterns of organizational behavior
as a basis for greater effectiveness.
❑ Organizational diagnosis is an effective ways of
Looking at an organization to determine gaps between
current and desired performance and how it can
achieve its goals.
❖There are six step processes for major organization
development efforts.
These are:
1.Clarification of whole organization objectives,
2.Data gathering and sharing,
3.Diagnosis of organization strengths and weaknesses,
4.Joint action presentation of organizational development
interventions to correct weaknesses
5.Implementation of organizational development
intervention, and\
6.Periodic progress review of results.
✔Diagnosis is a cyclical process that involves data
gathering, interpretation and identification of
the problem areas and possible action programs.
✔Each organizational culture profile reflects
underlying attributes including the management
style, strategic plans, climate, reward system,
leadership, and basic values of the
organization.
✔ So, changing the culture requires that these
various elements of culture be identified and
altered.
❑ Organizations try to achieve a sustainable
competitive advantage by learning its environment
through a scanning process as the environment is a
determinant of human resource management.
Diagnosing the environment is an assessment
process that focuses on determining the readiness of the
target group to accept change.
Data gathering methods
intervie
ws
Employe
e survey
questio
nnaires
Primary
source
Secondar
y source
Some major data gathering methods are:
�Secondary sources of data:- which are generated for
other organizational purposes that can be used in
identifying problem areas, such as: performance
indicators, accounting data, productivity and quality data.
�Primary source of data:- Direct observation of people
behaviors is another important source of data. This can
include member actions or reactions to specific situations,
and communication patterns.
�The other method of data collection is employee
survey. The data provide a snapshot of an existing
situation, and can be used to compare an organization’s
current state with some desired state.
�Questionnaire-based surveys are one of the most
effective tools for organizational diagnosis practitioners
to understand and evaluate organizational issues.
�Interviews (can be structured, semi-structured or
informal) are also the most widely used data gathering
technique in organizational diagnosis programms.
�SWOT Analysis
❖ S=strength
❖ W=weakness
❖ O=opportunity
❖ T=threat
�Task analysis is conducted to exactly identify the
employee needs to do his/her job effectively
�The other model for organizational diagnosis is
Growth-share matrix.
BENCHMARK THE BUSINESS
What is benchmarking?
❑ Benchmarking is simply the process of measuring the
performance of one's company against the best in the same
or another industry. Benchmarking is basically learning
from others.
❑ Therefore, benchmarking is a continuous systematic/
structured/formal process for
assessing/measuring/comparing the organizations.
�In business, benchmarking has come to mean variety of
things. It has assumed a very special significance in
today’s competitive world. Benchmarking is one of the
many techniques that one can employ to gather
management information.
�The knowledge that is available for comparing operations
and processes are vast.
Role of Benchmarking
The role of benchmarking is to provide management with
knowledge of what constitutes ‘best performance’ or
‘superior performance’ in a particular field. Best
performance relates to output, efficiency, quality and any
other measurement relevant to performing the job.
Benchmarking not only investigates what best practice
means in terms of performance yardsticks but also
examine how best practices is achieved.
❖ Generally, there are three reasons that
benchmarking is becoming more commonly used in
industry.
These are:
⮚ Benchmarking is a more efficient way to make
improvements.
⮚ Benchmarking speeds up organization’s ability to
make improvements.
⮚ Benchmarking has the ability to bring
organizational performance up as a whole
significantly.
Types of benchmarking
�There are four primary types of benchmarking.
�Process benchmarking
�Performance benchmarking
�Strategic benchmarking
�Internal benchmarking
There are four main steps that should to be
followed to conduct benchmarking.
�Step 1 – Plan the study
✔Establish benchmarking roles and
responsibilities
✔Identify the process to benchmark
✔Document the current process
✔Define the measures for data collection
Cont,,
�Step 2 – Collect the data
�Record current performance levels
�Find benchmarking partners
�Conduct the primary investigation
�Make a site visit
�Step 3 – Analyze the data
✔Normalize the performance data
✔Construct a comparison matrix to compare your current
performance data with your partners’ data
✔Identify outstanding practices
✔Isolate process enablers
�Step 4 – Adapt enablers to implement
improvements
✔Set stretching targets
✔“Vision” an alternative process
✔Consider the barriers to change
✔Plan to implement the changes
DEVELOP BUSINESS GROWTH AND
EXPANSION PLAN
Planning for the BUSINESS GROWTH
Business planning has become a very important part
of the top management function due to the influence of
external environmental factors and systems approach to
the business management. Business planning is
strategic planning because it is concerned mainly with
the designing of business
According to Scott, long-range business planning is
a systematic approach to decision making about issues
which are fundamental and of crucial importance to its
continuing long term effectiveness.
What is Planning?
�Planning is deciding now what we are going
to later including when and how we are going
to do it.
�The scope of planning activities may cover
long or short period of time/range.
Long Term/Range Planning/Strategic Plan
Strategic plan is a plan that matches an organization’s
resources with its market opportunity, over the long-run.
Long-range strategy is designed to provide information about
an organization’s vision, mission , direction and objectives.
� Implementation planning, explains the details of the
policies and procedures, which are required to accomplish
the strategies of the firm. These plans produce immediate
and tangible results in relatively shorter period. However,
the business planning is concerned with:
Cont,,
1.The direction in which the company should
move,
2. The implementation of the plan for the
subsequent period, and
3.The alternatives which are to be sacrificed, if
the plan is accepted and implemented.
Benefits of Business Planning
The benefits of business planning include
1. Helps the company to formulate and achieve
objectives and goals clearly
2. Helps to avoid piece-meal approach and to have
integrated approach.
3. Helps to view the organization in total rather than
department-wise.
4. Aims at the long-range plan rather than short-range
plan.
Cont,,
5.Integrates the company plan with the national plans
and priorities
6. Helps to see both the internal and external
environmental factors.
7. Contributes for the achievement of high rate of
profits.
8. Helps to determine potential growth and profit.
Proactive and Reactive Management
� The best management is primarily proactive and then
reactive.
How to be Proactive
1. They should plan for short and long term periods of time
2. They should work closely with technical and marketing
staff to determine marketing opportunities
3. They should encourage innovation.
4. They should pretest markets. poll
5. They should consider opinions and suggestions of
employees
6. They should take calculated risks.
Meaning of Strategic Management
�Strategic management is a stream of decisions and
actions which leads to the development of an effective
strategy or strategies to help achieve corporate
objectives. According to this definition the end result of
strategic management is a strategy or a set of strategies
for the organization.
Strategy planning
The strategy planning process allows the business
to identify and understand what things need to be
done and what resources are required in order to
be able to implement the strategy that has been
previously designed.
Conducting the value chain analysis
What is a value chain?
The definition of value chain is sequence
of activities that an enterprise operating in
a specific sector and sub sector performs in
order to deliver a valuable product or
service to the market.
In general terms, value chain can be defined from
the:-
•The macro perspective:- the value chain is the
complete sequence of tasks that are required to bring
a product from the initial idea to the final consumer; it
includes product design, sourcing of raw materials
and intermediate inputs ,marketing and distribution.
•The micro /company’s perspective:- from the
company’s perspective, it buy its inputs from one or
many suppliers and it sells its output to one or many
clients.
Benefits /importance of value chain analysis
•There are sets of reasons why value chain analysis is
important in this era of rapid globalization.
•Simple and better way to identify gaps
•Increases efficiency and systemic competitiveness of
local enterprise
•Reduces production costs and improves profitability
•Improves client satisfaction by providing quality product
and services
•It denotes where or at which stage value is added and
how much insight into why the firm does or does not
have added value
•A way to identify opportunities to improve added value
Value chain analysis is a three steps process:
•Activity analysis: first, you identify the activities
you undertake to deliver your product or service.
•Value analysis: second, for each activity, you
think through what you would do add the greatest
value for your customer.
•Evaluation and planning : thirdly, you evaluate
whether t is worth making changes, and then plan
for action.
SWOT analysis for enterprise
Strengths-
•What advantages does your organization have?
•What do you do better than anyone else?
•What unique or lowest- cost resources can you
draw upon that others can’t?
•What do people in your market see as your
strengths?
Weaknesses
•What could you improve?
•What should you avoid?
•What are people in your market likely
to see as weaknesses?
Opportunities
•Can you introduce new products or remarket existing ones
to seem new?
•Is there a gap in the market?
•Can you sell more cheaply?
•Can you offer a better product –price-mix?
•Are your costs lower? Or production methods more
efficient?
•Do you have spare capacity?
•Do you have resources that can be used or used more
efficiently?
•Are there opportunities to co-operate? Or join market?
•Is the political, economic, social, or technological
environment changing to your advantage?
Threats
•Can your competitor offer better quality
•Lower price, better marketing, or a higher
added value?
•Will legislative, political, economic,
•Technological, commercial, personal,
•Resource level, or financial changes,
Threaten your market?
n d
Th ee
Thank you for attention!
to S.
Ja le
ns t.
y i
. B
Pre
