is sometimes a need to compare organizations in completely different areas, such
as a retail group with a hospital. The
usual financial analysis is not appropriate because each organization uses completely
different accounting principals, financial reports and measures for success.
model can evaluate how well the management of each organization is in control
– what we call its ‘management grip rating’- and this can form the basis
for a useful comparison. Each organization, although in completely different
fields can be asked identical questions, e.g. do you know which skills your
people actually have, or, do you have a strategy for dealing with the major
threats to your operation? Answers
given to questions formulated with the help of the model will be
different, but what is being discovered is whether there is an answer and how
well it is thought out - in other words, do the management know what is going on
in their organization and how well are they exercising control over it?
The scoring system explained before in the section on 'Evaluating
management grip', can be used to provide a quantitative comparison.
The higher the score the better the management control.
However, the organization is not necessarily more successful (this is
measured by the performance aspect and there may be many reasons why the
organization is not successful - market conditions, catchment area or government
action). A single large organization with separate divisions can employ this
technique to evaluate the calibre of its management in each of its divisions.
We leave it
to the reader to apply the concept of comparing different organizations, but
offer a few examples.
charity or lottery deciding who to allocate funds to among a number of claimants
including a museum, a theatre and a sports club would find
traditional financial analysis of little
value. The model will not
necessarily show the most deserving cause but it will show which organization is
the most effectively managed and therefore which is likely to use the money to
the management competence of subsidiaries or departments would find traditional
methods inappropriate, for example, comparing a retail subsidiary with a
manufacturing subsidiary or the sales department with the
research department. Our model can
be applied to all, to highlight the most effective management team.
subset of the model can
also be used to compare a single aspect of two different organizations – the
culture of a government department with that of a large retail group.