The New Age of Pay Transparency SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The New Age of Pay Transparency
A new age of pay transparency began on January 11, 2016, when Executive Order 13665 took effect. Applying to employers who have contracts valued over $10,000 with the U.S. government, the order prohibits them from retaliating against employees for disclosure and discussion of compensation information. This effectively increases pay transparency for an estimated 20% (28 million workers) of the labor force. As a result, the difference in pay between men and women and between white and minority employees is now under increased scrutiny. This article aids employers in this new era of heightened attention to their compensation practices. We begin with an overview of the current dimensions of pay gaps in the U.S., providing a societal level perspective. Pay transparency is emphasized as a means to help narrow earnings gaps at the firm level. Legal, regulatory, and social aspects of pay disclosure are discussed and employers currently using pay transparency are highlighted. We also present management responsibilities and practices for the new age of pay transparency.
Authors :: Richard G. Trotter, Susan Rawson Zacur, Lisa T. Stickney
Swot Analysis of "The New Age of Pay Transparency" written by Richard G. Trotter, Susan Rawson Zacur, Lisa T. Stickney includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pay Transparency facing as an external strategic factors. Some of the topics covered in The New Age of Pay Transparency case study are - Strategic Management Strategies, Compensation, Gender and Organizational Development.
Some of the macro environment factors that can be used to understand the The New Age of Pay Transparency casestudy better are - – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is increasing trade war between United States & China,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of The New Age of Pay Transparency
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The New Age of Pay Transparency case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pay Transparency, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pay Transparency operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The New Age of Pay Transparency can be done for the following purposes –
1. Strategic planning using facts provided in The New Age of Pay Transparency case study
2. Improving business portfolio management of Pay Transparency
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pay Transparency
Strengths The New Age of Pay Transparency | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pay Transparency in The New Age of Pay Transparency Harvard Business Review case study are -
Organizational Resilience of Pay Transparency
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pay Transparency does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Pay Transparency is one of the most innovative firm in sector. Manager in The New Age of Pay Transparency Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Pay Transparency has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The New Age of Pay Transparency Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the The New Age of Pay Transparency Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Pay Transparency has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study The New Age of Pay Transparency - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Organizational Development field
– Pay Transparency is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Pay Transparency in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Pay Transparency are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Pay Transparency is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Pay Transparency is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The New Age of Pay Transparency Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Organizational Development industry
– The New Age of Pay Transparency firm has clearly differentiated products in the market place. This has enabled Pay Transparency to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Pay Transparency to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Pay Transparency in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Pay Transparency is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Pay Transparency is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Richard G. Trotter, Susan Rawson Zacur, Lisa T. Stickney can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses The New Age of Pay Transparency | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The New Age of Pay Transparency are -
Capital Spending Reduction
– Even during the low interest decade, Pay Transparency has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The New Age of Pay Transparency, is just above the industry average. Pay Transparency needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard G. Trotter, Susan Rawson Zacur, Lisa T. Stickney suggests that, Pay Transparency is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study The New Age of Pay Transparency that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The New Age of Pay Transparency can leverage the sales team experience to cultivate customer relationships as Pay Transparency is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Pay Transparency supply chain. Even after few cautionary changes mentioned in the HBR case study - The New Age of Pay Transparency, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pay Transparency vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Pay Transparency, firm in the HBR case study The New Age of Pay Transparency needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Pay Transparency has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Pay Transparency even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Pay Transparency products
– To increase the profitability and margins on the products, Pay Transparency needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Pay Transparency needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Pay Transparency has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As The New Age of Pay Transparency HBR case study mentions - Pay Transparency takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities The New Age of Pay Transparency | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The New Age of Pay Transparency are -
Buying journey improvements
– Pay Transparency can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The New Age of Pay Transparency suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Pay Transparency can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Creating value in data economy
– The success of analytics program of Pay Transparency has opened avenues for new revenue streams for the organization in the industry. This can help Pay Transparency to build a more holistic ecosystem as suggested in the The New Age of Pay Transparency case study. Pay Transparency can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pay Transparency can use these opportunities to build new business models that can help the communities that Pay Transparency operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pay Transparency can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Pay Transparency can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pay Transparency can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Pay Transparency to increase its market reach. Pay Transparency will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Pay Transparency can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Pay Transparency has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Pay Transparency can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pay Transparency is facing challenges because of the dominance of functional experts in the organization. The New Age of Pay Transparency case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pay Transparency can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The New Age of Pay Transparency, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Pay Transparency to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats The New Age of Pay Transparency External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The New Age of Pay Transparency are -
Regulatory challenges
– Pay Transparency needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Environmental challenges
– Pay Transparency needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Pay Transparency can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Consumer confidence and its impact on Pay Transparency demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Pay Transparency is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pay Transparency in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Pay Transparency has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Pay Transparency needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Pay Transparency
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Pay Transparency.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pay Transparency can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Pay Transparency can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Pay Transparency.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Pay Transparency will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Pay Transparency high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of The New Age of Pay Transparency Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The New Age of Pay Transparency needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The New Age of Pay Transparency is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The New Age of Pay Transparency is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The New Age of Pay Transparency is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Pay Transparency needs to make to build a sustainable competitive advantage.