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Management Science

Unit-1
Introduction Management Science
The concept of management and organisation:
Management may be defined as the art of
getting work done through people, with satisfaction for
employer, employee and public.

For getting work done through the effort of


people, it is necessary to guide, direct, coordinate and
control human effort towards the fulfilment of the
goals of the enterprise.

The goals of enterprise are full filled through the


use of resources like men, money, material and
machines.
Definition
Management if social process of planning,
organising, , coordinating and controlling the available
resources and using them in an effective and efficient
way in order to achieve the organisation goals by
working with and through people.
The management process is a process of
activities which can be divide into four distinct (but
integrated) activities.
• Planning – Deciding what is to be done.
• Organising - Deciding how it is to be done and
who will do it.
• Leading - Influencing behaviour.
• Controlling – To make sure that plans are carried out

Manager should be efficiently utilise the resources


such as physical, financial, human and information in
achieving organization goals.
planning, organising,
leading and controlling
Physical
Inputs from environment

Financial
Goals

Human

Information

Efficiency & Effective ness


Administration
• Any enterprise where it is running for profit or not, need
to be control. The control of the enterprise is effected
through administration and management.

• Administration is consist of deciding determination of


goals and policies of enterprise

• Administration makes policies and decides the


goals/targets to be achieved. It is not directly concerned
with the implementation of policies.
Organisation
• Organisation is the frame work of management.

• Organisation is the function of putting together the


different parts of an enterprise into working order.

• Organisation is a system, it is a group of persons. It is a


structure of relation ships among the individuals
working together for a common goal.

• Organisation is concerned with the building,


developing, and maintaining of a structure of working
relationships in order to accomplish the objectives of
enterprise.
Difference between
Management, administration and organisation
• Administration determines the objectives and polices
of enterprise, management carries out these policies
to achieve objectives of enterprise.

• For administration and management to function


effectively, there must be proper structuring of the
enterprise and this is known as organisation
(structure)
Difference between
Management, administration and organisation
• Administration gives proper direction - it is a
directing function.

• Management properly executes- it is an executive


function

• Organisation is an effective machinery (structure) for


accomplish company objectives in a team spirit.

Management carries out the policies of administration


through the framework of the organisation
Nature and importance of management

Objectives:
• To obtained maximum output from minimum inputs,
efforts and resources
• Increasing the efficiency of factors of production and
intern productivity and minimizing wastage.
• Profit maximising i.e. aiming at producing highest profit
with the least internal cost.
• It also aims at satisfying employees by providing
adequate remuneration and other benefits as well as.
• Raising the standard of living and social justices to all
people through uniform policies.
Characteristics
Management is..

Goal oriented: It achieves the organizational goals through the


coordination of the efforts of the personal.
Universal Process: It is not only applicable for process but also
universal applications. The can applied to social, religious,
charitable and non-profitable organization.
Multi disciplinary subject: It takes the concepts from other
disciplines such as engineering, psychology, sociology,
anthropology, mathematics etc. and uses them in managing
organization.
Distinct Process: It comprises of functions, such as planning,
coordinating, organizing, staffing and controlling.
A Unifying force: It integrates human and other resources to
achieve the desired objectives
Importance of management
Effective Utilization of resources:
• Truly speaking, no enterprise can survive without
management, even if it possesses huge money, excellent
machinery and expert man power, because without
management, it creates confusion and nobody will know
what to do and when to do.
• Management tries to make effective use of resources
such as men, material, money and machinery.
Continuity in the organization:
• Continuity is most important in the organization where
there is no proper guideline for decision making continuity
can not guaranteed.
• Joining of new people, retirement of the people and
leaving the people from the organization etc.
Development of the resources:
• Management provides new ideas and vision to the
organization to do better.
• Management coordinates activities of deferent
departments in an enterprise and establish team-spirit
among the persons.

Integrating various interest groups:


• In the organised efforts, there are various interest groups
and the put pressure over the other group for maximum
share in the combined output.
• Management tackles business problems and provides a
tool for the best way of doing things
Stability in the society:
• Management provides stability to the enterprise by
changing and modifying the resources in accordance with
the change in the environment of the society.

• Management provides integration between tradition and


new invention, and safe guard society from the
unfavourable impact of these invention so that continuity
in the social process is maintained.
Functions of management
• To achieve the organization objective, managers at all
levels of organization should perform different
functions. A functions is a group of similar activities.
1. Forecasting
2. Planning
3. Organising
4. Staffing
5. Directing
6. Coordinating
7. Controlling
8. Decision making
Level of Management

Chief Executives

Departmental Heads

Supervisors

Management pyramid
Level of Management
Top Management:
It includes chief executives, board of directors,
managing directors, General managers, owners etc.
Functions:
• Monitoring the performance of middle level
managers
• Major policy decision making
• Basic organisation structure may be designed or re-
designed if necessary.
• The Employees are adequately motivated to strive
for meeting organizational objectives
• Issuing orders to lower levels
Middle level Management:
• It includes departmental managers, financial
managers, sales managers, production managers,
superintends and branch managers etc..
Functions:
• Responsible for carrying out the decisions and
policies made by the top level management.
• Managers plan, organise direct and control for
activities within their respective departments only.
• Selecting the staff of low level management
• Conducting training for employee development
• Assigning duties to their subordinates.
Lower level Management:
• It also called as operational level management which
includes foremen, supervisors, deputy superintend
and inspectors etc.
Functions:
• People at this level supervise the workers and their
work
• Developing and improving work methods and
operations.
• To solve the problems of the workers and
communicates their feelings to the top management.
• To evaluate the performance periodically and report
to the middle level management.
EVOLUTION OF MANAGEMENT THOUGHT
EVOLUTION OF MANAGEMENT THOUGHT
 Management practice is old as human civilization when people
started living together in groups
 Egypt,
 Roman
 Chinese
 Indian
 England
 Robert Owen
 Charles Babbage
 James Watt
 Robinson Boulton
 F.W. Taylor
 Henry Fayol
• 20th century is marked in history as an “Era of scientific
management” yet it doesn't mean that management was
totally absent in previous years.
• Management practiced as old as human civilization when
the people started living together in groups.
• The Egypt people used the management functions of
planning, organising and controlling when the constructed
the great pyramids.
• The roman empire developed a well defined organization
structure that greatly facilitated communication and
control.
• The serious study of management did not begin until the
19th century.
• The ancient Chinese philosophers recognised the need for
methodological means of employee selection and staffing.

• The Indian philosopher Kautilya (also called as Vishnu


Gupta) implemented the subjects such as organization and
management of trade and commerce, law and law courts,
municipal government, taxation and revenue, agriculture
and factories.

• England entered a period referred to as industrial


revolution in 1750. Replacement of human and animal
power by machines, new inventions, expansion of
commercial under takings etc. are carried out during this
period.
Robert owen:
• He is the first person who believed that worker’s
performance was influenced by the shop floor
• working conditions,
• working hour ,
• housing facility,
• training of workers,
• provision of canteen,
• rest places,
• kind treatment etc.
• If the better environment is provided then increased
output can be expected from the workers.
Charles babbage:
• He is an English mathematician focused his attention on
efficiency of production.

• He advocated the use of mathematics and science,


investigation and accurate data to run the factories which
were, at that time, using that traditional methods,
opinions and rule of thumb.

• He also suggested that division of worker into mental and


physical efforts, determining precise cost for every process,
paying off bonus, profit sharing etc. he invented the
computer for making the things faster.
James watt Jr. and Robinson Boulton:
• He used several management techniques such as
• Forecasting,
• Market research,
• Planed machine layout,
• Production planning,
• Standardisation of parts,
• Welfare of workers etc.
Robert owen, charles babbage, james watt jr and
boulton were pioneers of management, but their impact on
industry as a whole was meagre.

After 19th century, F.W taylor, Henri fayol, HL Gannt,


Emerson, Gilberth etc., has major contribution towards
management development.
Contribution of F.W. Taylor
Contribution of F.W. Taylor
• F.W Taylor is considered as “father of scientific
management”
• Scientific management is concerned with improving
productivity by improving the performance standard of
Individual workers
• Primarily concentrated with efficiency of the worker and
proper utilization of machines to reduce the wastage.
• “Scientific management is concerned with knowing exactly
what you want to do and then see in that they do it in the
best and cheapest way”
• Published books and papers on shop management, piece
rate system and principles of management.
• Scientific management theory assumed that the
industrial efficiency can be improved through the
application of method of science and payment of higher
wages for higher productivity.
• Also advocate that standardization of working conditions,
working methods, time and motion study etc., can
promote industrial efficiency
• He developed the principle of breaking a task (JOB) into
elements for timing the same.
Basic steps in scientific management suggested by FW Taylors
ELEMENTS AND TOOLS OF SCIENTIFIC
MANAGEMENT
ELEMENTS AND TOOLS OF SCIENTIFIC
MANAGEMENT
 Job Analysis: It is useful to find out the one best way of doing the
things. The best way of doing a job is one which requires the least
movements, consequently less time and cost.
 Time study involves the determination of time a movement takes to
complete.
 Motion study involves the study of movements in parts which are
involved in doing a job and thereby eliminating the wasteful
movements.
 Fatigue study shows the amount and frequency of rest required in
completing the work.
Thus, job analysis identifies the fair amount of a day’s work requiring
certain movements and rest periods to complete it.
ELEMENTS AND TOOLS OF SCIENTIFIC
MANAGEMENT
 Standardization: Standardization should be maintained in
respect of instruments and tools, period of work, amount of
work, working conditions, cost of production etc.,. These things
should be fixed in advance on the basis of job analysis and
various elements of costs that in performing a work.
 Scientific selection and training of workers: Taylor has
suggested that workers should be selected on scientific basis
taking into account their education, work experience, aptitude,
physical strength, etc., Apart from selection, proper training
should be provided to workers to make them more effective and
efficient.
Financial Incentives: Financial incentives can motivate
workers to put in their maximum efforts. If provisions exist to
earn higher wages by putting in extra effort, workers will be
motivated to earn more..
Economy: The economy and profit can be achieved by
making the resources more productive as well as by
eliminating the wastages.
Mental Revolution: Scientific management depends on the
mutual co-operation between management and workers. For
this co-operation, there should be mental change in both
parties from conflict to cooperation.
PRINCIPLES OF SCIENTIFIC MANAGEMENT
Contribution of Henri Fayol

• Henri is considered as the father of “Principle of


management” or “Administrative management”
• In 1860, he joined as n engineer in famous French
combined company in the mining and metallurgical field.
• After 2 years, he was promoted as a manager and
continued for 22 years.
• In 1888, the condition of the French combined company
is difficulty to survive due to heavy losses.
• At this time, this Fayol was appointed as general manage.
• Up to the retirement of Fayol, the company position was
strong in financially and also long record of profits.
• Henri Fayol has given 14 principle management
 Division of work:
• It is helpful to take the advantage of specialization.
• Here, the work is divided among the members of the group
based on the employees skills and talents.
• It can be applied at all levels of the organization.
 Authority and Responsibility:
• Responsibility and authority should be go together, hand –in-
hand and must be related.
• Any manager can do justice only when he has given proper
authority. Responsibility arises out of the assignment of
authority
• Responsibility without authority or vice versa is meaning less.
 Discipline: All the personal serving in an organization
should be disciplined. Discipline is obedience,
application, behavior and outward mark of respect
shown by employees.
 Unity of Command: Unity of command means that a
person should get orders from only one superior. Fayol
has considered unity of command as an important
aspect in managing an organization. He says that
“should it be violated, authority is undermined,
discipline is in jeopardy, order disturbed, and stability
threatened.”
 Unity of Direction: According to this principle, each group
of activities with the same objective must have one head
and one plan. Unity of direction provides better
coordination among various activities to be undertaken by
an organization.
 Subordination of individual interest to general interest:
Individual interest must be subordinate to general interest
when there is conflict between the two. However factors
like ambition, laziness, weakness, etc., tend to reduce the
importance of general interest. Therefore, superiors should
set an example in fairness and goodness.
 Remuneration to Personnel: Remuneration to
employees should be fair and provide maximum possible
satisfaction to employees and employers. Fayol did not
favor profit sharing plan for workers but advocated it for
managers. He was also in favor of non-financial benefits.
 Centralization: Everything which goes to increase the
importance of subordinate’s role is decentralization; every
thing which goes to reduce it is centralization. The degree
of centralization or decentralization is determined by the
needs of the company.
 Scalar Chain: There should be a scalar chain of authority and
of communication ranging from the highest to the lowest. It
suggests that each communication going up or coming down
must flow through each position in the line of authority. It can
be short-circuited only in special circumstances. For this
purpose, Fayol has suggested ‘gang plank’ Scalar chain

 Order: This is a principle relating to the arrangement of things


and people. In material order, there should be a place for every
thing and every thing should be in its place. Similarly, in social
order, there should be the right man in the right place.
 Equity: Equity is the combination of justice and
kindness. Equity in treatment and behavior is liked by
everyone and it brings loyalty in the organization. The
application of equity requires good sense, experience and
good nature.

 Stability of tenure: No employee should be removed


within short time. There should be reasonable security of
jobs. Stability of tenure is essential to get an employee
accustomed to new work and succeeding in doing it well
 Initiative: Within the limits of authority and discipline,
managers should encourage their employees for taking
initiative. Initiative is concerned with thinking out and
execution of a plan. Initiative increases zeal and energy
on the part of human beings.
 Esprit de corps: It is the principle of ‘union is
strength’ and extension of unity of command for
establishing team work. The manager should encourage
esprit de corps among his employees.
SYSTEM APPROACH TO MANAGEMENT
 A system is a set of interrelated but separate parts working
towards a common purpose.
 The arrangement must be orderly and there must be proper
communication facilitating interaction between the elements
and finally this interaction should lead to achieve a common
goal.
 System approach to management views the organization as a
unified, purposeful system composed of interrelated parts.
 This approach also gives the manager to see the
organization as a whole and as a part of the larger external
environment.

 System oriented manager would make decisions only


after they have identified impact of these decisions on all
other departments and the entire organization.

 They must intertwine their department with the total


organization and communicate with all other departments,
employees and with each other.
SYSTEM APPROACH TO MANAGEMENT

Finance
Department

Human
Production Resource
Department Department

Marketing
Department
External Environment

Managerial
Knowledge, Goals,
Inputs
R C
E O
Planning
E M
N M
G Organizing U External

I N Environment:

N Staffing I Opportunities

E C Threats

E A
Leading
R T
I I
N Controlling O
G N

Output

External Environment
FEATURES OF SYSTEM APPROACH

Dynamic

Social
Interdependent
System

Features
Integrated Open system

Multivariable Adaptive
ADVANTAGES OF SYSTEM APPROACH

• It aims at meaningful analysis of organizations and their

management.

• It facilitates the interaction between organization and its

environment.

• It guide manager to avoid analyzing problems in isolation

and to develop an integrated approach.


MANAGERIAL SKILLS

 Conceptual skills

The ability to analyze and diagnose a situation and


distinguish between cause and effect.

• Decision making skill

• Organizing skill
 Human skills

The ability to understand, alter, lead, and control the


behavior of other individuals and groups.

• Communicating skill

• Motivating skill

 Technical skills

The specific knowledge and techniques required to


perform an organizational role.
MANAGERIAL SKILLS
CORPORATE PLANNING

 Corporate planning is defined as the process of


formulating the corporation mission, scanning the
business environment, evolving strategies, creating
necessary infrastructure, and assigning resources
to achieve the given mission.
CORPORATE PLANNING
ELEMENTS OF CORPORATE PLANNING
1. Identify the Corporate mission
2. Formulate strategic objectives
3. Appraising internal and external environment
4. Developing and evaluating alternative strategies
5. Selecting the best strategy
6. Fixing key targets to Strategic Business Units (SBUs)
7. Allot resources to each SBU
8. Developing operating plans
9. Monitoring the performance
10. Revising the plans where necessary
Identify the Corporate mission

Formulate strategic objectives

Appraising internal and external environment

Developing and evaluating alternative strategies


Feedback

Selecting the best strategy

Fixing key targets to Strategic Business Units (SBUs)

Allot resources to each SBU

Developing operating plans

Monitoring the performance

Revising the plans where necessary


NATURE & COMPONENTS OF
ENVIRONMENTAL SCANNING
WHAT IS ENVIRONMENTAL SCANNING?

Environmental Scanning:
 A term coined in the mid-1960’s by Francis Aguilar, a Harvard
Business School professor, to describe the action of watching
and collecting information on a company’s rivals and the overall
market.
 A process of gathering, analyzing, and dispensing information
for tactical or strategic purposes. The environmental scanning
process entails obtaining both factual and subjective information
on the business environments in which a company is operating
or consider entering.
Common part of strategic analysis.

Environmental Internal elements & external elements.


Scanning
All are interrelated.
FACTORS AFFECTING ENVIRONMENTAL
SCANNING

External Internal
Environment Environment

Infrastructure
Events
HR
Trends
Hardware
Issues
Abilities
Expectations
Structure
THREE APPROACHES TO ENVIRONMENTAL
SCANNING
Kubr has suggested three approaches to scanning

 Systematic: Information related to markets & customers,


changes in legislation & regulations that have a direct impact
on organization’s activities that could be collected
continuously to monitor changes.

 Ad-hoc: Conduction of special surveys & studies to deal


with specific environmental issues.

 Processed form: Information available from different


sources both internal & external of the organization in
processed form.
SOURCES OF INFORMATION

Secondary
sources

Spying & Mass


Surveillance media

Formal Internal
studies sources

External
agencies
ONE CYCLE IN THE STRATEGIC PLANNING PROCESS
WHAT SCANNING CAN ACCOMPLISH?

 It helps an organization capitalize on early opportunities rather than lose these to


competitors.
 It provides an early signal of impending problems, which can be defused if
recognized well in advance.
 It sensitizes an organization to the changing needs and wishes of its customers.
 It provides a base of objective qualitative information about the environment that
strategists can utilize.
 It provides intellectual stimulation to strategists in their decision making.
 It improves the image of the organization with its publics by showing that it is
sensitive to its environment and responsive to it.
 It is a means of continuing broad-based education for executives, especially for
strategy developers.
PEST ANALYSIS: AN ENVIRONMENTAL SCAN FOR
BUSINESS

Micro Environment

Macro
Environment
COMPONENTS OF MICRO ENVIRONMENT
COMPONENTS OF MACRO ENVIRONMENT
SCIENTIFIC METHOD
RESPONSES
When an issue is detected, there are generally six ways of
responding to them:
 Opposition strategy - try to influence the environmental forces
so as to negate their impact - this is only successful where you
have some control over the environmental variable in question .
 Adaptation strategy - adapt your marketing plan to the new
environmental conditions .
 Offensive strategy - try to turn the new influence into an
advantage - quick response can give you a competitive
advantage .
 Redeployment strategy - redeploy your assets into another
industry .
 Contingency strategy - determine a broad range of possible
reactions - find substitutes .
 Passive strategy - no response - study the situation further .
LEARNING OBJECTIVES

 What is SWOT analysis?


 Aim of SWOT analysis.
 Who need SWOT analysis?
 How to conduct SWOT analysis?
 Pitfalls of SWOT analysis.
 Tips for SWOT analysis.
WHAT IS SWOT ANALYSIS
 A technique that enables a group or individual to move from
everyday problems and traditional strategies to a fresh
prospective.

 SWOT analysis looks at your strengths and weaknesses, and the


opportunities and threats your business faces.

 The SWOT Analysis framework is a very important and useful


tool to use in marketing Management and other business
applications

 As a basic tool its mastery is a fundamental requirement for the


marketer, entrepreneur or business person.

 A clear understanding of SWOT is required for business majors.


WHAT IS SWOT ANALYSIS
Technique is credited to Albert
Humphrey who led a research project
at Stanford University in the 1960s and
Strengths 1970s.

Planning tool used to


understand Strengths,

Oppurtunity
SWOT Weakness
Weaknesses, Opportunities,

Analysis & Threats involved in a


project / business.

Used as framework for organizing

Threats and using data and information gained


from situation analysis of internal and
external environment.
SWOT IS AN ACRONYM FOR
WHAT IS SWOT ANALYSIS

STRENGTHS
Characteristics of the business or a
team that give it an advantage over
others in the industry.
Positive tangible and intangible
attributes, internal to an
organization.
Beneficial aspects of the
organization or the capabilities of
an organization, process
capabilities, financial resources,
products and services, customer
goodwill and brand loyalty.
Examples - Abundant financial
resources, Well-known brand name,
Economies of scale, Lower costs [raw
materials or processes], Superior
management talent, Better marketing
skills, Good distribution skills,
Committed employees.
WHAT IS SWOT ANALYSIS

WEAKNESSES
Characteristics that place the firm at a
disadvantage relative to others.

Detract the organization from its


ability to attain the core goal and
influence its growth.
Weaknesses are the factors which
do not meet the standards we feel
they should meet. However,
weaknesses are controllable.
They must be minimized and
eliminated.
Examples - Limited financial
resources, Weak spending on R & D,
Very narrow product line, Limited
distribution, Higher costs, Out-of-
date products / technology, Weak
market image, Poor marketing skills,
Limited management skills, Under-
trained employees.
WHAT IS SWOT ANALYSIS

OPPORTUNITIES
Chances to make greater profits in the
environment - External attractive
factors that represent the reason for
an organization to exist & develop.

Arise when an organization can


take benefit of conditions in its
environment to plan and execute
strategies that enable it to become
more profitable.
Organization should be careful and
recognize the opportunities and
grasp them whenever they arise..
Examples - Rapid market growth,
Rival firms are complacent,
Changing customer needs/tastes, New
uses for product discovered,
Economic boom, Government
deregulation, Sales decline for a
substitute product .
WHAT IS SWOT ANALYSIS
THREATS
External elements in the environment
that could cause trouble for the
business - External factors, beyond an
organization’s control. !
Arise when conditions in external
environment jeopardize the
reliability and profitability of the
organization’s business.
Compound the vulnerability when
they relate to the weaknesses.
Threats are uncontrollable. When a
threat comes, the stability and
survival can be at stake.
Examples - Entry of foreign
competitors, Introduction of new
substitute products, Product life cycle
in decline, Changing customer
needs/tastes, Rival firms adopt new
strategies, Increased government
regulation, Economic downturn.
AIM OF SWOT ANALYSIS
AIM OF SWOT ANALYSIS

To help decision makers


share and compare ideas.

To bring a clearer
common purpose and
S W understanding
factors for success.
of

To organize the
important factors
linked to success and
failure in the business
world.

O T To provide linearity to
the decision making
process allowing
complex ideas to be
presented
systematically.
WHO NEEDS SWOT ANALYSIS

• When the team has not met its


targets
• Customer service can be better
• Launching a new business unit to
2 pursue a new business
• New team leader is appointed

Business Unit

Job Holder Company


• When supervisor has issues with • When revenue, cost & expense
work output targets are not being achieved
1 • Assigned to a new job 3 • Market share is declining
• New financial year – fresh targets • Industry conditions are
• Job holder seeks to improve unfavorable
performance on the job • Launching a new business
venture
WHO NEEDS SWOT ANALYSIS
SWOT Analysis is also
required for / during...
Changing Jobs
Product Launch

Decision
Making
Personal Development
Planning
Competitor
Evaluation
Product
Strategic Evaluation
Planning Brainstorming
Workshop Meetings
Sessions
HOW TO CONDUCT SWOT ANALYSIS?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans


External & Document
Environment
HOW TO CONDUCT SWOT ANALYSIS?
1. Analyse Internal & External Environment

.
HOW TO CONDUCT SWOT ANALYSIS?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans


External Environment & Document
HOW TO CONDUCT SWOT ANALYSIS?
2. Perform SWOT Analysis & Document

Carry your findings forward - Make sure that the


SWOT analysis is used in subsequent planning.
Revisit your findings at suitable time intervals.

Evaluate listed ideas against


Objectives - With the lists
compiled, sort and group facts and
ideas in relation to the objectives. List Strengths,
Weaknesses,
Opportunities, &
Create a workshop
threats
environment - Encourage an
atmosphere conducive to the
free flow of information. Allocate research & information
gathering tasks - Background preparation
Select contributors - can be carried out in two stages –
Expert opinion may be Exploratory and Detailed. Information on
required for SWOT Strengths & Weaknesses should focus on the
internal factors.
Establish the objectives - Purpose of
conducting a SWOT may be wide /
narrow, general / specific.
HOW TO CONDUCT SWOT ANALYSIS?

1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans


External Environment & Document
HOW TO CONDUCT SWOT ANALYSIS?

3. Prepare Action Plan


Once the SWOT analysis has been completed, mark each point with:

Things that MUST be addressed immediately

Things that can be handled now

Things that should be researched further

Things that should be planned for the future


PITFALLS OF SWOT ANALYSIS

Can be very subjective. Two people rarely come up with the same final
version of a SWOT. Use it as a guide and not as a prescription.

May cause organizations to view circumstances as very simple due to


which certain key strategic contact may be overlooked.

Categorizing aspects as strengths, weaknesses, opportunities & threats


might be very subjective as there is great degree of uncertainty in market.

To be effective, SWOT needs to be conducted regularly. The pace of


change makes it difficult to anticipate developments.

The data used in the analysis may be based on assumptions that


subsequently prove to be unfounded [good and bad].

It lacks detailed structure, so key elements may get missed.

.
TIPS
Do’s Don’ts
 Be analytical and specific. х Try to disguise weaknesses.
 Record all thoughts and ideas. х Merely list errors and mistakes.
 Be selective in the final evaluation. х Lose sight of external influences and
 Choose the right people for the trends.
exercise. х Allow the SWOT to become a blame-
 Choose a suitable SWOT leader or laying exercise.
facilitator. х Ignore the outcomes at later stages of
 Think out of the box the planning process.
 Be open to change