The starting point for an organization review is an analysis of the existing circumstances, structure and processes of the organization and an assessment of the strategic issues that might affect it in the future.
The external environment
The economic, market, competitive, social and legal matters that may affect the organization. Plans for product-market development will be significant.
The internal environment
The mission, values, organization climate, management style, technology and processes of the organization as they affect the way it functions and should be structured to carry out its function. Technological developments may be particularly important, as well as the introduction of new processes such as just-in-time or the development of an entirely new computer system.
Strategic issues and objectives
As a background to the study it is necessary to identify the strategic issues facing the organization and its objectives. These may be considered under such headings as growth, competition and market position and standing. Issues concerning the availability of the required human, financial and physical resources would also have to be considered.
Activities
Activity analysis establishes what work is done and what needs to be done in the organization to achieve its objectives within its environment. The analysis should cover what is and is not being done, who is doing it and where, and how much is being done. An answer is necessary to the key questions: are all the activities required properly catered for? Are there any unnecessary activities being carried out, i.e. those that do not need to be done at all or those that could be conducted more economically and efficiently by external contractors or providers?
Structure
The analysis of structure covers how activities are grouped together, the number of levels in the hierarchy, the extent to which authority is decentralized to divisions and strategic business units, where functions such as finance, HR and research and development are placed in the structure and the relationships that exist between different units and functions (with particular attention being given to the way in which they communicate and cooperate with one another). Attention would be paid to such issues as the logic of the way in which activities are grouped and decentralized, the span of control of managers, any overlap between functions or gaps leading to the neglect of certain activities, and the existence of unnecessary departments, units, functions or layers of management.
