Deal With Credit Issues

Stagnation vs. Dynamism. Stagnation occurs when there is no infusion of new energy into the organization or relationship. In a closed organization with no partnerships (past orientation), change is undesirable and suppressed. Dynamism results from the infusion of new energy and ideas (future orientation), and it is essential if a business is to successfully change with the demands of its customers and markets. How stagnant or dynamic is your organization’s culture?

Alienation vs. Collaboration. Organizations that isolate themselves cannot form partnerships with others. There is a lack of trust toward people both inside and outside the organization, which results in alienation (past orientation). Collaboration (future orientation), on the other hand, involves the give and take of information and a degree of self-disclosure, which results in building trust between people. How would you rate your organization on the alienation–collaboration scale?

The economic influences on pricing include monopoly and the extent of competition. Antitrust legislation aims to stop abuses of market power by big companies and to prevent mergers or acquisitions that would create a monopoly. Supply and demand affect pricing, because generally when supply exceeds demand prices will fall. The converse is also true: when demand exceeds supply prices will rise. One sales technique is often to stimulate demand by creating a perception of scarcity. Linked to this concept is price elasticity of demand, which highlights how the volume of demand is influenced by changes in price.

Where are the greatest areas of risk relating to the most significant strategic decisions?

What are the potentially dislocating events that could inflict the greatest damage on your organisation? (The scenario planning techniques outlined in Chapter 6 are valuable for assessing this issue.)

What level of risk is acceptable for the company to bear?

What is the overall level of exposure to risk? Has this been assessed and is it being actively monitored?

What are the risks inherent in the organisation’s strategic decisions, and what is the organisation’s ability to reduce the
incidence and impact on the business?

What are the costs and benefits of operating effective riskmanagement controls?

Are the risks inherent in strategic decisions (such as acquiring a new business, developing a new product, or entering a new market) adequately understood?

At what level in the organisation are the risks understood and actively managed? Do people fully realise the potential
consequences of their actions, and are they equipped to understand, avoid, control or mitigate risk?

What review procedures are in place to monitor risks?

To what extent would the company be exposed if key staff left?

If there have been major new developments in the organisation (such as a new management structure or reporting arrangements), are the new responsibilities understood and accepted?