The process of strategy evaluation is often overlooked in the overall strategic management process. After the flurry of activity in the initial planning stages, followed by the reality check of executing your strategy alongside business-as-usual, strategy evaluation is often neglected. When this occurs, strategies quickly become outdated and out-of-sync with the changing face of the organization.
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What is Strategy Evaluation?
The strategy evaluation process involves analyzing your strategic plan and assessing how well you’ve done against achieving the goals in your strategy. A strategy evaluation is an internal analysis tool and should be used as part of a broader strategic analysis for the organization when making decisions about your strategy.
Typically, the strategy evaluation process involves answering questions such as:
How much progress have we made towards our Vision?
Are our Strategic Focus Areas still relevant?
Which of our Objectives have we completed?
Which Objectives are no longer needed?
Do we have sufficient Projects to deliver incomplete Objectives?
Are our KPIs still effective for measuring progress towards our Objectives?
Where we fell short of our targets, why did this happen?
A strategic review is a structured process to identify new value-creating opportunities within a business. This could be about improving the performance of an existing division or taking advantage of a new market adjacency opportunity. Many companies undertake strategic reviews on an annual basis as part of their strategic planning process. Other businesses will undertake them on a more ad hoc basis when presented with a specific opportunity or problem within the business. A change of ownership or appointment of a new CEO can often trigger the need for a strategic review of the business as a way to clarify the key areas of opportunity and challenges within the existing portfolio. Whatever its origins, a strategic review should be a clear fact-based analysis of the business opportunity or issue. It provides an opportunity to step back from day-to-day operations to assess the strategic foundations on which a business is built. The outcome of a strategic review should be a clear set of strategic recommendations and a future roadmap for the business that charts its course and enables increased and sustained performance now and for the future.
Your working style depends on your organizational structure. The organizational structure defines your role and responsibilities and work culture. This culture includes work environment, reporting system, hierarchy, etc. An organization can adapt to any structure as per their requirements. If they are dealing with the projects, they will choose a projectized organization. However, an organization dealing with operations will stick with a functional structure. Every organizational structure has a different system. In a projectized organizational structure, you report to the project manager. In a functional organizational structure, you report to a functional manager. In a matrix organizational structure, it depends. I have discussed the matrix and projectized structures in other blog posts. Now, we will discuss the functional organizational structure.
What is a Functional Organizational Structure?
A functional structure divides the organization into departments based on their function. Each is headed by a functional manager and employees are grouped as per their role. Functional managers have experience in the roles they supervise. This ensures that employees are using their skills effectively. It helps organizations in achieving their business objectives.
Employees are classified according to their function in this structure. The organizational chart for a functional structure shows the role hierarchy: for example, president, vice president, finance department, sales department, customer service, administration, etc.
Each department has a head responsible for it. This helps the organization control the quality and uniformity of their performance. These employees are very skilled. They are experienced in the same work and they perform excellently; productivity is high in a functional structure.
Functional departments are sometimes referred to as “silos.” This means the system is vertical and disconnected, communication flows through the department heads to the top management.
Here, all authority stays with the functional manager. Usually, the project manager does not have any role in this structure. Their role will be minimal, even if they exist. They will need the functional manager’s approval to use resources and they may act as a coordinator or an expediter.
The functional organization structure is suitable for a business dealing with operations, like manufacturing industries.
Most small industries with only a few products use this structure. The employees are highly skilled due to repetitive work which means high efficiency and the best performance.
Definition: Competitive Advantage means superior performance relative to other competitors in the same industry or superior performance relative to the industry average.
What is competitive advantage?
There is no one answer about what is competitive advantage or one way to measure it, and for the right reason. Nearly everything can be considered as competitive edge, e.g. higher profit margin, greater return on assets, valuable resource such as brand reputation or unique competence in producing jet engines. Every company must have at least one advantage to successfully compete in the market. If a company can’t identify one or just doesn’t possess it, competitors soon outperform it and force the business to leave the market.
There are many ways to achieve the advantage but only two basic types of it: cost or differentiation advantage. A company that is able to achieve superiority in cost or differentiation is able to offer consumers the products at lower costs or with higher degree of differentiation and most importantly, is able to compete with its rivals.
An organization that is capable of outperforming its competitors over a long period of time has sustainable competitive advantage.
The following diagram illustrates the basic competitive advantage model, which is explained below in the article:
How a company can achieve it?
An organization can achieve an edge over its competitors in the following two ways:
Through external changes. When PEST factors change, many opportunities can appear that, if seized upon, could provide many benefits for an organization. A company can also gain an upper hand over its competitors when its capable to respond to external changes faster than other organizations.
By developing them inside the company. A firm can achieve cost or differentiation advantage when it develops VRIO resources, unique competences or through innovative processes and products.
Group behavior is the behavior of human groups, from formation to dissolution. Along with many other organisms, human beings tend to group up and engage in cooperative activities. The behaviors of a group can be highly variable, as can the factors that put pressure on the group. Social psychologists study group behavior. Their work contributes to everything from the development of advertising aimed at specific groups to the understanding of how crowds react to dangerous situations.
Groups can vary widely in size and composition. Individuals tend to drift to people with like characteristics, and the composition of a group that arises organically may be more homogeneous. In contrast, a group with enforced membership, like an assigned group of people in a class who must complete a project together, will be more variable. Various activities may facilitate bonding within the group, one reason many organizations use retreats and ice-breaking exercises to get their members to work together.
Within a group, a number of interesting phenomena can occur and these are topics of study in the field of group behavior. Some personalities may be more dominant than others, and some members may emerge as natural leaders and trendsetters within the groups. Groups can create a situation where individual members will be influenced by each other. Members of the group may act as a herd or mob to make decisions, rather than considering issues as individuals. Groups can also become narrow minded, as seen in group think, where pressures within the group lead to a bad decision.
Humans can be members of more than one group at the same time, and group membership may only be temporary. At a concert, for example, attendees form a group and may behave in unison for a few hours before separating at the end of the event to return to their own lives. While functioning as a group, they can be prone to situations like mass panic that may endanger the group as a whole. Stampedes and tramplings usually involve a series of events that trigger the development of thoughtless and dangerous group behavior.
Understanding the way that groups work is important in a number of settings. For teachers and work supervisors, it is important to know how groups operate and how to improve their functionality. Law enforcement officers, on the other hand, need to know how to control and work with crowds for safety. Marketing professionals also observe group behavior and use their findings to tailor advertisements and public outreach.
Maslow first introduced his concept of a hierarchy of needs in his 1943 paper “A Theory of Human Motivation” and his subsequent book Motivation and Personality. This hierarchy suggests that people are motivated to fulfill basic needs before moving on to other, more advanced needs.
While some of the existing schools of thought at the time (such as psychoanalysis and behaviorism) tended to focus on problematic behaviors, Maslow was much more interested in learning about what makes people happy and the things that they do to achieve that aim.
As a humanist, Maslow believed that people have an inborn desire to be self-actualized, that is, to be all they can be. In order to achieve these ultimate goals, however, a number of more basic needs must be met such as the need for food, safety, love, and self-esteem.1
There are five different levels of Maslow’s hierarchy of needs. Let’s take a closer look at Maslow’s needs starting at the lowest level, known as physiological needs.
From Basic to More Complex Needs
Maslow’s hierarchy is most often displayed as a pyramid. The lowest levels of the pyramid are made up of the most basic needs, while the most complex needs are at the top of the pyramid.
Needs at the bottom of the pyramid are basic physical requirements including the need for food, water, sleep, and warmth. Once these lower-level needs have been met, people can move on to the next level of needs, which are for safety and security.
As people progress up the pyramid, needs become increasingly psychological and social. Soon, the need for love, friendship, and intimacy becomes important. Further up the pyramid, the need for personal esteem and feelings of accomplishment take priority.
Like Carl Rogers, Maslow emphasized the importance of self-actualization, which is a process of growing and developing as a person in order to achieve individual potential.
Deficiency Needs vs. Growth Needs
Maslow believed that these needs are similar to instincts and play a major role in motivating behavior.2 Physiological, security, social, and esteem needs are deficiency needs, which arise due to deprivation. Satisfying these lower-level needs is important in order to avoid unpleasant feelings or consequences.
Maslow termed the highest level of the pyramid as growth needs. These needs don’t stem from a lack of something, but rather from a desire to grow as a person.
While the theory is generally portrayed as a fairly rigid hierarchy, Maslow noted that the order in which these needs are fulfilled does not always follow this standard progression. For example, he noted that for some individuals, the need for self-esteem is more important than the need for love. For others, the need for creative fulfillment may supersede even the most basic needs.
Physiological Needs
The basic physiological needs are probably fairly apparent—these include the things that are vital to our survival. Some examples of physiological needs include:
Food
Water
Breathing
Homeostasis
In addition to the basic requirements of nutrition, air and temperature regulation, the physiological needs also include such things as shelter and clothing. Maslow also included sexual reproduction in this level of the hierarchy of needs since it is essential to the survival and propagation of the species.
Security and Safety Needs
As we move up to the second level of Maslow’s hierarchy of needs, the requirements start to become a bit more complex. At this level, the needs for security and safety become primary. People want control and order in their lives, so this need for safety and security contributes largely to behaviors at this level.
Some of the basic security and safety needs include:
Financial security
Heath and wellness
Safety against accidents and injury
Finding a job, obtaining health insurance and health care, contributing money to a savings account, and moving into a safer neighborhood are all examples of actions motivated by the security and safety needs.
Together, the safety and physiological levels of the hierarchy make up what is often referred to as the basic needs.
Social Needs
The social needs in Maslow’s hierarchy include such things as love, acceptance, and belonging. At this level, the need for emotional relationships drives human behavior. Some of the things that satisfy this need include:
Friendships
Romantic attachments
Family
Social groups
Community groups
Churches and religious organizations
In order to avoid problems such as loneliness, depression, and anxiety, it is important for people to feel loved and accepted by other people. Personal relationships with friends, family, and lovers play an important role, as does involvement in other groups that might include religious groups, sports teams, book clubs, and other group activities.
Esteem Needs
At the fourth level in Maslow’s hierarchy is the need for appreciation and respect. When the needs at the bottom three levels have been satisfied, the esteem needs begin to play a more prominent role in motivating behavior.
At this point, it becomes increasingly important to gain the respect and appreciation of others. People have a need to accomplish things and then have their efforts recognized.
In addition to the need for feelings of accomplishment and prestige, esteem needs include such things as self-esteem and personal worth. People need to sense that they are valued and by others and feel that they are making a contribution to the world. Participation in professional activities, academic accomplishments, athletic or team participation, and personal hobbies can all play a role in fulfilling the esteem needs.
People who are able to satisfy the esteem needs by achieving good self-esteem and the recognition of others tend to feel confident in their abilities. Those who lack self-esteem and the respect of others can develop feelings of inferiority.
Together, the esteem and social levels make up what is known as the psychological needs of the hierarchy.
Self-Actualization Needs
At the very peak of Maslow’s hierarchy are the self-actualization needs. “What a man can be, he must be,” Maslow explained, referring to the need people have to achieve their full potential as human beings.
According to Maslow’s definition of self-actualization:
“It may be loosely described as the full use and exploitation of talents, capabilities, potentialities, etc. Such people seem to be fulfilling themselves and to be doing the best that they are capable of doing… They are people who have developed or are developing to the full stature of which they capable.”
Self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, and interested in fulfilling their potential.
Criticisms of Maslow’s Hierarchy of Needs
Maslow’s theory has become wildly popular both in and out of psychology. The fields of education and business have been particularly influenced by the theory. While popular, Maslow’s concept has not been without criticism.
Chief among these:
Needs Do Not Necessarily Follow a Hierarchy
While some research showed some support for Maslow’s theories, most research has not been able to substantiate the idea of a needs hierarchy. Wahba and Bridwell reported that there was little evidence for Maslow’s ranking of these needs and even less evidence that these needs are in a hierarchical order.
The Theory Is Difficult to Test
Other criticisms of Maslow’s theory note that his definition of self-actualization is difficult to test scientifically. His research on self-actualization was also based on a very limited sample of individuals, including people he knew as well as biographies of famous individuals that Maslow believed to be self-actualized.
Why Was Maslow’s Hierarchy of Needs so Influential?
Regardless of these criticisms, Maslow’s hierarchy of needs represents part of an important shift in psychology. Rather than focusing on abnormal behavior and development, Maslow’s humanistic psychology was focused on the development of healthy individuals.
While there was relatively little research supporting the theory, the hierarchy of needs is well-known and popular both in and out of psychology. In a study published in 2011, researchers from the University of Illinois set out to put the hierarchy to the test.3
What they discovered is that while the fulfillment of the needs was strongly correlated with happiness, people from cultures all over the world reported that self-actualization and social needs were important even when many of the most basic needs were unfulfilled.
Such results suggest that while these needs can be powerful motivators of human behavior, they do not necessarily take the hierarchical form that Maslow described.
Organizational behavior models help you craft strategies to get employees to perform a certain way in certain situations. As the company leader, providing employees with an environment to succeed helps the business succeed. There are five main management models of organizational behavior in the workplace.
Autocratic Model of Organizational Behavior
The autocratic model of organizational behavior puts the boss in charge and the subordinates in a position to obey commands or be fired. It’s black and white, regarding who is in charge and quickly establishes consequence for insubordination or lack of performance. This environment uses a paycheck as the reward system rarely implementing any other incentive programs.
Loyalty, if it exists, is generally to the boss and not the company. This model can create a fearful workforce, unsure if any mistake could lead to disciplinary action.
Custodial Model of Organizational Behavior
Custodial models seek to make employees feel as if the boss is caring for their personal needs. This is often done through benefits packages such as healthcare, retirement plans and other incentives. An executive visiting various territory offices could get a company car as an incentive.
The custodial model looks to retain quality people by providing incentives that are meaningful to the employee. Loyalty is to the company and not individual company leaders.
Collegial Model of Organizational Behavior
The collegial model works to develop a structure in which managers are more like coaches and employees are team members. Power is shared to some degree. The coach leads through inspiration. In this model, the loyalty is to the bigger goal, and team responsibility rather than to an individual. Employees feel invested in the success of the company and take pride in the successful execution of goals.
Supportive Model of Organizational Behavior
The supportive model seeks to understand what motivates employees and focuses on those things to motivate and inspire. When employees are given opportunities to improve themselves, they often take personal initiative to perform better at their job. Managers support employees as they work toward established personal goals such as promotion or acquisition of new skills. In this model, a manager would ask employees for professional goals and would work with them to establish an action plan to succeed with them.
System Model of Organizational Behavior
The system model is really the foundation of positive corporate cultures. When people think about why LinkedIn is a great place to work, for example, it is because of the incentives, work schedule flexibility and creative encouragement that leadership provides. It is nurturing yet challenging, and so efficiency and productivity increase in a happier work environment that’s loyal to the company and excited to share its vision.
Small business owners don’t need to try to compete with what LinkedIn does, but should develop strategies within their resources to build a positive corporate culture.
Findings from organizational behavior research are used by executives and human relations professionals to better understand a business’s culture, how that culture helps or hinders productivity and employee retention, and how to evaluate candidates’ skills and personality during the hiring process.
Organizational behavior theories inform real-world evaluation and management of groups of people. There are a number of components:
Personality plays a large role in the way a person interacts with groups and produces work. Understanding a candidate’s personality, either through tests or through conversation, helps determine whether they are a good fit for an organization.
Leadership, what it looks like and where it comes from, is a rich topic of debate and study within the field of organizational behavior. Leadership can be broad, focused, centralized or de-centralized, decision-oriented, intrinsic in a person’s personality, or simply a result of a position of authority.
Power, authority, and politics all operate inter-dependently in a workplace. Understanding the appropriate ways these elements are exhibited and used, as agreed upon by workplace rules and ethical guidelines, are key components to running a cohesive business.
The Real World is Here 