Different tools and techniques are used to investigate, understand, and model other organisational systems. The commonly utilised tools and techniques include Porter’s Five Forces Analysis, Process Modelling Techniques, SWOT analysis, PESTEL analysis, Data Modelling, and Five Whys. In this module, each tool and technique will be addressed. Therefore, the aim of this critical analysis, or instead review, is to evaluate the efficacy and relevance of every tool and technique across different organisational system perspectives. By utilisation of other academic literature, this paper will deeply explore the strengths and weaknesses of the various tools and techniques, further assessing and discussing each device and technique’s effectiveness in different organisational settings for insights and decision-making.
The Five Whys technique is an intuitive and straightforward problem-solving technique used widely to determine the fundamental cause of a particular problem. Usually, a series of why questions are asked, thus this tool has been a concern of criticism and discussion within the academic literature. Additionally, Five Ways is a repeated interrogative tool used to survey the cause-and-effect underlying a correlation of a specific problem. Different critiques surround the Five Whys tool.
Firstly, one critique of the Five Whys technique or rather tool is the method needs to be more complex, hence the tool cannot be productive in a compound organisational system. Compound organisation systems have problems with numerous causes that are correlative, therefore, the technique can experience difficulties in disentangling the issues. Research carried out by famous management authors and thinkers shows that the Five Whys technique is unproductive mainly due to its focus on the traits of the problem rather than the root causes of the specific situation. Additionally, Roderich (2021) suggests that the Five Whys technique does not promote critical and more profound thinking or examination, thus leading to the recognition of external causes rather than the underlying causes of the problem.
Secondly, the Five Whys is also criticised because the technique is subjective and can be influenced by the biases of the person responsible for the analysis. Rajeh (2020) highlights the possibilities for confirmation of discrimination and the tendency to halt at an appropriate root cause rather than proceeding and exploring the problem cause further. It is very significant for an organisation to ensure the responsible people carrying out the analysis are backed up with the required skills and expertise that will allow them to identify and inspect the root causes of a specific effectively without biases.
However, despite the criticism, the Five Whys technique is helpful in various organisational systems. For instance, the Five Whys can be beneficial in cases where the problem in a corporate strategy is not complicated, and the cause of the problem and the effect correlations are concise and clear. The technique can also be effective in smaller and less complex organisational systems where the problem can be determined, inspected, and addressed immediately. Therefore, the effectiveness and practicality of the Five Whys technique within an organisation system depend on the problem compounders and the skills and expertise of the people carrying out the analysis. Thus the method should be utilised in conjunction with different problem–solving tools and techniques to have a comprehensive and successful study of the problem and its causes.
Porter’s Five Forces of Analysis
Porter’s Five Forces of analysis is a model of organisational system tool credited to Michael Porter as the developer. The device is a framework that is widely utilised in the analysis of the competitive environment of a market or industry on that a company or organisation is based. The model recognises typically the five vital forces that determine the competitive intensity, advantage, and attractiveness of the market or industry. The five forces act as the bargaining power of the buyers, the bargaining power of suppliers, the threats of substitutes, the threats of new entrants, and the power of rivalry within the market among the available competitors. The tool has been widely adopted among various business operations, however, there are a number of critiques regarding the model’s theoretical underpinning, the model’s capabilities to explain the complexity of today’s business environments, and the practicality in various organisation systems contexts.
Firstly, Porter’s Five Forces of analysis are criticised based on the classicist economic framework due to the model’s assumption that the markets are both competitive and coherent. Deszczyński (2021) criticises this assumption and argues that the markets are normally characterised by substandard competition, information imbalance, and power asymmetries among the stakeholders. Additionally, the framework assumes that each organisation within the market is a profit-maximising institution which is after gaining a competitive advantage over the organisation’s competitors. The organisation, therefore, tends to ignore significant organisational objectives including environmental sustainability, ethical considerations, and social responsibilities.
Secondly, Porter’s Five Forces model of analysis is criticised since it generalises the complexity of today’s business environments that are normally specified by swift technological advancements, interdependence among industries, and globalisation. According to Siggelkow & Terwiesch (2019), Porter’s Five Forces model of analysis, cannot adequately express the factors that shape competition in rising industries or rather in markets that are going through a rapid transformation. Additionally, the model focuses on the five forces available within a specific industry that can overlook significant business environment factors including regulatory changes, social trends, and macroeconomic ambiance that can affect the organisation’s achievements.
Despite Porter’s Five Forces being utilised widely among profit business contexts, its applicability has been widely debated among organisational systems contexts including government agencies, nonprofit organisations, and cooperatives. Belton (2017) argues that the model is less applicable among the contexts since the organisations contain different stakeholders, decision-making processes, and goals compared to profit businesses. For instance, a non-profit organisation can prefer social impact to financial gain, whereas government agencies mostly prefer policy objectives instead of competition.
Process modeling technique is a critical constituent of business process management that is involved in the creation of visual presentations of the processes underpinning organisational operations. The technique’s purpose is to offer a standardised and structured outlook to process structuring that can generate increased efficiency, good decision-making, and upgraded quality. Process model technique is extensively categorised into two parts including flowchart-based and language-based. The flowchart-based category uses graphical symbols to present step by step of a specific process and information flow among the processes. It includes Business Process Model and Notation. Language-based on the other hand uses formal language to explain step-by-step processes as well as the interactions between them. A good example is the Business Process Execution Language.
Gramacy (2020) suggests that both flowchart-based and language-based techniques have their benefits and limitations. The flowchart-based technique is simple to use and contemplate, thus making it useful for communicating with stakeholders that are not familiar with the language-based technique. However, the technique is limited in its ability to capture compound processes as well as may lack precision in stating the process rules. On the other hand, the language-based technique gives a more precise and accurate presentation of a process, thus allowing for more detailed examination and simulation. However, this technique requires a consequential amount of training and experience, hence it is hardly accessed by non-experts.
Process modeling has been widely used in different organisational systems contexts such as healthcare, manufacturing, and service industries. However, according to Dumas et al. (2019), the usefulness and practicality of the technique can be affected by a number of factors including process complexity, information systems infrastructure, and organisational culture. For instance, in organisations with strong cultures of opposition to change, there can be a number of challenges in terms of adopting process modeling. Similarly, in highly compound processes, the technique cannot be able to express every variation and difficulty of the process. In addition, for organisations that have poor information systems infrastructure, the technique can be less efficient in pointing out process improvement opportunities.
PESTEL analysis is a tool for strategic management utilised in the evaluation of the macro-environmental factors that can affect the organisation’s performance. Additionally, the tool is used to also identify an organisation’s opportunities as well as the threats that can affect its operations. The tool, however, has been criticised severally in terms of limited scope and lack of prioritisation.
To begin with, the limited scope is one of the criticisms of PESTEL analysis. Morgan (2017) analyses the tool and determines that it only focuses on the external environment of a business organisation, thus neglecting the internal factors that can affect the organisation’s operations. The tool only examines external factors influencing the firm such as political, economic, social, technological, environmental, and legal factors. However, the tool does not include internal organisational factors such as the organisation’s resources, capabilities, structure, and culture. The limited scope can easily lead to a one-sided analysis of an organisation’s condition, where the analysis only highlights exterior factors and neglects internal factors.
Lack of prioritisation is also another criticism surrounding the PESTEL analysis tool. According to Hassanien (2021), PESTEL treats each factor equally, despite other factors being more important compared to others. The tool generally consists of identifying and examining the various environmental factors, however, different organisations have different or rather do not have factors of equal importance.
Despite the criticisms surrounding the PESTEL analysis tool, the tool is still significant in the analysis of the external environment as well as in identifying threats and opportunities. The usefulness and applicability of PESTEL analysis rely on the organisational systems perspective to which the tool is used. The tool is mostly used in the public sector, international, and private sector organisations.
One more way to get a conceptual picture of your data and the connections between them is through data modeling. As a method of data modeling, entity-relationship modeling has seen widespread adoption (ERM). ERM depicts the entities, their characteristics, and the relationships between them. The academic literature contains in-depth analyses of the advantages of ERM. For instance, Lam (2017) found that ERM was an effective method for healthcare data modeling. Data quality, redundancy, and consistency were found to have been enhanced as a direct result of ERM’s efforts.
Another technique for data representation is object-oriented modeling (OOM). The OOM method models the connections between data objects. OOM has been helpful in software development. Raczynski (2022) found that OOM is an effective technique for creating OOM software. The authors concluded that OOM helped them create better software in less time which was also easier to maintain.
However, some researchers have cast doubt on the validity of data modeling techniques. Baird’s (2021) study, for one, found that data modeling is usually too laborious, time-consuming, and difficult to keep up to date. Some workplaces, they argued, would benefit more from adopting a different approach, such as an agile development methodology.
By analysing the company’s strengths, weaknesses, opportunities, and threats, SWOT analysis is a standard strategic management tool for assessing the internal and external aspects that influence the organisation’s success.
One of SWOT analysis’s biggest strengths is how easy it is to use. It’s a straightforward app that won’t require any specialised knowledge to operate. It is a quick and easy method for weighing the benefits and drawbacks of a company, which can aid in their decision-making. In addition, a SWOT analysis helps businesses match their internal resources with external opportunities and threats (Sarsby, 2016).
The limitations of SWOT analysis, however, have been highlighted. One common criticism is that it provides an incomplete picture of the internal and external contexts in which a business operates. Because it has a propensity to oversimplify challenging problems and neglect crucial nuances, the instrument might lead to inaccurate or insufficient analysis, as stated by Taylor and Woodhams (2022). Furthermore, when doing a SWOT analysis, the strategic context of a company’s mission, values, and goals is rarely included. This could lead to a narrow perspective that fails to account for all of the variables that could affect an organisation’s performance.
SWOT analysis is useful in many contexts where organisational structures are involved, despite its severe limitations. It can be useful in settings where both time and materials are limited, such as micro- and small-sized enterprises (SMEs). The SWOT analysis is an easy and efficient method for small and medium-sized businesses (SMEs) to assess their internal and external environments and identify growth opportunities (Fisher et al., 2020). SWOT analysis is useful for project managers because it helps them foresee potential issues and develop workable solutions.
Future Fuel Chemical Corporation is a prominent biodiesel and specialised organic chemical provider. The company serves government, commercial, and private customers and had a great Q3 2022 financial performance. Future Fuel Chemical Company’s goods and operations are environmentally friendly. The SWOT analysis shows various company vulnerabilities and obstacles. Government policies, fuel costs, and demand affect the biofuel market, which Future Fuel Chemical Company relies on. Most consumers are American, limiting the company’s geographic scope. Future Fuel Chemical Company also concentrates on biodiesel and biofuels. Comparatively, the company has low brand recognition and market share.
Future Fuel Chemical Company has numerous options despite these challenges. In biofuel-demanding countries, the corporation can develop internationally. The company can also generate biofuels and other green chemicals. Future Fuel Chemical Company can also cooperate with biofuels firms to benefit on consumer demand for sustainable and ecologically friendly products.
Future Fuel Chemical Corporation should be aware of many SWOT risks. Biofuel sector giants pose a major danger. The corporation may potentially be affected by regulatory uncertainties and biofuel and renewable energy policy changes. The company’s financial success is also threatened by feedstock and other biofuel raw material price fluctuations. Finally, Future Fuel Chemical Corporation must watch disruptive technologies or alternative energy sources that could replace biofuels.
In conclusion, Future Fuel Chemical Corporation is a biofuels market leader and environmentally responsible. To be competitive and agile, the organisation must solve various issues. Future Fuel Chemical Corporation should enter new markets, diversify its product line, form strategic partnerships, and continuously monitor renewable energy regulations and technology to capitalise on possibilities and manage risks.
There are different tools and techniques including SWOT analysis, PESTLE analysis, data modeling, Five Whys, Porter’s Five Forces, and Process modeling that are used for investigating, understanding, and modeling different organisational systems. However, the six models are used in different contexts while others can be used simultaneously. Additionally, the six techniques have their own benefits and limitations which have been criticised by various scholars.
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