Vital Organizational Weaknesses Like Organization
Question: How would one distinguish between an organizational weakness and a threat to the organization?
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Many people fail to understand the distinction in between organizational threat and weakness. The threat is denoted as an external danger while weakness represents internal vulnerability. A perfect SWOT-analysis can enable you get a clear perception of both these concepts. Business-position within the market can be easily understood with this popular analysis method. As per Osita et al., (2016), Organization’s productivity-effort and stability can be easily identified by analysis of SWOT (strengths, weaknesses, opportunities, and threats).
Threats always affect both long-term profitability and competition-level of organizations. The arrival of new competitors can be a matter of threat for any existing organization of the same stream. Substitute-products can also create huge threats especially for those organizations that are involved in manufacturing traditional products. As per Gurel, (2017), threat refers to a condition or situation that jeopardizes an activity’s actualization. Environmental-factors affecting organizational effectiveness and efficiency are termed as threats.
The organization should be strong enough in taking those threats sportingly and confidently. If the organization is internally not strong enough then these threats will affect the profit or revenue earning capacity of the concern. To be more precise, weak organizations always get adversely affected by external threats and vice-versa. The rise of industry-standards will make the competition much tougher, and this tough competition is a real threat to any organization.
Internal-assessments need to be analyzed for removing organizational weakness while proper and accurate analysis of external-environments can reduce organizational-threats. SWOT-matrix helps in removing organizational-defects for inviting acute improvements. On the other hand, it also plays a great role in securing future threats by controlling the factors of external environments. If the threats are correctly detected, then opportunities can be planned in a quite easier manner.
Some commonest threats that affect any organization badly are consumer-preferences changes, resource scarcity, strongest dollar-value, poor customer-services, high-cost structure, below-average research-and-development investment, saturated-product market, decreasing net-profit or gross-profit margins and legal requirements for disclosing negative-information over product labels. These threats can affect few vital organizational weaknesses like significant focus over products, undiversified product-portfolio, and negative publicity, high debt-level for acquisitions, increased fuel costs, aging population, increased pay-levels and brand failure. As per Gretzky, (2010), Weaknesses are represented by those organizational-factors that that can either minimized healthcare-quality or can enhance healthcare costs.
The differences in between threats and weakness of organizations are mostly shown within annual reports. Competitive financial-analysis needs to be conducted for determining whether profits, cash-flows, costs revenues and other predominant financial-parameters are matching-up with those of competitors or not. Bargaining-capability of both buyers and suppliers also help in determining the revenue-earning and competition level.
Both weakness and organizational-threats need to be analyzed well for creating strategic planning. In this respect, industry-examination, determination of market-size, shrinking or growth of the market and important industry trends need to be analyzed as well. Both threats and weaknesses can be tackled with great efficiency if internal-policies of organizations can be made strong. Strong organizations will always enable exploring more and more new opportunities that automatically pave the way towards success.
References:
Gretzky, W. (2010). Essentials of Strategic Planning in Healthcare, Strategic Planning & SWOT analysis. Retrieved August 30, 2018, from https://www.ache.org/pdf/secure/gifts/Harrison_Cha…
chapter-5, steps in SWOT analysis, pg-93
Gurel, E. (2017). SWOT Analysis: A Theoretical Review. Retrieved August 30, 2018
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