Four Models of the Strategic Management Analysis for Management Reform in the United Nations - Essay Example

Strategic Management Analysis of the United Nations This paper is a summary of the application of four models of strategic management analysis to management reform at the United Nations, also known as the U.N., an international organisation founded in 1945 to address a complex mix of global issues related to the interest of its 192 member states (U.N., 2010a). To achieve its objectives, the U.N.’s complex structure includes six principal organs, 15 agencies and several programmes and bodies (U.N., 2010b). The management team that runs the U.N. bureaucracy is the Secretariat, one of six principal organs established by U.N. Charter. Within the Secretariat is the Chief Executive Board for Coordination (CEB) with three management teams responsible for coordination and cooperation on a wide range of administrative issues facing the U.N. System: the High-Level Committee on Management (HLCM), the High-Level Committee on Programmes (HLCP), and the Development Group (DG). The CEB is the target client for this strategic analysis exercise, which objective is to give strategic planning inputs that would help address the challenge of improving the management system at the U.N. using four models of strategic analysis: SWOT and PESTLE, Porter’s Five Forces Analysis, and Norton and Kaplan’s Balanced Scorecard. The results are summarised in Tables 2 to 5. Public and Private Organisations Whilst most strategic analysis models have been developed for private for-profit firms, these can be adapted for use in public non-profit organisations such as the U.N. And whilst there are similarities in these two organisational types, there are key differences, both internal and external, that affect the corporate culture and how each type of organisation is managed. As a public non-profit institution, the U.N. has two sets of customers: what can be called its direct customers (e.g., the poor, refugees, victims of terrorism, etc.) and the funders (member states, firms, and NGOs, etc.) that allow the U.N. to serve its direct customers who cannot afford to pay for these services. Table 1 summarises these differences. Table 1: Comparison of Private and Public Organisations Private sector Public sector Organising principles Pursuit of profit, stability, or growth of revenues Enactment of public policies Organisational structures Firms of many sizes with options for new entrants Complex system of organisations with various, at times conflicting, tasks Performance Metrics Return on investment; now: social responsibility, environment, ethics Multiple performance indicators and targets Management issues Considerable autonomy, restrained by shareholders, governance codes, financial constraints, rewards successful managers generously Managers under high level of public and political scrutiny. Successful managers receive less rewards and benefits. Relations with end-users Consumer or industrial markets, firms vary in intimacy of links with end-users, extensive market feedback General public as end-users, traditionally seen as citizens Supply chains Most firms part of one or more supply chains, with larger firms organising these chains Typically dependent on private suppliers and is a very important market for many firms Employees Varied nature, fractious relations with management, low in loyalty, customer-centric approach, mainly motivated by financial gain Highly unionised, concerned with status and salary, mostly idealistic and service-orientated Time Horizon Short-term for most, long-term for utilities and infrastructure services Short-term: policy initiated and implemented within election periods Source: Miles (2004) SWOT and PESTLE These two models analyse the internal and external environments of the U.N. The SWOT looks inwards to find out the organisation’s Strengths and Weaknesses and looks outwards to discover its Opportunities and Threats. A PESTLE analysis looks at the Political, Economic, Social, Technological, Legal and Environmental factors that would affect the U.N. positively or negatively. Table 2 summarises the SWOT Analysis and Table 3 summarises the PESTLE Analysis, subdivided into good and bad aspects of each factor. Table 2: SWOT Analysis Strengths History and past accomplishments as a service organisation Global Prestige and political clout Global reach Recent political will for internal reforms Quality, motivated human resources Multicultural and multidisciplinary approach to solving problem issues Weaknesses Large bureaucracy can be unwieldy Cultural variety of staff and clients has to be managed properly Difficulty in measuring performance Expensive to maintain high quality staff Lack of political power without support from superpowers (e.g., Iraq 2003) Possible lack of focus: too many problems Opportunities Global economic crises Improvements in transparency, public trust and accountability Need for customer-centred strategies Rise of rich funding NGOs (e.g. Gates) Worsening global peace and order Emerging nations (China) willing to fund Natural calamities are increasing Potential to address complex health issues Crisis always begets opportunities Threats Rise of powerful NGOs as competitors Funding problems due to global crisis Opposition from funding member-states Increased opposition from public critics Erosion of public trust due to past failures UN as target of violence: safety of staff Table 3: PESTLE Analysis Good Bad Political Member-states have a selfish interest to make UN succeed, so they will cooperate if action plans are for the common good Well-connected with political leaders Many of its solutions are not popular with politicians Intense public scrutiny look for the most trivial faults Economic Global Crisis leads to opportunities to perform a service Global crisis leads to funding problems Increasing costs and need for efficiency Social Increased and improved acceptance of UN UN helps solve global social problems like human rights violations and terrorism Global acceptance of UN services People who don’t like the UN threaten its staff, projects and programmes Attitudes by some sectors who see UN as a tool of the West (EU & US) Technological Technological advances in communication and social services can improve efficiency Many customers are not technologically progressive Legal UN staff have diplomatic immunity UN Charter, Conventions, etc. are globally accepted by majority of 192 member-states Diplomatic immunity abused by staff Complex legal institutions in 192 member states not easy to work with Environmental Addressing environmental concerns Increasing opportunities due to global warming and other similar issues Poor acceptance in Third World of some UN policies on environmental protection UN seen as tool of Western companies Porter’s Forces Analysis Porter (1980) analysed five competitive forces to develop strategy: bargaining power of buyers and suppliers, threat of substitutes, intensity of rivalry and threat of new entrants. Based on the analysis, Porter suggests choosing one of three generic strategies: cost leadership, differentiation or focus. Table 4 summarises the results of these analyses. Table 4: Porter’s Five Forces Analysis Bargaining Power of Buyers Growing power of funders who want more accountability and transparency in use of resources Direct buyers or customers have low power, but may decide not to accept UN services (e.g., family planning) Bargaining Power of Suppliers Growing power of emerging and powerful nation-states who want a say in the UN decisions (e.g., Security Council) Move towards cost efficiency and effectiveness has a limiting effect on the bargaining power of suppliers Threat of Substitutes Only viable substitutes are those offered by rich governments and NGOs backed by rich and profitable corporations A high-level threat is for governments to do nothing as a substitute for action, as had been done in Sudan, Tibet, etc. Intensity of Rivalry Highly intense rivalry for corporate funding for similar services UN has competitive advantage in some services such as peacekeeping, refugee processing, etc. Threats of New Entrants Low threat of new entrants in a field where 192 member states have a say High threat in services such as health care, public security, education, etc. Which of three generic strategies could the U.N. adopt? It may decide on cost leadership, as a service to funders (it will be cheaper for the U.N. to utilise its existing global network), or on differentiation, highlighting its multicultural and multidisciplinary expertise that the organisation has been utilising to solve global problems for over half a century. Balanced Scorecard (BSC) Kaplan and Norton’s (1992) BSC model looks at four perspectives (financial, internal business process, customer and learning and growth) and four metrics for each (objectives, measures, targets and initiatives). Summarised in Table 5 are some of the possible objectives and measures that could be analysed and measured in greater detail by a more thorough system of strategic analyses to come up with measures and action plans. Table 5: BSC Analysis Objectives Metrics Financial Utilise donor funds more efficiently and effectively and with greater accountability Transparency in financial reporting Self-sustaining operations Cost per beneficiary Activity-based costing Total project savings Total beneficiaries Contributions to global economic growth Customer To achieve the U.N.’s mission as per its Charter To motivate member-states to be punctual in fulfilling funding commitments Customer Satisfaction On-time service delivery Service quality Peace in the world (man-years measured) Internal Business Process Utilise benchmarking of best practices in other organisations, public and private Install information systems to improve global communication and feedback Quality of suppliers Cycle time in between projects Quantity and quality of services (QoS) Safety of Staff Learning and Growth Improve operations of HR Management Utilise existing manpower development efforts at the UN University (in Tokyo, New York and Helsinki) and at various UN Training Programmes in global venues Training Quality Application of Six Sigma Tool Utilisation Meeting effectiveness Projects completed on time and on budget Total savings to-date After coming out with detailed objectives and measures, the strategic analysis must enumerate the targets and initiatives that would further define the detailed execution of the different objectives and how their accomplishment would be measured. Since there are no possible benchmarks to compare with the U.N., the strategic analysis team can look at examples in the private sector that likewise work with governments and similar institutions that the U.N. is familiar with, and use these benchmarks as stretch goals and targets the U.N. could adopt. The BSC, it should be emphasised, is merely a tool, a good starting point for more detailed discussions at the CEB before developing detailed strategic guidelines that could be applied over the whole U.N. structure, its organs, agencies, committees and other allied institutions for the plans to be accepted and effective. Top leadership support is key. Reference List Kaplan, R. S. and Norton, D. P. (1992) The balanced scorecard – measures that drive performance. Harvard Business Review, January-February, 71-79. Miles, I. (2004) Innovation in public services. PRIME Conference, Manchester. Porter, M.E. (1980) Competitive strategy: techniques for analysing industries and competitors. New York: Free Press. United Nations (2010a) U.N. at a Glance. Retrieved on 25 April 2010 from: http://www.un.org/en/aboutun/index.shtml United Nations (2010b) U.N. Structure and Organization. Retrieved on 25 April 2010 from: http://www.un.org/en/aboutun/structure/index.shtml Read More