Environment AnalysisEnvironment Analysis-- A tool for evaluating the environment of a public A tool for evaluating the environment of a public

organization within the social management frameworkorganization within the social management framework--

Purpose of the ToolPurpose of the Tool

Evaluation of the Nature of the Environment Evaluation of the Nature of the Environment

The Six Areas of Influence on the Environment The Six Areas of Influence on the Environment

The Social Management Value NetThe Social Management Value Net

Purpose of the ToolPurpose of the Tool

Only with the input of an adequate scanning Only with the input of an adequate scanning of the environment it is possible to be of the environment it is possible to be prepared to successfully achieve the goals prepared to successfully achieve the goals established by the public organizations’ established by the public organizations’ mandate and mission.mandate and mission.

The term “environment” implies many themes The term “environment” implies many themes and actors; the challenge is making sense of and actors; the challenge is making sense of these diversities in order to contribute to the these diversities in order to contribute to the strategic decision making process. strategic decision making process.

The environment analysis asserts that all The environment analysis asserts that all organizations, projects and reforms are organizations, projects and reforms are influenced by the profound impact of influenced by the profound impact of political, economic, sociocultural and political, economic, sociocultural and institutional contexts. institutional contexts.

Purpose of the ToolPurpose of the Tool

Provide an understanding of the current and Provide an understanding of the current and potential changes outside an organization. potential changes outside an organization.

Provide strategic inputs for decision making and Provide strategic inputs for decision making and strategic management.strategic management.

Reduce the uncertainty while formulating Reduce the uncertainty while formulating adjustment mechanisms by continuosly scanning adjustment mechanisms by continuosly scanning the environment.the environment.

Evaluate the strategic position of the organization Evaluate the strategic position of the organization by understanding the Social Management Value by understanding the Social Management Value Net. Net.

Evaluation of the Nature of the Evaluation of the Nature of the EnvironmentEnvironment

The Organization and its BoundariesThe Organization and its Boundaries

The boundary of an organization establishes:

The demarcation of the interface between The demarcation of the interface between an organization and its environment. an organization and its environment.

The protection mechanism from external The protection mechanism from external tensions. tensions.

The regulation of information, input and The regulation of information, input and labor shared between an organization and labor shared between an organization and its environment. its environment.

The Organization and its BoundariesThe Organization and its Boundaries

The permeability of an organization defines The permeability of an organization defines its influence on and openess to the its influence on and openess to the environment. environment.

The attempt to acheive many goals at the The attempt to acheive many goals at the same time enhances the uncertainty level same time enhances the uncertainty level and information requirements.and information requirements.

Risk Vs. UncertaintyRisk Vs. Uncertainty

Risk: Quantitative analysis. Tends to be Risk: Quantitative analysis. Tends to be more objective. more objective.

Uncertainty: Subjective analysis. Scarce Uncertainty: Subjective analysis. Scarce statistical information. Scarce quantitative statistical information. Scarce quantitative measures and more qualitative analysis. measures and more qualitative analysis.

Public policy formation in Latin America is developed under fairPublic policy formation in Latin America is developed under fairly ly uncertain environments! uncertain environments!

The Environment and the Decision Making ProcesssThe Environment and the Decision Making Processs

The decision making process deals with several dimensions The decision making process deals with several dimensions regarding the environment:regarding the environment:

Heterogeniety Heterogeniety –– HomogenietyHomogeniety

High variability High variability –– Low variability Low variability

Uncertainty Uncertainty –– Certainty Certainty

Complex Complex –– SimpleSimple

Methodological Approaches to Envirornment EvaluationMethodological Approaches to Envirornment Evaluation

Conditions of the EnvironmentConditions of the Environment

Con

ditio

ns o

f the

Env

ironm

ent

Con

ditio

ns o

f the

Env

ironm

ent

Simple Complex

Static Historical analysis and pronostics

Descentralization

Dinamic Scenario planning Experience and learning

The Six Areas of Influece on The Six Areas of Influece on the Environmentthe Environment

The Six Areas of Influence on the EnvironmentThe Six Areas of Influence on the Environment

PoliticalPolitical

EconomicEconomic

SocialSocialInstitutional Institutional

SymbolicSymbolic

OrganizationOrganization

Global Global TendenciesTendencies

11

22

33

4455

66

Global TendenciesGlobal Tendencies

Area of Influence: Global TendenciesArea of Influence: Global Tendencies

Review of the different tendencies within a public policies framework. Positions outside the organization that influence its performance and decision making.

(Ex.: Washington Consensus, second generation reforms, institutional reforms)

Political EnvironmentPolitical Environment

Area of Influence: Political EnvironmentArea of Influence: Political Environment

General Political Environment: Political and General Political Environment: Political and governmental situation.governmental situation.

Political Cycle: Strategic positioning within a Political Cycle: Strategic positioning within a legislative period. legislative period.

Strategic Positionig within the Political CycleStrategic Positionig within the Political Cycle

Strategicpositioning

zone Fortification Zone

High High

Medium Medium

Low Low

Activity Intensity Reelection Probability

Activity level

Impact

Beginning of term 1/4 1/2 3/2 4/4

End of term

Economic EnvironmentEconomic Environment

Area of Influece: Economic EnvironmentArea of Influece: Economic Environment

Permanent or structural changes: Implies a Permanent or structural changes: Implies a review and even a redesign of a policy, review and even a redesign of a policy, program or project. program or project.

Transitory or cyclical changes: Implies an Transitory or cyclical changes: Implies an adjustment of the policy, program or adjustment of the policy, program or project due to an exceptional temporal or project due to an exceptional temporal or cyclical change. cyclical change.

Area of Influece: Economic EnvironmentArea of Influece: Economic Environment

VariablesStructural Change

(Permanent)

Temporal Change (Transitory)

Impact on the Policy, Program or Project

Social EnvironmentSocial Environment

Area of Influence: Social EnvironmentArea of Influence: Social Environment

Cultural aproach to the most relevant groups:Cultural aproach to the most relevant groups:

Demographic Issues Human Development Index Approach

Population size Education level

Age distribution Type of job

Demographic distribution Income

Ethnic composition Access to basic services

Institutional AnalysisInstitutional Analysis

Area of Influence: Institutional Environment Area of Influence: Institutional Environment

Review of formal and informal rules that constrain the organizatReview of formal and informal rules that constrain the organization:ion:

Formal Rules Informal Rules

Constitution political lobbies

Political legislation authorities

Administrative Manuals conventions

Statutes habits

Analysis of the Symbolic Analysis of the Symbolic EnvironmentEnvironment

Area of Influence: Symbolic EnvironmentArea of Influence: Symbolic Environment

Political Political ValuesValues

Social Social ValuesValues

Technological Technological ValuesValues

Economic Economic ValuesValues

Values: Shared assumptions regarding what’s good and bad. It detValues: Shared assumptions regarding what’s good and bad. It determines ermines the dominant position that reflects a preference towards certainthe dominant position that reflects a preference towards certainalternatives. alternatives.

Review of the Six Areas of Review of the Six Areas of InfluenceInfluence

Review of the Six Areas of InfluenceReview of the Six Areas of Influence

Variables Tendencies Impact on the policy, project or program Opportunities Threats

Global TendenciesPoliticalEconomicSocialInstitutionalSymbolic

It is important to carefully select variables of the environmentIt is important to carefully select variables of the environment that have an important that have an important impact on the organization and its performance. Avoid the commonimpact on the organization and its performance. Avoid the common practice of practice of

exhaustive lists of unrelated variables. exhaustive lists of unrelated variables.

Evaluating the Strategic Position of the Evaluating the Strategic Position of the Organization: Organization:

“The Social Management Value Net”“The Social Management Value Net”

The Strategic Position of the OrganizationThe Strategic Position of the Organization

In the public sector, the concept of competence is In the public sector, the concept of competence is related to the competition for resources, especially related to the competition for resources, especially within the political arena. within the political arena.

The need to show what is being offered has more The need to show what is being offered has more relevance. Therefore, itrelevance. Therefore, it’’s important to identify the s important to identify the components of the Social Management Value Net. . components of the Social Management Value Net. .

The Strategic Position of the OrganizationThe Strategic Position of the Organization

The Social Management Value NetThe Social Management Value Net

Legitimacy and SupportCitizens

............

Clients

..............

Beneficiaries

................

Obligates

..................

Founding

..............

..............

..............

..............

..............

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Suppliers

.........................................

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ComplementorsPoliciesPrograms andProjects

..............

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Synergies

..............

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Institutions

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Competitors

ResourcesIntruders

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SubstitutesOf the Private Sector

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..............

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OrganizationPolicies, projects and programsformulated under the Social Management Framework

...............................................

...............................................

The Strategic Position of the OrganizationThe Strategic Position of the Organization

The Social Management Value NetThe Social Management Value Net

Source of legitimacy and support: citizens, Source of legitimacy and support: citizens, beneficiaries, users, obligates and financing sources.beneficiaries, users, obligates and financing sources.

Complementors: Public agencies, units, private and Complementors: Public agencies, units, private and diversified level. diversified level.

Competitors: Resources intruders, private sector Competitors: Resources intruders, private sector substitutes.substitutes.

Suppliers: Labor, public, private and diversified Suppliers: Labor, public, private and diversified organizations.organizations.