ACCA - F1

Organization: social arrangement; pursues collective goals; controls its performance; boundary separating from environment.

Organization Characteristics: Perform to meet / improve standard; Formal documentation, system, procedures; People specialization; Pursues variety of goals & objective

Organization can: achieve results an individual can’t achieve alone, be more productive, overcome individual’s limitation, enable people specialization, save time, accumulate and share knowledge and info. (SYNERGY)!

Organization in different type of industry: Agriculture; Manufacturing; Extractive / Raw materials; Energy; Retailing / Distribution; Intellectual production; Service.

Organization are different in terms of: Ownership, Control, Activity, Profit / Non-profit, Legal status, Size, Sources of finance, Technology

Organization – Profit oriented, Non-profit oriented, Non-governmental organization, Private sector, Public Sector, Co-operative societies, Mutual associations.

Profit oriented – Produce goods / service to earn maximum profit.
Non-profit oriented - Minimize cost to provide goods / service for benefits of public.
Non-governmental organization – Non commercial and achieving objectives of promoting social, political, or environment change etc by a group of individuals from different industry and social level.
Private sector comprise of private limited company, public limited company, partnership, sole proprietor
Public sector = Government (local, state, federal)

Private Sector
Bank loan, share, debenture
Expertise in respective field
Profitability

Public Sector
Tax
Politician
Efficiency

Stakeholder Mapping - MEUDELOW
A. Minimal Effort – Low in both Power & Interest
B. Kept informed – High Interest
C. Kept Satisfied – High Power
D. Key Players – High in both Power and Interest

Shareholder is stakeholder; stakeholder is not shareholder.

Environmental analysis (Global / Local; General / Task)= Inputs to strategy making process.

Environmental analysis process:
PEST ANALYSIS
Go in the environment.
What is the major influence?
What is the key force for immediate and competitive environment?
SWOT ANALYSIS
Where is the organization position?
Are the above all threats or opportunities for me?

Why need Environmental analysis:
• Globalization of business enable many organizations have the chance to penetrate others markets (overseas / social class), but at the same time may face more competitors!
• Science and technology development.
• Changing of customers’ values and behavior.
• Changes in business practices (downsizing, outsourcing).
• Bargaining strength of different stakeholder – Government, Public, Trade Union etc.

If organizations do not follow the footstep of changing of the environment, the will be left behind and unable to compete with others, then they will be disqualified!

Environment is a source of UNCERTAINTY!

SWOT Analysis: Strength (exploit), Weakness (improve, remove), Opportunity (exploit), Threats (turnaround, transfer, reduce)

Competitive forces: Threat of new products and substitutes, Bargaining power of customers and suppliers, Rivalry

Value chain: Primary activities Supporting activities