GAUTAM SINGH, HOSPITALITY TRAINER, www.educatererindia.com ,
6 factors of organizational capability
Organizational capability factors are the strategic strengths and weaknesses existing in different functional areas
within an organization which are of crucial importance to strategy formulation and implementation. These are
divided into six largely accepted and commonly understood functional areas. ( examples to be studied from
azhar kazmis book )
Financial capability factors related to sources, usage and management of funds. Typical strengths that support
financial capability are: access to financial resources (group cos., reserves) amicable relationship with financial
institutions (bankers) high level of credit worthiness efficient capital budgeting system low cost of capital as
compared to competitors high level of shareholders confidence (reliance history) effective management control
system ( birla group) tax benefits due to various government policies
Marketing capability factors related to pricing, promotion, product, place and integrative and systemic aspects
typical strengths that support marketing capability are: wide variety of products (cvbu, p&g, levers) better quality
of products (toyota, sony) sharply focused positioning (amway, tupperware, hdfc standard life) low prices
compared to similar products (wal-mart) price protection due to govt. Policy (farm produce global) high quality
customer service (fedex) effective distribution (bisleri) effective sales promotion (tata salt, swatch) high profile
advertising (rolex, mercedes) favorable company and product image (tata, ge) effective marketing management
information system(coke )
Operational capability factors related to the production system, operations and control system and related to the
r&d, new product development systems typical strengths that support operations capability are: high level of
capacity utilization (ginger, vadodara express) favorable plant locations (which is the best place to put up a steel
plant) high degree of vertical integration (zam leather) reliable sources of supply (wal-mart, dell) effective control
of operational costs (toyota, tata motors) existence of good inventory control system (jit system) high caliber r&d
team and npd system(3m, titan, toyota) technical collaboration with reputed firm from other country(tata with
auto comp manufacturers from all over the world)
Human resource capability factors related to the personnel system, organizational and employee characteristics
and related to industrial relations. Typical strengths that support hr capability are: genuine concern for hr
management and development efficient and effective hr systems(tata steel) organization perceived as a fair and
model employer(infosys) excellent training opportunities and facilities(ge) congenial working
environment(boeing, disneyland) highly satisfied and motivated workforce(google) high level of organizational
loyalty(sas, tcs) safe and salutary working conditions
Information management capability factors related to the acquisition and retention of information, processing,
synthesis, retrieval, usage, transmission and dissemination of information. Also the factors related to integrative,
systemic and supportive elements typical strengths that support information management capability are: ease
6 factors of organizational capability
Organizational capability factors are the strategic strengths and weaknesses existing in different functional areas
within an organization which are of crucial importance to strategy formulation and implementation. These are
divided into six largely accepted and commonly understood functional areas. ( examples to be studied from
azhar kazmis book )
Financial capability factors related to sources, usage and management of funds. Typical strengths that support
financial capability are: access to financial resources (group cos., reserves) amicable relationship with financial
institutions (bankers) high level of credit worthiness efficient capital budgeting system low cost of capital as
compared to competitors high level of shareholders confidence (reliance history) effective management control
system ( birla group) tax benefits due to various government policies
Marketing capability factors related to pricing, promotion, product, place and integrative and systemic aspects
typical strengths that support marketing capability are: wide variety of products (cvbu, p&g, levers) better quality
of products (toyota, sony) sharply focused positioning (amway, tupperware, hdfc standard life) low prices
compared to similar products (wal-mart) price protection due to govt. Policy (farm produce global) high quality
customer service (fedex) effective distribution (bisleri) effective sales promotion (tata salt, swatch) high profile
advertising (rolex, mercedes) favorable company and product image (tata, ge) effective marketing management
information system(coke )
Operational capability factors related to the production system, operations and control system and related to the
r&d, new product development systems typical strengths that support operations capability are: high level of
capacity utilization (ginger, vadodara express) favorable plant locations (which is the best place to put up a steel
plant) high degree of vertical integration (zam leather) reliable sources of supply (wal-mart, dell) effective control
of operational costs (toyota, tata motors) existence of good inventory control system (jit system) high caliber r&d
team and npd system(3m, titan, toyota) technical collaboration with reputed firm from other country(tata with
auto comp manufacturers from all over the world)
Human resource capability factors related to the personnel system, organizational and employee characteristics
and related to industrial relations. Typical strengths that support hr capability are: genuine concern for hr
management and development efficient and effective hr systems(tata steel) organization perceived as a fair and
model employer(infosys) excellent training opportunities and facilities(ge) congenial working
environment(boeing, disneyland) highly satisfied and motivated workforce(google) high level of organizational
loyalty(sas, tcs) safe and salutary working conditions
Information management capability factors related to the acquisition and retention of information, processing,
synthesis, retrieval, usage, transmission and dissemination of information. Also the factors related to integrative,
systemic and supportive elements typical strengths that support information management capability are: ease
