2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Leaders are often forced to make decisions not in accordance with the existing plan, but based on the current situation. This happens for various reasons. The main task of the manager is to analyze the situation, develop and adopt the most optimal course of action in solving the problems that have arisen.
What is this
Analysis of a situation is a way of processing information in which it is first divided into parts, and then carefully examine each element individually to find a problem and solve it. For example, the profit of an enterprise may decrease due to rising costs or due to a decrease in revenue, an increase in accounts receivable, and other factors. In order to determine which factor influenced the change in profit, it is necessary to study these factors.
Only after the cause is identified, the decision maker (DM) will be able to develop an action plan and solve the problem. In order to analyze the situation, the authorized person assembles a team of specialists who collate the data and conduct analyticalprocedures, each in their own area of expertise and skills.
Who does the analysis
Analysis of specific situations is carried out not by one person, but by several groups. They are led by a manager or a decision maker (DM). The team consists of:
- Experts of the first level. They collect and process primary information.
- Experts of the second level. Examine reports and develop ideas for solving the problem.
- Analytical group. Examines the ideas that the second level experts have developed and chooses the most realistic, from their point of view, options for the development of events. Analysts develop business strategies and problem solving strategies.
- The decision maker chooses from the proposed development strategy options the one that, in his opinion, is most suitable for solving problems in the current situation. He bears full responsibility for this.
Only a large company can afford to carry out large-scale work using several groups of specialists. In most cases, the head of the firm conducts an analysis of the situation with the involvement of one group - specialists from departments. The work of the second group and analysts is performed by people who are part of the company's management, accountants, marketers, and engineers. They gather for a business meeting, discuss the situation and look for solutions to problems.
Proceedings
The analysis begins with the identification of the deviation of the company's performance from the planned ones. For example, in the reporting quarter, a decrease in revenue by 30% was revealed, and the manager cannot explain the reasonsthis level of decline. In this case, he should assemble a group of experts and study the situation. The process consists of the following stages of situation analysis:
- Identification of deviation of indicators - identification of the problem.
- Organization of a group of experts by the leader.
- Assignment to each expert of a site for work.
- Collecting information by department.
- Experts process the received information using their specialized knowledge and skills.
- Preparation of progress reports by specialists.
- Study of these reports by the head, discussion at the general meeting of the content of the reports.
- Developing solutions to a problem and putting one or more into practice.
Preparation for the report and its presentation
Leaders are always busy with work, so they don't have time to read long lengthy reports. This suggests that the information in the report should be presented briefly, concisely and preferably in a visual and convenient way. It is better if, instead of hundreds of written pages and columns of numbers, the report contains graphs, diagrams, calculation results and the opinion of an expert who has conducted an analysis in a particular area. Naturally, the report should indicate the sources of information and the most important indicators that, in the opinion of the expert, caused the deviation in the company's work. Therefore, the technology of analyzing problematic situations should be worked out before such a situation arises. The company must have computers with special software forsolving similar problems.
The presentation of each report should not take more than 15 minutes so that the study and discussion of the results of the analysis of the situation does not drag on for several days. Reports must be factual and information must be current at the time of preparation and presentation.
What does the leader do with the information received
Getting the results of the analysis of the situation in the form of a report is only half the battle. Further, this information should be studied and analyzed by the head of the company. And here much depends on his knowledge and experience. At the same time, experience means not only his personal experience, but also how well he knows about how similar situations were resolved at other enterprises. The manager usually meets with other managers and experts, including those who have been involved in field analysis and reporting, before making a final decision.
What kinds of situations are there
Problem situations are standard and non-standard. To solve standard problems, managers use methods of situation analysis by analogy. That is, they compare the data they have on other enterprises with those that were obtained as a result of the study of their company. If the situations are similar, then they use the same methods to solve the problem.
If the situation is non-standard, apply the methods of analysis of specific situations. To do this, various computer programs are used to model possible development options, carry out calculations, study dynamics, etc. To do this, the manager can use special computer simulation programs based on the entered data. For example, Project Expert is used not only to develop business plans, but also to predict the work of existing enterprises.
The problem can be solved without the help of computer programs, but this will complicate the already complex calculations. In addition, experts will need to draw graphs and diagrams to prepare a report. It will take a lot of time. The manager may not use special software, but only in the case when modeling on a computer is impractical. For example, in case of force majeure, if you need to act quickly and the solution does not depend on the past state of affairs or dynamics. At the same time, the quantity and quality of the incoming information is not enough to build a model on a computer.
Brainstorming as a solution method
In difficult situations, when a manager needs an extraordinary solution to a complex problem, he can resort to using this method of analyzing a specific situation - to gather all the experts, heads of departments and arrange a "brainstorming". The essence of this method is that each participant in the meeting expresses his opinion about the possible cause of the problem and how to solve it. The right to express their opinions and ideas is given to everyone, while none of the participants should, according to the rules, be sarcastic about the opinion of the other.
It is natural that the discussion of the problem should take place within the framework of business etiquette andsign up. However, the decision is still made by the head or the person appointed for this. As a result of the brainstorming, the manager will receive several valuable ideas at once. Such an analysis has both advantages and disadvantages. The main pluses are speed and a large number of options, the minus is that such an analysis of the situation does not always reflect the real state of affairs and often suffers from a lack of objectivity.
Problems of event modeling
The main problem of case analysis technology is that experts have to work with large amounts of information, which can cause errors. Large amounts of data that need to be processed in a short time also pose a problem in modeling the development of events. Either the analysis will take much longer and the result will lose relevance, or due to the limited amount of information, the results of the analysis will be obtained with a high degree of distortion. As a result, the model may be at best inefficient, at worst - lead to bankruptcy.
Three main factors influence the effectiveness of the analysis. These are the qualifications of the expert, the amount of information that he can process, and the time available to analyze the situation.
SWOT analysis
SWOT-analysis is the study and assessment of the strengths and weaknesses of the enterprise, as well as its opportunities for development and the threats that it faces or may face. Below is a matrix for conducting a SWOT analysis.
The upper left cell indicates the strengths and opportunities that the company has and which were identified during the monitoring and at the first stage of the situation analysis. An example would be a situation where it became known that a company has a monopoly position in the market for the production of certain products, and due to a certain technology that it has, it can produce it even cheaper. The analysis will help to identify what kind of product it is before competitors enter the market.
The top right cell indicates strengths and threats. For example, for some of the firm's basic products from which it makes the most profit, several competitive firms have emerged that produce similar products and sell them cheaper.
The bottom left cell lists the disadvantages and opportunities of the enterprise. For example, despite the high cost, the product manufactured by the company is in demand.
The bottom right cell indicates weaknesses and threats. The first may be the high cost of products or their low quality, and as threats - the actions of competitors or the solvency of consumers. What a SWOT analysis looks like can be seen in the table above.
The advantage of SWOT analysis when analyzing and assessing the situation is that it makes it possible to assess not only internal, but also external factors, which can be even more significant than internal ones.
Factor analysis
Factor analysis is a situation analysis method that involves making calculations based ondata on the operation of the enterprise and the construction of a multifactorial model of the current state and further development of the enterprise. Typically, this method is used in assessing the financial condition of the company. Indicators such as liquidity, profitability, financial strength and the probability of bankruptcy are calculated.
Case analysis
This is a method of analysis when, after reading reports on the current state of the enterprise, the participants of the meeting are divided into groups and disperse for a group discussion of the information received. After that, they meet again, and each group brings their ideas to the public discussion.
Average group size is three to seven people. They can express their ideas both at the general meeting and directly to the person who must make the decision. A case analysis includes a description of the problem, its comparison with similar cases, and a solution. That is, the groups should tell how they see the situation, what it looks like to them, and what steps should be taken to solve the problem.
Evaluation of the obtained results
After carrying out the activities developed as a result of the analysis of the situation, it becomes necessary to evaluate these results, that is, re-analysis. Only in this case, it is not the state of the enterprise that is checked, but the effect after the solutions have been implemented in practice. To do this, use the method of comparing what was before and after the changes.
The role of analysis in the work of the company
Without regular analysis of the situation physicallynormal development of the enterprise is impossible. The manager should always be aware of what is happening and be able to determine not only the state of the company, but also what are the prospects for its development. It helps not only to find out what are the shortcomings in the work of the enterprise, but also to identify external threats and opportunities to increase its competitiveness and development. However, this must be done quickly and at minimal cost. Prompt analysis makes it possible to maintain the company's financial stability, identify existing shortcomings in the work and find reserves for their elimination. In the future, the manager will be able to use the benefits that give him the experience and knowledge gained as a result of work.
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