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 household debt because of falling income levels, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, geopolitical disruptions, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
High brand equity
– Pay Transparency has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pay Transparency to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Pay Transparency digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pay Transparency has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
Diverse revenue streams
– Pay Transparency is present in almost all the verticals within the industry. This has provided firm in The New Age of Pay Transparency case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
Successful track record of launching new products
– Pay Transparency has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pay Transparency has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
Highly skilled collaborators
– Pay Transparency has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The New Age of Pay Transparency HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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 -
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.
Products dominated business model
– Even though Pay Transparency has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The New Age of Pay Transparency should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Pay Transparency has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The New Age of Pay Transparency, in the dynamic environment Pay Transparency has struggled to respond to the nimble upstart competition. Pay Transparency has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Interest costs
– Compare to the competition, Pay Transparency has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Pay Transparency has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The New Age of Pay Transparency HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pay Transparency has relatively successful track record of launching new products.
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.
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 -
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Pay Transparency can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pay Transparency can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
Manufacturing automation
– Pay Transparency can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pay Transparency to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Pay Transparency to hire the very best people irrespective of their geographical location.
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.
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.
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.
Using analytics as competitive advantage
– Pay Transparency has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The New Age of Pay Transparency - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pay Transparency to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pay Transparency in the Organizational Development sector and impact the bottomline of the organization.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pay Transparency business can come under increasing regulations regarding data privacy, data security, etc.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pay Transparency with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The New Age of Pay Transparency, Pay Transparency may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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.
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.
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.
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.