Network Analysis of Business Organizations
The definition of network analysis is functional, meaning that it is used by managers to determine the relationship between the organization and other actors in the environment.
Usually, these parties are also defined in the form of organizations, therefore this analysis is called network analysis between organizations.
The following is an explanation from the picture above:
Organizational network analysis
1. Suppliers
The relationship between the supplier and the organization (business), ie. depositing raw materials and services to commercial organizations for the implementation of production processes carried out by organizations whose suppliers are mutually beneficial. received, that is, correct and timely payment.
Example: rubber company supplies shoe sole raw materials on April 1 to shoe company X. then on May 1 shoe company X pays for shoe raw materials according to the original contract.
2. Competitors
Competitors or competitors there are organizations that are similar and have products with previous organizations, the link is that if the organization has competitors, then each organization competes for the quality of its products and improves its quality, on the contrary, the presence of competitors also makes competition unfair, for example, adding harmful substances to its products to improve its quality.
Example: company A has a noodle product with green vegetable ingredients, then company B innovates to compete with product A by increasing the noodle content, but the noodles made by company B only use flour and are mixed with preservatives.
3. Cooperation partners
Cooperation partners are organizations that have a cooperative relationship with companies to seek mutual benefits, help and avoid competition between them, have the same vision and mission.
Example: company A cooperates with company B in the field of production, that is, if company A cannot meet the print production offer, then company A asks company B for help to complete the offer through profit sharing according to the contract.
4. Stakeholders or Mass Organizations
Its relationship with the organization is to participate in monitoring the company's performance or participate in monitoring the company's performance in its commercial activities. The reciprocity that community organizations receive is the fulfillment of the demands of justice.
Example: The Indonesian Consumer Institute Foundation is a consumer who controls the products produced by the company so as not to harm consumers. Consumers who use the product.
5. Trade Unions
Its relationship with the organization is to communicate or take into account the wishes and requests of workers, which are sent to authorized companies. The reciprocity that the trade union receives from the organization consists in the fact that the organization receives part of the wishes or requests.
Example: The union of workers of company X demands a salary increase according to the standard of living of the general public, the company. didn't do it directly. In response to the request, they are awaiting a government decision on who has the authority to set the minimum wage for workers. after the government issued an order on UMR, the company finally had to comply with the government's decision.
6. Authority of relevant agencies
Government agencies act as law enforcement, recognition of the establishment of companies or regulators of policies. company so that the company can carry out the production process safely and comfortably. The reciprocity that the state receives is the payment of taxes paid by the company.
Example: Company A is the official office of the Hajj distribution service, they follow the rules of the authority on the hajj distribution procedure, and the company is officially recognized by the government, so that if there is a problem, Religious sanctions are applied.
7. Customers
Customers are one of the most important elements of an organization's network because customers are individuals or groups that buy, use, consume products from commercial organizations. So that the organization makes a profit, which is then used to spin the wheels of production. The advice received from customers is the fulfillment of daily needs and a sense of satisfaction.
Example: Company A is a company that produces soft drinks that continues to develop the variety and taste of its drinks, because consumer tastes are growing and varied, so that consumers feel satisfied when consuming their products.
General Environmental Theory
The definition of general environmental theory is an organizational theory that explains the breadth of organizations that surround a community. Here it is explained that an organization cannot function without the factors in the diagram above.
Here we explain the diagram above:
1. Culture: An organization must obey or follow the customs and culture that surround the organization so that it runs smoothly and does not interfere with the production process.
Example: CHINA Limited Liability Company will build a factory in the city of Yogyakarta so that the people of Yogyakarta can get it. CHINA Limited Liability Company must follow the culture and rules of the sultan and respect the decisions made by the sultan.
2. Social: The organization must establish good relations with the community around the organization. Because without a harmonious relationship between the two, an organization cannot carry out its organizational functions safely and comfortably.
Example: Company A is located in Madura regency. the area is difficult to water and the soil is not fertile, so Company A must assist or assist in the construction of rainwater reservoirs and soil enrichment advice for residents around Company A.
3. Politics: In the business world, politics acts as a drafter or policy maker of the rules and ethics of governance of business organizations by the government. This rule must be followed by every business organization in order not to act arbitrarily.
Example: The East Java Provincial Government prepares amendments to the 2015 UMR that are adjusted to the standard of living in East Java. After graduating from school, the company is obliged to pay the salaries of employees set by the district government.
4. Economy: in the economic field, the company is obliged to play an active role in improving the economy of the population around the company, because for example work. . to citizens or help citizens.
Example: Kalbe Limited Liability Company opens new job vacancies for residents around the company and sets up cheap stalls so that local residents can sell food.
5. Technology: in today's era, a business company needs to keep up with the rapid development of technology, because it is used for the smooth production process of products.
Example: a company that produces cans using machines. to pack and fill drinks. can produce 10,000 cans per hour, more efficient and effective, but the shortcoming is human resources, because the company automatically reduces its workers because it is inefficient.
6. Nature: Nature is a gift of God, so if a company is going to establish its business in an area, then the company must maintain a balance between needs and natural resources used for production, so as not to be exploited too much.
Example: PT Fiber is a company engaged in the wood furniture industry. They have a production forest area where they get raw teak wood. They use a selective cutting system where only old teak trees are cut down. and after being cut down, the forest remains sustainable.
7. Legal : In business organizations, the law acts as a regulator of business ethics and protects the company before the law. In order to be able to do business comfortably, safely and in accordance with applicable ethics and morals.
Example: Indonesian Consumer Institute Foundation is a judicial body that regulates consumer protection, every company that produces a product must comply with the regulations issued by the Indonesian Consumer Institution Foundation.
Porter's Industrial Competition Model
Competitors Competitors at the level of industry competition
• Substitute Product: Is a substitution product issued by a company that matches the quality and quality of other companies' products, creating new products that are similar but not the same as others. Replacement products are usually marketed, but most of the buyers are middle and lower class, because companies create replacement products to replace products that are not affordable for all circles of society because the price of famous brand cellphones is getting more expensive and everyone is no longer affordable. Therefore, there appeared a Chinese mobile phone with almost the same features as a mobile phone from a well-known brand, but at a much cheaper price.
• Supplier: Supplier of raw materials and semi-finished products to the company that must maintain good relations, because in the absence of suppliers, the production of the existing company will not run perfectly, while the supplier will be paid according to the contract or agreement with the company.
Example: Limited Liability Company X is a fabric manufacturing company and also the sole supplier of Limited Liability Company Z, whose domain is clothing manufacturing. Limited Liability Company Z has a down payment agreement with Limited Liability Company X at the time of pick-up of the goods. At one time Limited Liability Company Z experienced financial problems that caused delays in payments to Limited Liability Company X, but according to the contract Limited Liability Company X temporarily stopped supplying cloth to Limited Liability Company Z.
• New entrant: A company that is just starting to operate and produce innovative products with products that are better than the products of established companies. because most new companies research and study other companies' products to find innovations in those products. Therefore, it must be taken into account when creating a product, so as not to compete with it later.
Example: Commanditaire Vennootschap Amanah is a producer of potato snacks, but the production and packaging process is still relatively traditional, until one day a new factory appeared near the site that also processed potatoes into snacks using more modern technology and packaging. Over time, consumers are increasingly interested in the factory's products and over time Commandite Vennootschap Amanah can no longer compete with factories.
• Buyer: The average buyer wants quality and affordable goods for the needs of life and lifestyle, so every business must attract buyers to consume or use its products. They need to be creative and always update information about what consumers like today and think about how to serve the consumers they need. from benefits and uses to product prices.
Resource Dependency Theory
Organizations can function properly by fulfilling only four dependencies, namely:
1. Contribution of information and equipment
The development of information and technology is currently progressing very quickly, and human resources are needed to adapt to keep up with these developments. To increase knowledge and not be outdated, on the job training is very necessary before becoming a permanent employee of the company.
For example: a noodle company with knowledge and equipment will create many new flavors to make. it is more attractive to customers and effectively and efficiently uses the technology that is currently being developed with the help of trained personnel.
2. Investment Capital
Participation capital or investor is financing used in the production process or an investor company. On the contrary, the company is looking for investors with the aim of obtaining funds for the development of its business, the income received by investors is part of the company's profits, the amount of which depends on the amount of capital invested.
Example: Mr. Amin uses personal capital for the company he founded, he is also looking for additional capital for investors so that his business can grow and the quantity of processed products is maximized in all processes.
3. Nutritional Raw Materials
A supplier is a business entity or individual that supplies raw materials necessary for the smooth production process of goods or services of the enterprise. Companies must be selective in choosing suppliers because the raw materials obtained from suppliers are used to produce high-grade and high-grade final products, because if the raw materials are of poor quality and low grade, then the products produced will also lose.
Example: A company is looking for the best raw material supplier, but at an affordable price, because good raw materials affect product quality.
4. Labor Input
Educated, disciplined and experienced human resources are one of the factors that many companies are looking for, but there are not many human resources, so in this advanced era, companies must be more selective in finding employees, so before joining. company, at least training or on the job training before becoming a permanent employee.
Example: Companies must look for human resources who have good abilities who can provide added value to the product because the product is made by experts so that the product produced is of high quality.
Organizations need these four inputs to work well if information/equipment inputs, capital inputs, raw material inputs and labor inputs are met, products are produced through distributors to consumers, which are then consumed by consumers.