Application of SWOT Analysis

The History and Development of SWOT Analysis

The history and development of SWOT analysis have continued to elicit debate on whom or when it was coined. Certain scholars believe it originated in the 1950s resulting from the work of two professors; Kenneth Andrews and George Albert Smith Jr. of Harvard Business School. On the contrary, there are those who believe the term was coined in the 1960s by Albert S. Humphrey while at Stanford Research Institute (Dyson, 2004). Nevertheless, the concept has been widely used thereafter. While undertaking an analysis, the acronym which stands for strength, weaknesses, opportunity, and threats is broken down. Strengths are considered as internal factors that a business has control over and help to derive the success of the business. The weakness represents those factors that a business has control over yet not properly used hence reduces the overall productivity of the business (Lee & Ko, 2000). Threats and opportunity are external factors affecting the operation of a firm. Threats are factors that reduce the success of a business and a firm has no control over while the opportunity presents actors which can be capitalized and turned into profit generation sources.

Advantages

Theoretically, it makes it easier to identify and classify the potential causes of business success and failure be it an internal or external through analysis of a business environment. The SWOT analysis helps organizations to establish whether objectives can be achieved thereafter creating more realistic goals and targets (Team FME, 2013). The technique provides a roadmap that provides a specific solution derived from a generalized point. It is more evidence in the manner in which it provides a general solution from which management can synthesis to obtain accurate results. Through the tool, it is possible for any organization to identify the negative and positive macro and micro factors that affect the operation from which decisions can be derived. The technique makes it easier for any organization to uncover the potential opportunities which when utilized can provide a competitive edge over the rivals (Gurel, 2017). Furthermore, the tool allows a firm to understand their weakness thus assisting in eliminating as well as managing the potential threats. It is possible for a business to develop a strategy that differentiates it from the rivals and by so doing it assists in forming a thinking model. It is thus possible to view the SWOT analysis as a source of a substructure for strategic decisions to organizations.

Disadvantages

Despite its wide use, the concept has attracted criticism to the fact that it is not effective enough as to form part of an organization’s strategy. Critiques believe that it does only offer the definition of the prevailing situation hence should not be accepted as an analytic tool. The fact that the tool allows for listing of strengths on a piece of paper as opposed to the actual testing of the organization and experiencing its strength makes it lack scientific attribute (Sabbaghi & Vaidyanathan, 2004). It is thus prone to bias and subsequently unreliable technique. It is believed that the tool was invented when the business environment was still as opposed to the dynamic nature of business in the 21st century hence not appropriate. The validity of entries in the SWOT matrix is believed to be affected by the structural and dynamic changes in the level of systems and subsystems. The items that make through to the matrix often are many and compete in that connection the SWOT has a challenge when it comes to quality and quantity. The fact that many factors often are identified does not imply any sort of quality (Dyson, 2004). The tool does not have the obvious limit of both relevant and irrelevant yet one is expected to identify the factors influencing the objectives of the firm. Determining the priorities of so identified factors is tedious hence presenting a weakness to the tool. The use of the SWOT analysis often limits brainstorming. Many a time, organizations may opt for the technique to defend the result of fiscal year performance (Gurel, 2017).

Use of SWOT Analysis to Understand Factors Affecting Employee Performance

Conducting a SWOT analysis is critical in understanding internal factors affecting organization’s performance. The strength and weakness of an organization can be attributed to employee related factors. The cause of poor performance may be attributed to fewer employees to carry on the business activities. Using the SWOT technique, it is possible to identify this fact. Similarly, it could be due to untrained personnel leading to too much breakage or low-quality products. Out of the SWOT analysis, a business is able to identify the same and make needed corrections to remain on course (Lee & Ko, 2000). Environmental analysis using the SWOT is likely to reveal the cause of good or poor performance as relating to the level of skills that employees possess (Jackson, Joshi, & Erhar, 2003). A critical review of the technique is thus important for understanding the performance of employees while a review of employee performance also assists in the creation of the SWOT matrix for overall decision making.

References

Dyson, R. (2004). Strategic development and SWOT analysis at the University of Warwick. European Journal of Operational Research, 152, 631–640.

Gurel , E. (2017). Swot Analysis: A Theoretical Review. The Journal of International Social Research, 10(51), 994-1005.

Jackson, S., Joshi, A., & Erhar, N. (2003). Recent Research on Team and Organizational Diversity: SWOT Analysis and Implications. Journal of Management, 29(6), 801–830.

Lee, S., & Ko, A. (2000). Building balanced scorecard with SWOT analysis, and implementing ``Sun Tzu’s The Art of Business Management Strategies’’ on QFD methodology. Managerial Auditing Journal, 68-76.

Sabbaghi, A., & Vaidyanathan, G. (2004). SWOT Analysis and Theory of Constraint in Information Technology Projects. Information Systems Education Journal, 2(23), 1-19.

Team FME. (2013). SWOT Analysis- Strategy Skills. Free-management-ebooks.