Macro Environmental Analysis

Introduction

In 2000, CFSTD became the second social services organization in Ontario to amalgamate Children’s Mental Health and Protection Services. An appreciation of CFSTD and its services can be obtained by visiting its website: http://www. timminschildfamily. org In order to gain a greater understanding of CFSTD, a strategic management analysis will be completed. This goal will be achieved by completing the following:

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• an analysis of CFSTD’s external and internal situation;
• an evaluation of CFSTD by using Porter’s Five Forces model,
• an analysis of CFSTD’s main competition.

Based on this assessment, strategic objectives will be identified and recommended.

External Situation

As presented by Grant (2007), macroenvironmental factors are beyond a firm’s control. To adapt and remain competitive, a firm must understand how these external influences “affect the firm’s industry environment” (p. 66). The six factors impacting the endeavours of a firm are demographic, economic, political/legal, ecological, socio-cultural, and technology. Barney (2007) states an analysis of the external situation identifies a firm’s “critical threats and opportunities in its competitive environment” (p. 1) and “examines how competition in this environment is likely to evolve and what implications that evolution has for the threats and opportunities a firm is facing” (Ibid).

The following outlines these factors and their level of influence on CFSTD.  The population of the City of Timmins can best be described as aging with a decrease in birth rate. It is important to add that the population of Native People migrating to the Timmins area from the James Bay coast is increasing. Since CFSTD’s main reason for operating is to offer services exclusively to youth under the age of sixteen and their respective families, the demographic factor scores high. Without this, threats such as decrease in ministry funding and personnel layoffs can occur.

To 4 adapt to the changing demographic environment, CFSTD can implement new and creative initiatives by collaborating with other service providers.

1. Economic:High The current economic situation has impacted most if not all of the world. As a result, government funding to organisations has been affected. Due to current budget cuts, CFSTD is facing threats of potential downsizing in various services, capping travel and other expenditures and suspending relevant personnel training initiatives. To respond to the changing economic environment, CFSTD can explore amalgamating programs and services, developing new partnerships and increasing its capacity in the volunteer sector.
2. Political:Medium Whenever a new government is elected, changes to the legislation can be anticipated. Amendments made to provincial legislation such as the Child and Family Services Act impact CFSTD’s operation. Threats CFSTD can face due to the changing political environment are mostly cost and time demanding: development of new operation and administrative procedures, staff training in these areas, to name a few. However, developing and implementing new initiatives can translate into opportunities for CFSTD with the influence of the political environment.
3. Ecological:Low Although located in a city where extreme weather conditions are experienced such as harsh winters with abundant snowfalls, the ecological situation poses minimal impact on CFSTD’s service delivery. Fortunately, with the implementation of videoconferencing services, travel to various areas is reduced. Thus, programming continues to be offered to the client population.
4. Social/Cultural:Medium CFSTD’s culture encompasses a unionized personnel, which is mostly female, with a diversity in educational backgrounds, expertise and work experience. In addition, some of the personnel are fast approaching retirement. This factor can pose threats such as a delay in services offered to clients due to union issues, potential work stoppage, and a wealth of knowledge and expertise lost when veteran personnel retire.

Should this be the case, an opportunity that CFSTD could explore, as mentioned in an article by Dychtwald et al. (2004), is to “create a culture that honors experience” (p. 51), 5 that is, to offer flexible contracts to retiring staff who can “step in at a moment’s notice by filling gaps and help bringing the next generation of leaders up to speed” (p. 54). Technological:Low CFSTD ensures that new technological initiatives are implemented on a regular basis. Potential threats could be additional staff training and resistance to endorsing new technological initiatives.

Technology creates many opportunities such as improving efficiency of work practices and reducing overall costs. In sum, the DEPEST analysis indicates that demographic and economic factors significantly impact CFSTD while technological and ecological factors are minor influences. The socio-cultural and political factors have a mid-level effect on the organization. The external analysis points out the possible threats and opportunities that CFSTD faces. To complement this external analysis, an internal assessment will follow.

As noted by Barney (2007), “an internal analysis helps a firm identify its organizational strengths and weaknesses” (p. 11). Furthermore, it will illustrate “which of its resources and capabilities are likely to be sources of advantage and which of them are less likely to be sources of such advantages” (Ibid). CFSTD’s internal situation will be analyzed using the VRIO framework.

Internal Situation

Barney (2007) states the VRIO framework is a “structured in a series of four questions to be asked about the business activities in which a firm engages” (p. 138). In addition, the “answers to these questions determine whether a particular firm resource or capability is a strength or a weakness” (Ibid). The following table summarizes the VRIO questions as they apply to CFSTD.

The findings of the VRIO analysis indicate which resources and capabilities are of significant importance to CFSTD. Ministry funding, is extremely relevant. Although provided on a quarterly basis, funding can change based on data regarding client 7 volume. CFSTD is bound to a funding formula which is reviewed on an annual basis by the government. Despite its potential for fluctuation, funding is a strength for CFSTD.

Technology is a pertinent vehicle of communication. Technology permits CFSTD to offer specialized services to clients that are not readily accessible in the North. CFSTD personnel present as a relevant resource. The diversity and expertise of the personnel is of great value, strength and rarity. Data is another noted strength. The gathered information, analyzed with evidenced-based qualitative and quantitative measures, enables CFSTD to assess the needs and pressure points and, in turn, develop proposals and implement new initiatives that will better serve the client population.

Services are also a relevant resource. CFSTD is the largest social service organisation within the area offering more than twenty programs and services that are unique and valuable. Annually, service enhancements take place via the program review process. Furthermore, collaborative projects are occurring with other service providers to offer services that meet clientele needs. Currently, location resources are a weakness. CFSTD is facing a potential closure of one of its facilities due to the constant low number of young offenders coming into custody.

CFSTD is communicating with the ministry at this time regarding next steps. Overall, the internal analysis of CFSTD clearly identifies areas of strength and weakness and those requiring improvement. It is important to analyze how and where CFSTD fits into the non-profit industry and determine the intensity of competition and profitability (in this industry, profit is viewed by client volume and ministry funding). In order to do so, an evaluation of CFSTD will be conducted using Porter’s Five Forces of Competition Framework.

Objectives

Based on the various analyses completed in this paper, recommended strategic objectives are for CFSTD to:

• Develop and implement a performance appraisal tool that encompasses competency modelling and that is congruent with CFSTD’s strategic plan;
• Develop a contingency plan with the Ministry in the possibility of the closure of one of CFSTD’s locations;
• Research and identify a framework such as management innovation that can be applied agency wide and that is in alignment with CFSTD’s strategic plan,
• Develop and implement a plan to recruit qualified Native professionals.

Conclusion

Overall, the analyses completed in this paper have allowed us to better understand CFSTD. Now, we can appreciate how CFSTD is doing, what is working well, what requires enhancing and what directions CFSTD plans on going into in the near future.

References

1. Barney, J. B. (2007). Chapter 1: What is strategy? In Gaining and sustaining competitive advantage (3rd ed. , pp. 1-16). Upper Saddle River, NJ: Prentice-Hall.
2. Barney, J. B. (2007). Chapter 5: Evaluating firm strengths and weaknesses. In Gaining and sustaining competitive advantage (3rd ed. , pp. 127-169). Upper Saddle River, NJ: Prentice-Hall Inc.
3. Dychtwald, K. , Erickson, T. , & Morison, B. (2004). It's time to retire retirement. Harvard Business Review, 82(3), 48-57. http://library. athabascau. ca/mbadrr/STMT-500/ Chapter 5-Evaluating firm strengths and weaknesses. pdf
4. Grant, R. M. (2007). Contemporary strategy analysis (6th ed. ). Malden, MA: Blackwell Publishing. Kunuwanimano Child and Family Services (2009). Retrieved November 7, 2009, from http://www. kunuwanimano. com .
5. Porter, M. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78-93. http://0-search. ebscohost. com. aupac. lib. athab ascau. ca/login. aspx? direct=true;AuthType=url, ip,uid;db=bth;AN=28000138;site=ehost-live

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