Examples of weaknesses
From CEOpedia | Management online
| Examples of weaknesses |
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Weaknesses of organization include all its features, resources and internal processes that adversely affect its functioning, activities, tasks and management processes at the operational and strategic levels. As a consequence, weaknesses restrict the effective implementation of the organizational objectives and limits the possibilities for success. Organization with more weaknesses than strengths, can not afford to perform broad range of development activities in situation of dominating threats (managers should choose defensive strategy, mini-mini strategy in such situation). In growing market opportunities with dominating weakness managers should choose competitive strategy (mini-maxi strategy). In SCOT analysis, word weakness is changed to challenge, with basically the same general meaning, but adding little ambiguity for managers performing the analysis.
Examples of weaknesses
Area of knowledge and human resources
- low level of competence of employees, lack of ability to use the latest technologies,
- management system limits the free sharing of knowledge, employees act in accordance with the principle that "he who has the knowledge, has the power" and retain all the relevant information for themselves,
- executives do not care for the personal development of employees, there is a lack of training in developing competences and skills,
- employees are not motivated to learn and acquire knowledge resulting in more efficient implementation of tasks,
- employees are dissatisfied with working conditions/wages/social climate, which translates into a high level of staff turnover,
- employees are afraid to take risks, any failures are strictly punished, atmosphere of fear and suspicion dominates in company,
- there are frequent conflicts between employees, management can not cope with conflict resolution and avoids confrontation with the parties of conflict,
- employees try to follow the orders of the management at a minimum level of efficiency,
- unhealthy competition between employees, all treat each other as potential enemies limiting the ability to achieve own particular objectives,
- location of the company negatively influence morale of employees, there are problems with parking places and public transportation,
- personal culture of employees adversely affects the level of customer satisfaction and the atmosphere at work.
- lack of employment in certain organizational units while overgrowth of employment in the other,
Area of logistics, production, technology, research and development
- resistance management and employees to the acquisition of new technologies and their implementation into production,
- low flexibility in adjusting the production process to the changing requirements of customers and fluctuations in demand, necessary changes take too long to implement,
- frequently changing suppliers, problems with the quality of supply, the lack of price stability of incoming raw materials/goods,
- old machines with high failure rates, lack of access to service and spare parts,
- lack of patents and protected trademarks,
- location of the organization at large distances from the source of raw materials,
- problems with the timely execution of orders, long waiting times for execution of production orders resulting from the growing customer demands,
- lack of certification and accreditation, lost tenders due to lack of implementation of the ISO 9001 quality management system standards,
- employees are not involved in generating innovative ideas,
- Innovative ideas of employees are deposited on the shelf, the management did not even consider their implementation as it requires their effort and risk of failure,
- frequent shortages of inventory of raw materials/goods,
- warehouse stores large stocks of goods not sold (slow-moving), which increases the cost of storage and limits the available storage area for new merchandise,
Area of sales and customer service
- limited number of sales representatives, resulting in long waiting times for direct contact (in case customer demands it),
- narrow range of assortment, does not correspond to the changing needs and preferences of customers,
- low levels of customer satisfaction due to the quality of service,
- customers go to the competition due to high prices and poor service,
- management does not conduct market research of customer needs, there is no knowledge about the changes in customer needs and requirements, company does not communicate openly with customers,
- between the employees of the sales department there is atmosphere of conflict and competition, resulting from the system of evaluation and reward based on individual achievement,
- some product groups generate losses, and management does not limit their participation in the portfolio of products/services offered by the company,
- reputation among customers is very low, majority sees the company as untrustworthy partner,
- low effectiveness of marketing activities, lack of qualified staff in the marketing department or a complete lack of such a department in the company,
- organization does not have any IT system to assist the work of the marketing department and the sales department,
- company's market share is low and still declining.
- low spending on marketing and promotions limits the effectiveness of these measures and an increase in the number of customers,
Area of finance and ability to develop
- limited access to internal sources of financing (owners, shareholders),
- lack of a systematic process of cost control and budgeting, information about financial status presented to management are outdated and general, they do not allow to make effective investment decisions.
- no IT system supporting flexible reporting tailored to the information needs of management,
- company's financial results are unsatisfactory, liquidity is at risk, a large part of the assets is frozen in inventory,
- there are problems in the timely payment of obligations,
- company does not monitor the inflow of receivables, there are problems with the collection of receivables from customers, the goods are sold to unreliable contractors despite their growing debt.
- company has no reserves of capital, allowing development and investment,
- credit rating for the company is low due to the scale of existing debt,
- level of fixed costs in the company significantly increases the threshold sales necessary to achieve the minimum level of profitability,
Area of management systems and business processes
- company does not have IT based management information system, uses a simple financial accounting that does not give advanced reporting functions,
- autocratic management style dominate in organization, managers believe that the fear of losing one's job is the best motivator of people,
- management does not care about employee development, it requires them to only execute commands
- managers and supervisors acting as controllers, any signs of protest and critical comments are ignored
- organizational structure of the company is characterized by extreme centralization, and hampers the flexibility to adapt to changes in market conditions,
- company is dominated by bureaucratic control procedures, workers fill a large amount of unnecessary forms used only for control and clearance of work,
- leadership did not change the management system for many years, does not conduct experiments with new tools increasing the effectiveness of managerial work.
- management did not carry out a systematic assessment of their own work, focuses exclusively on evaluating, punishing or rewarding employees,
- lack of systematic monitoring of the management processes.
Author: Krzysztof Wozniak
