Analysis of an organization
framework classifies the seven elements into soft and hard elements, although all the seven elements are essential because they depend on each other. The hard elements include systems, structures, and strategies (Alam, 2017, p. 1280). They can be influenced by the management directly and are easy to identify. As for the soft elements, they include style, skills, staff, and shared values. The organization’s culture influences them more, and they are less tangible and harder to describe.
First, strategy refers to how the organization plans to build and maintain a competitive advantage in the sector and over its competitors. The establishment of a long-term strategy in alignment with other moments and bringing out the organization’s goals and objectives is ideal. Second, structure entails the organisation of the firm, the structuring of departments and teams, such as reporting lines or organization charts (Alam, 2017, p. 1281). Therefore, an organization’s structure consists of the corporate hierarchy, divisional makeup on interconnectedness and operationalisation, and command chain.
Third, systems refer to routine procedures and activities that form part of the organization’s standard operationalisation and include IT systems and formal processes. Fourth, shared values entail the organization’s core values, often depicted in its general work ethic and corporate culture. Fifth, style refers to leadership style or approach and how it influences its corporate culture, productivity, and performance. Sixth, the staff does not just refer to the personnel but also entails their capabilities, size, motivations, training, and preparation to complete their tasks (Alam, 2017, p. 1283). Lastly, skills refer to the employees’ competence, talents, and skills, which influence what the organization can achieve. Nonetheless, shared value is at the centre of this tool because of the centrality and critical nature of the values in ensuring the other elements’ development.
The 7-S framework is vital in improving performance through realignment or ensuring performance or alignment does not change when effecting other changes such as leadership change, new systems, organizational mergers, new processes, and restructuring. It can help analyse the current situation, the proposed future situation, and help identify inconsistencies and gaps between the current and future situation (Alam, 2017, p. 1285). It can also help in determining future corporate strategy. During analysis, one can start by looking at whether there is consistency between shared values and systems, strategy, and structure. A lack of consistency required the effecting of necessary changes. Second, one needs to look at whether each hard element supports the other elements. Lastly, one can also examine whether the soft elements support the necessary hard elements and other elements. However, one disadvantage of this analysis is that it focusses on internal elements.
1.2 SWOT Analysis
The second tool is the SWOT analysis. This analysis looks at both external and internal factors affecting the organization’s performance. It is useful in the stages preceding any new plan, such as a new strategic marketing plan. When using this analysis tool, four elements constitute it that include (S)trengths, (W)eaknesses, (O)pportunities, and (T)hreats. The SW elements are internal and are under the company’s control. In the external analysis, OT elements are used in the examination (Sarsby, 2016). While the SW analysis looks at the company’s advantages and shortcomings in different areas such as structure, infrastructure, capital, and human resource, OT looks at what supports and deters the company externally, such as competition, regulatory environment, and economic situation. Consequently, SWOT analysis is useful in analysing vast amounts of data and identification of threats and opportunities. However, one of its main disadvantages is the lack of objectivity.
1.3 PESTEL Analysis
The PESTEL analysis is primarily used to look at the impact of external factors on an organization’s performance. It includes (P)olitical, (E)conomic, (S)ociological, (T)echnological, Environmental, and Legal elements. The examination is based on external factors that directly or indirectly affect the business (Yusop, 2018, p. 34). When analysing using the political element, both current and projected situations can be used to understand their influence on the company. Also, the economic factors can be on a local, national, or international level. The sociological element is based on the community’s impact on the organization, such as through hot trends and customer demands.
Fourth, with the continuous emergence of technological advancements, an organization can determine the most favourable technology to keep up with the advancements or how technological advancement will affect them. Fifth, the environmental element includes environmental and ecological aspects (Yusop, 2018, p. 34). Lastly, legal factors mainly comprise different law areas such as antitrust, discrimination, health and safety, employment, and consumer laws. Furthermore, the PESTEL analysis’s advantages are that it makes it possible to understand the business environment widely and allows for the exploitation of opportunities. Nonetheless, one of the disadvantages is that it can be time-consuming, and it can fail to keep up with some changing factors.
1.4 MOST Analysis
The fourth analysis tool is the MOST model that is also useful for internal analysis. The elements of this analysis are (M)ission, (O)bjectives, (S)trategies, and (T)actics. Generally, this analysis looks at whether the organization has adequately what they want to propel them, the requisite goals to realise the mission, the detailed plan, and how to realise it (Aithal, 2017, p. 40). The advantage of this tool is that it increases the organisation’s investment effectiveness. As for its disadvantage, it is difficult to use to examine the organisation’s external capability.
2.0 Preferred Combination of the Tools in Analysing Total
Total is a major player in the Energy, Oil, and Gas sector. It has operations in the UK and other countries. It is the number one provider of gas in the UK in terms of volume and has about 2627 employees in the UK (Total). The company has extensively invested in several businesses in the industry and has also made investments in the OGCI climate. Consequently, the company’s businesses include trading and shipping, marketing and services, chemicals and refining, power and gas, renewable energies, and exploration and production.
The combination of tools that best suits Total includes the 7-S model, SWOT, and PESTEL. First, the 7-S model can bolster the organization’s performance by looking at the interconnectedness of different elements such as leadership change and future changes impactful to the business (Alam, 2017, p. 1285). The Total company has, in the past, restructured itself through a leadership change and new systems and processes. The elements used in this tool, coupled with the capabilities and values, are useful in developing a corporate culture. Besides, the company has various strategies, such as operational, marketing, and corporate strategies, that require analysis. The company also has a structure that encompasses leadership structure that includes the CEO to other persons such as the CFO and other factors such as regional structures for different offices aimed at meeting local consumer needs. It allows the organization to centralise and decentralise some functions in local, regional, and international operationalisation. Also, every organization needs good directional, process, and daily management systems when it comes to systems.
An example of using the 7-S tool in analysis is that the Total UK has 2627 staff and is still founded on the staff’s values and visions. Because it has existed for several years, it always seeks to align its elements. An assumption can be made that the Total UK still relies on its traditional market and utilizes sophisticated systems, such as IT systems. If the organization were to go through a growth and increase the number of staff to about 5000 and has ventured into other markets, an analysis is necessary. This is because of new customers, new financial management, product development, technology, and marketing skills demand. A 7-S analysis is likely to reveal that there is no alignment between the elements, such as skills and sales strategy (Alam, 2017, p. 1280). Besides, the increase in the number of new staff means some lack the requisite systems skills, and they may lack clarity on the organization’s purpose and values. From the analysis, one can introduce learning and other programs that ensure the key elements align.
As for SWOT, it allows for the examination of the brand or company. Therefore, it allows Total as a brand to benchmark its performance and business in the industry and against competitors such as Chevron and Exxon Mobil. First, when it comes to strengths, one can look at its operations diversity, brand name, and globalisation of its operations (Sarsby, 2016). Second, weaknesses could arise from factors such as the controversies of an oil spill that affects the environment. Third, opportunities could arise from oil and gas prices, expansion in the global market, and an increase in demand. Lastly, threats could arise from increased competition, an increase in electric cars, and the tightening of government regulations.
While SWOT mainly shapes the competitiveness and 7-S primarily shapes corporate culture and strategy, other external factors such as macro-environmental factors can affect Total as an organization in the energy, oil, and gas sector. Such factors can influence the overall profitability or competitive advantage of the organization or the industry in general. Therefore, PESTEL analysis can provide more details on the challenges Total faces or may face in terms of operation (Yusop, 2018, p. 34). For example, instability in the political environment may negatively affect the growth of the company. The economic factors useful in this analysis include economic cycles, foreign exchange rate, interest rate, and inflation rate. Besides, other factors, such as industry growth rates, can act as indicators during the analysis.
Third, on social factors, the culture and other social aspects influence an organization’s culture depending on the environment. Fourth, technology disrupts various industries or sectors, and an organization must stay updated on new developments. Fifth, Total’s operations must be looked at in line with the environmental standards of different markets. Besides, environmental assessment tools can minimize environmental damage resulting from operations of an organization in the oil and gas industry. Some of the tools are Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (SEA) (Runhaar, 2016, p. 1). Lastly, the legal and institutional framework can determine the entitlements and obligations of the company. Therefore, considering that every market has a different legal and institutional framework, which continuously changes, they must be included in an organization’s analysis.