Five Steps that Comprise an effective framework Essay

Five Steps that Comprise an effective framework - Essay Example Therefore, the organization must respond to any opportunity or threat coming on the way. Nevertheless, it can only do that by doing an environmental scanning to research those factors. The external factors include social cultural, environmental, technological, political, economic, and legal factors (Bhandari, 2013). The organization needs to comprise an effective framework when conducting the matrix to ensure that the strategic tool is efficient enough. The organization must follow the right procedure to avoid mathematical or any ignorance or negligence mistake that may end up costing the organization. This is because the matrix is the key of reference when the organization is undertaking any project that requires large amount of capital to start and run and it is of high risks (Lodato, 2014). This matrix will help in analyzing the effect of the external factors and how the organization can respond to them; increase rate of return and reduce, avoid or eliminate the risks. Therefore, the organization must follow the following steps in constructing an effective, efficient, and a reliable EFE matrix: Firstly, the organization should summarize, analyze, and evaluate the external factors that portray themselves as opportunities or threats. For instance, it has to consider the social factors like the age of the population, the cultural beliefs, gender, the level of literacy and so many others. Additionally, it needs to list the economic factors that may include interest rates, foreign exchange rates, level of completion, economic growth, economies of scale, rate of savings and investments. Others include the customer’s disposable income and trends in the stock market. It has to list the political and legal factors that affect the organization like government rules and policies, globalization trends, government subsidies, regulations in international trade, the rate of taxation and so many others. It must include all the environmental factors