Understanding weaknesses and threats – achieving business objectives
There are various factors that can influence the performance of the organization. Some of the factors are the strengths of the organization, while others can be its weaknesses. Some factors offer opportunities for further growth, while others threaten the same. Understanding the weaknesses and threats, along with the differences between them, is crucial for any organization.
The weakness of an organization
Weakness can be stated as the limitations, defects, faults, or shortcomings of the firm that act as an obstacle towards the achievement of the organizational objectives. The weaknesses often hinder the performance of the organization and prevent optimal output (Pickton & Wright, 1998). These are the segments where the organization needs to incorporate improvements if they want to maintain their competitive edge in the market. Working on the weaknesses enables the organizations to obtain higher turnover than the industry average, maintain debt levels, increase supply chain adequacy, and better capital management. Some of the most common examples of organizational weaknesses include: .
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- Substandard investments in organizational research and development,
- Minimal margins on profit,
- Poor quality of customer assistance,
- High turnover of employees,
- High levels of debt and many more.
Threats of an organization
A threat is defined as an unfavorable condition present in the environment in which the organization operates that can inflict potential damage to the strategy. It can be specific barriers, constraints, or any external element that can incur problems and hamper, damage, or injure its processes (Chermack & Kasshanna, 2007). In simple words, the threats of an organization are the factors that can potentially harm the firm. Common examples of threats include the rise of competition in the market, increased input costs, environmental factors, and many more. The common threats of an organization include:
- Increase in pay levels,
- Hike in the prices of raw materials,
- Increased market competition,
- Legal regulations of the nation
- Fluctuation in currency exchange rates and many more.
Weakness vs. threats
The weaknesses are defined as an organization’s internal vulnerabilities, whereas the threats are identified as dangers that are external to the organization (Houben, Lenie & Vanhoof, 1999). It is possible for the organizations to improve their weaknesses as it is internal to their processes, such as lack of expertise in a specific field, communication gap among team members, or any such thing. Threats can also be the ability of other organizations in the market to prevent the firm’s ability to achieve its goals. One typical example of threats presented by another organization includes the launch of a new product with better features at a lower price that can impact the potential customers of the organization. The organization has no control over such factors except to prepare for it.
It is possible for the weaknesses to maintain existence in other entities as well, similar to the way as harboring threats. In general, the business managers need to take the various threats and weaknesses that are known or suspected of and evaluate them across the various organizations in the same field to analyze the overall risk factors related to a particular initiative. This analysis, in addition to the strength and opportunity analysis, can enable the organization to make more informed decisions.
Reference
Chermack, T. J., & Kasshanna, B. K. (2007). The use and misuse of SWOT analysis and implications for HRD professionals. Human Resource Development International, 10(4), 383-399.
Houben, G., Lenie, K., & Vanhoof, K. (1999). A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises. Decision support systems, 26(2), 125-135.
Pickton, D. W., & Wright, S. (1998). What’s swot in strategic analysis?. Strategic change, 7(2), 101-109.
