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Mod-4 Analyzing Company’s Resources & Competitive Position
Types of Resources Tangible Resources
Relatively easy to identify, and include physical and financial assets used to create value for customers
Financial resources
Firm’s cash accounts Firm’s capacity to raise equity Firm’s borrowing capacity
Physical resources
Modern plant and facilities Favorable manufacturing locations State-of-the-art machinery and equipment
Types of Resources Tangible Resources
Relatively easy to identify, and include physical and financial assets used to create value for customers
Technological resources
Trade secrets Innovative production processes Patents, copyrights, trademarks
Organizational resources
Effective strategic planning processes Excellent evaluation and control systems
Types of Resources Tangible Resources Intangible Resources
Difficult for competitors (and the firm itself) to account for or imitate, typically embedded in unique routines and practices that have evolved over time
Human
Experience and capabilities of employees Trust Managerial skills Firm-specific practices and procedures
Types of Resources Tangible Resources Intangible Resources
Difficult for competitors (and the firm itself) to account for or imitate, typically embedded in unique routines and practices that have evolved over time
Innovation and creativity
Technical and scientific skills Innovation capacities
Reputation
Effective strategic planning processes Excellent evaluation and control systems
Types of Resources Tangible Resources Intangible Resources Organizational Capabilities
Competencies or skills that a firm employs to transform inputs to outputs, and capacity to combine tangible and intangible resources to attain desired end Outstanding customer service Excellent product development capabilities Innovativeness of products and services Ability to hire, motivate, and retain human capital
How Resources and Capabilities Lead to Advantages
Firm Resources and Sustainable Competitive Advantages Is the resource or capability… Valuable Rare Difficult to imitate
Difficult to substitute
Implications •
Neutralize threats and exploit opportunities
•
Not many firms possess
•
Physically unique
•
Path dependency
•
Causal ambiguity
•
Social complexity
•
No equivalent strategic resources or capabilities
Objectives of SWOT Analysis
To provide a framework to reflect o the organizational capability to avail opportunities or to overcome threats presented by the environment.
It presents the information about external and internal environment to structured form whereby key external opportunities
Analysis of the Company’s Present Strategies
SWOT Analysis
Value Chain Analysis
Benchmarking
Ethical Conduct
Critical Factors Considered
(1) What factors influence the durability of competitive advantage?
(2)Why do successful companies often lose their competitive advantage?
(3) How can companies avoid competitive failure and sustain their competitive advantage over time?
Pattern of SWOT Analysis High opportunities and high strengths. – Supports an aggressive strategy High opportunities and low strengths. – Turnaround oriented strategy High threats and high strengths. – Supports Diversification strategy High threats and low strengths. – Supports a Defensive strategy.
Objectives of SWOT Analysis
To provide a framework to reflect the organizational capability to avail opportunities or to overcome threats presented by the environment.
It presents the information about external and internal environment to structured form whereby key external opportunities
SWOT Analysis SWOT is an ellipsis for the internal Strengths and Weaknesses of a business and environmental Opportunities and Threats facing that business.
Meaning: SWOT analysis is a systematic identification of factors and the strategy that reflects the best match between them. It is based on the logic that an effective strategy maximizes a business’s strengths and opportunities and minimizes its weaknesses and threats. This simple assumption if accurately applied has powerful implications for successfully choosing and designing an effective study.
Strengths A strength is a resource, skill or other advantage relative to the competitors and the needs of the markets firm serves or anticipates serving. A strength is a distinctive competence that gives firm a comparative advantage in the marketplace. E.g. - financial resources - image - market leadership
Weaknesses A weakness is a limitation or deficiency in
resources, skills, and capabilities that seriously impedes effective performance. Eg: Facilities, financial resources, management capabilities, marketing skills, and brand image could be sources of weaknesses.
o
Aids in narrowing the choice of alternatives and selecting a strategy.
o
Distinct competence and critical weakness are identified in relation to key determinants of success for market segment.
Opportunities An opportunity is a major favorable situation in the firm’s environment. E.g. - identification of a previously unlooked market segment - changes in competitive or regulatory circumstances - technological changes
Threats A threat is a major unfavorable situation in the firm’s environment. It is a key obstacle to the firm’s current and/ or desired future position. E.g. - entrance of a new competitor - slow market growth - increased bargaining power of key buyers and suppliers Understanding the key opportunities and threats facing a firm helps manager identify realistic options from which to choose an appropriate strategy.
Value Chain Analysis
The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
A value chain is a chain of activities.
The value chain categorizes the generic value-adding activities of an organization.
The "primary activities" include: inbound logistics, operations (production), outbound logistics, marketing and sales, and services (maintenance).
The "support activities" include: administrative infrastructure management, human resource management, R&D, and procurement.
The concept has been extended beyond individual organizations. It can apply to whole supply chains and distribution networks.
Porter terms this larger interconnected system of value chains the "value system.“
Michel Porter’s - A useful tool for analyzing a firm’s strengths and weaknesses and understanding how they might translate into competitive advantage or disadvantage.
The Value Chain
The value chain is a business system concept, which was originally developed by McKinsey and Company and further developed and clarified by Porter.
This concept captures the idea that a firm is a series of functions (e.g. R&D, manufacturing, marketing, distribution etc.) and that each of these can be analyzed to determine ones own and the competitors’ strengths and weaknesses
Main aspects of Value Chain Analysis
Value chain analysis is a powerful tool for managers to identify the key activities within the firm which form the value chain for that organization, and have the potential of a sustainable competitive advantage for a company. Therein, competitive advantage of an organization lies in its ability to perform crucial activities along the value chain better than its competitors.
General administration Human resource management Technology development Procurement
Inbound logistics
Operations
Outbound logistics
Marketing and sales
Service
In order to conduct the value chain analysis, the company is split into primary and support activities
Primary value chain activities Primary ActivityDescription Inbound logistics: All those activities concerned with receiving and storing externally sourced materials Operations: The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)
Outbound logistics: All those activities associated with getting finished goods and services to buyers Marketing and sales Essentially: an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) Service: All those activities associated with maintaining product performance after the product has been sold
Support activities include Secondary ActivityDescription Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Management: Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business
Technology Development: Activities concerned with managing information processing and the development and protection of "knowledge" in a business Infrastructure Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management
Linkages within the Value Chain
Although value activities are the building blocks of competitive advantage, the value chain is not a collection of independent activities but a system of interdependent activities. Value activities are related by linkages within the value chain.
Linkages within the Value Chain
Linkages are relationships between the way one value activity is performed and the cost or performance of another. Linkages often reflect tradeoffs among activities to achieve the same overall result. For example a more costly product design, more stringent materials specifications, or greater in-process inspection may reduce service costs.
Linkages within the Value Chain
Linkages may also reflect the need to coordinate activities. On-time delivery, for example, may require coordination of activities in operations and service. The ability to coordinate linkages often reduces costs or enhances differentiation. Better coordination, for example can reduce the need for inventory throughout the firm.
Steps in Value Chain Analysis Value chain analysis can be broken down into a three sequential steps:
Break down a market/organization into its key activities under each of the major headings in the model.
Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage.
Determine strategies built around focusing activities where competitive advantage can sustained.
on be
Five step approach to competitor analysis
Identify the competitors
Identify what they want
Identify their strategy
Identify their strengths & weaknesses/relative capabilities
Predict what they will do.
MERITS
Value Chain Analysis provides a generic framework to analyze both the behavior of costs as well as the existing and potential sources of differentiation.
Porter emphasized the importance of regrouping functions into activities to produce, market, deliver and support products, to think about relationships between activities and to link the value chain to the understanding of an organization's competitive position.
•
The value chain made clear that an organization is multifaceted and that its underlying activities need to be analyzed to understand its overall competitive position.
•
The Value Chain model was intended as a quantitative analysis. It can also be used as a quick scan to describe the strengths and weaknesses of an organization in qualitative terms.
With the Value Chain Analysis, Porter tried to overcome the limitations of portfolio planning in multidivisional organizations.
The concept of Strategic Business Units stated that businesses within a conglomerate should act independently while headquarters should be responsible only for budgetary decisions to be based on a business unit's position in the overall portfolio
Porter used his Value Chain Analysis to identify synergies or shared activities between Strategic Business Units and to provide a tool to focus on the whole rather than on the parts.
DEMERITS
The quantitative analysis is time consuming since it often requires recalibrating the accounting system to allocate costs to individual activities.
. Porter provided qualitative guidance for a quantitative exercise. His analysis began with identifying the relevant activities that lead to competitive differences and are significant enough to influence the organization’s overall cost base.
The Value Chain Analysis should be accompanied with a customer segmentation analysis to mix the internal and external view. A feature or product provides the firm with a differentiating competitive advantage only if customers are willing to pay for it. Customer value chains need to be analyzed to determine where value is created.
The Value Chain is used to analyze a firm's position in relation to its direct competitors with the assumption that rivalry drives profitability. This excludes other assumptions such as customer bonding in Alexander Hax's delta model.
The Value Chain Analysis was developed to analyze physical assets in product environments. Other authors amended the model to accommodate intangible assets and service organizations
Limitations of Value Chain Analysis
One of the limitations of the value chain model is that it describes an industrial organization which essentially buys raw materials and transforms these into physical products.
The limitations of the model include the fact that ‘value’ for the final customer is the value only in its theoretical context and not practical terms.
The real value of the product is assessed when the product reaches the final customer, and any assessment of that value before that moment is only something that is true in theory. Despite this limitation, analysts can effectively use the value chain model to determine the value to the final customers in a theoretical way.
According to Porter, competitive advantage, and thus higher profits will result either from:
Differentiation of products and selling them at a premium price, OR
Producing products at a lower price than competitors
The two basic types of competitive advantage combined with the scope of activities for which the firm seeks to achieve these advantages results in three different types of strategy - cost leadership, differentiation and focus.
BENCH MARKING
Benchmarking is the tool that allows a company to determine whether the manner in which it performs particular functions and activities represent industry best practices when both cost and effectiveness are taken into account.
It is a point of reference against which performance is measured and compared.
In short, bench marking is:
Knowing your position or operation
Knowing the industry leaders or competitors
Incorporating the best practices
Gaining superiority.
Bench marking helps a company to know:
How materials are purchased?
How products are assembled?
How fast the company can get new product to market?
How the quality control function is performed?
How the customer orders are filled and shipped?
How employees are trained?
How payrolls are processed? And then making cross company comparisons of the costs of these activities.
Benefits of Benchmarking
It ensures best practices will be identified, which in turn assures appropriate improvement.
It provides a deeper understanding of the organisation’s process.
It stimulates the company to try some thing different.
Identify new technology
Types of Benchmarking
Internal benchmarking
External benchmarking
Functional benchmarking
Internal benchmarking
sharing of opinions between departments within the same organisation
External Benchmarking ●
Comparison with external organisations to discover new ideas, methods, products and services. The gap between internal and external practices displays the way where to change and if there is any need to change.
Functional benchmarking
Comparative research to seek worldclass excellence by comparing business performance not only against competitors but also against the best businesses operating in different industry
Ethical Conduct
Social Ethical Conduct
Economic Ethical Conduct
Managerial Ethical Conduct
Economic Ethical Conduct
Business has always been expected to vide employment for individuals and to meet consumer needs.
Society also expects firms to help reserve the environment, to sell safe products to treat their employees equitably and to be truthful with their customers in contributing to education, public health, public hygiene etc.
Social Ethical Conduct
Social responsibility refers to the expectations that business firms should serve both society and financial interests of the shareholders.
A firm’s stance on social responsibility can be a critical factor in making strategic decisions.
They are to be based on Ethical /Moral factors with a welfare view of all sections of the society.
Managerial Ethical Conduct
An individual’s responsibility to make business decisions that are legal, honest, moral and fair.
Managers involving in bribe keeping aside the Co’s interest and employee’s interest, suppression of facts, not transparent in their dealings etc, joining with competitor and acts of a traitor all causes serious damage to the Organization.
All acts towards Self interest is unethical.
Types of Resources Tangible Resources
Relatively easy to identify, and include physical and financial assets used to create value for customers
Financial resources
Firm’s cash accounts Firm’s capacity to raise equity Firm’s borrowing capacity
Physical resources
Modern plant and facilities Favorable manufacturing locations State-of-the-art machinery and equipment
Types of Resources Tangible Resources
Relatively easy to identify, and include physical and financial assets used to create value for customers
Technological resources
Trade secrets Innovative production processes Patents, copyrights, trademarks
Organizational resources
Effective strategic planning processes Excellent evaluation and control systems
Types of Resources Tangible Resources Intangible Resources
Difficult for competitors (and the firm itself) to account for or imitate, typically embedded in unique routines and practices that have evolved over time
Human
Experience and capabilities of employees Trust Managerial skills Firm-specific practices and procedures
Types of Resources Tangible Resources Intangible Resources
Difficult for competitors (and the firm itself) to account for or imitate, typically embedded in unique routines and practices that have evolved over time
Innovation and creativity
Technical and scientific skills Innovation capacities
Reputation
Effective strategic planning processes Excellent evaluation and control systems
Types of Resources Tangible Resources Intangible Resources Organizational Capabilities
Competencies or skills that a firm employs to transform inputs to outputs, and capacity to combine tangible and intangible resources to attain desired end Outstanding customer service Excellent product development capabilities Innovativeness of products and services Ability to hire, motivate, and retain human capital
How Resources and Capabilities Lead to Advantages
Firm Resources and Sustainable Competitive Advantages Is the resource or capability… Valuable Rare Difficult to imitate
Difficult to substitute
Implications •
Neutralize threats and exploit opportunities
•
Not many firms possess
•
Physically unique
•
Path dependency
•
Causal ambiguity
•
Social complexity
•
No equivalent strategic resources or capabilities
Objectives of SWOT Analysis
To provide a framework to reflect o the organizational capability to avail opportunities or to overcome threats presented by the environment.
It presents the information about external and internal environment to structured form whereby key external opportunities
Analysis of the Company’s Present Strategies
SWOT Analysis
Value Chain Analysis
Benchmarking
Ethical Conduct
Critical Factors Considered
(1) What factors influence the durability of competitive advantage?
(2)Why do successful companies often lose their competitive advantage?
(3) How can companies avoid competitive failure and sustain their competitive advantage over time?
Pattern of SWOT Analysis High opportunities and high strengths. – Supports an aggressive strategy High opportunities and low strengths. – Turnaround oriented strategy High threats and high strengths. – Supports Diversification strategy High threats and low strengths. – Supports a Defensive strategy.
Objectives of SWOT Analysis
To provide a framework to reflect the organizational capability to avail opportunities or to overcome threats presented by the environment.
It presents the information about external and internal environment to structured form whereby key external opportunities
SWOT Analysis SWOT is an ellipsis for the internal Strengths and Weaknesses of a business and environmental Opportunities and Threats facing that business.
Meaning: SWOT analysis is a systematic identification of factors and the strategy that reflects the best match between them. It is based on the logic that an effective strategy maximizes a business’s strengths and opportunities and minimizes its weaknesses and threats. This simple assumption if accurately applied has powerful implications for successfully choosing and designing an effective study.
Strengths A strength is a resource, skill or other advantage relative to the competitors and the needs of the markets firm serves or anticipates serving. A strength is a distinctive competence that gives firm a comparative advantage in the marketplace. E.g. - financial resources - image - market leadership
Weaknesses A weakness is a limitation or deficiency in
resources, skills, and capabilities that seriously impedes effective performance. Eg: Facilities, financial resources, management capabilities, marketing skills, and brand image could be sources of weaknesses.
o
Aids in narrowing the choice of alternatives and selecting a strategy.
o
Distinct competence and critical weakness are identified in relation to key determinants of success for market segment.
Opportunities An opportunity is a major favorable situation in the firm’s environment. E.g. - identification of a previously unlooked market segment - changes in competitive or regulatory circumstances - technological changes
Threats A threat is a major unfavorable situation in the firm’s environment. It is a key obstacle to the firm’s current and/ or desired future position. E.g. - entrance of a new competitor - slow market growth - increased bargaining power of key buyers and suppliers Understanding the key opportunities and threats facing a firm helps manager identify realistic options from which to choose an appropriate strategy.
Value Chain Analysis
The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
A value chain is a chain of activities.
The value chain categorizes the generic value-adding activities of an organization.
The "primary activities" include: inbound logistics, operations (production), outbound logistics, marketing and sales, and services (maintenance).
The "support activities" include: administrative infrastructure management, human resource management, R&D, and procurement.
The concept has been extended beyond individual organizations. It can apply to whole supply chains and distribution networks.
Porter terms this larger interconnected system of value chains the "value system.“
Michel Porter’s - A useful tool for analyzing a firm’s strengths and weaknesses and understanding how they might translate into competitive advantage or disadvantage.
The Value Chain
The value chain is a business system concept, which was originally developed by McKinsey and Company and further developed and clarified by Porter.
This concept captures the idea that a firm is a series of functions (e.g. R&D, manufacturing, marketing, distribution etc.) and that each of these can be analyzed to determine ones own and the competitors’ strengths and weaknesses
Main aspects of Value Chain Analysis
Value chain analysis is a powerful tool for managers to identify the key activities within the firm which form the value chain for that organization, and have the potential of a sustainable competitive advantage for a company. Therein, competitive advantage of an organization lies in its ability to perform crucial activities along the value chain better than its competitors.
General administration Human resource management Technology development Procurement
Inbound logistics
Operations
Outbound logistics
Marketing and sales
Service
In order to conduct the value chain analysis, the company is split into primary and support activities
Primary value chain activities Primary ActivityDescription Inbound logistics: All those activities concerned with receiving and storing externally sourced materials Operations: The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)
Outbound logistics: All those activities associated with getting finished goods and services to buyers Marketing and sales Essentially: an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) Service: All those activities associated with maintaining product performance after the product has been sold
Support activities include Secondary ActivityDescription Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Management: Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business
Technology Development: Activities concerned with managing information processing and the development and protection of "knowledge" in a business Infrastructure Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management
Linkages within the Value Chain
Although value activities are the building blocks of competitive advantage, the value chain is not a collection of independent activities but a system of interdependent activities. Value activities are related by linkages within the value chain.
Linkages within the Value Chain
Linkages are relationships between the way one value activity is performed and the cost or performance of another. Linkages often reflect tradeoffs among activities to achieve the same overall result. For example a more costly product design, more stringent materials specifications, or greater in-process inspection may reduce service costs.
Linkages within the Value Chain
Linkages may also reflect the need to coordinate activities. On-time delivery, for example, may require coordination of activities in operations and service. The ability to coordinate linkages often reduces costs or enhances differentiation. Better coordination, for example can reduce the need for inventory throughout the firm.
Steps in Value Chain Analysis Value chain analysis can be broken down into a three sequential steps:
Break down a market/organization into its key activities under each of the major headings in the model.
Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage.
Determine strategies built around focusing activities where competitive advantage can sustained.
on be
Five step approach to competitor analysis
Identify the competitors
Identify what they want
Identify their strategy
Identify their strengths & weaknesses/relative capabilities
Predict what they will do.
MERITS
Value Chain Analysis provides a generic framework to analyze both the behavior of costs as well as the existing and potential sources of differentiation.
Porter emphasized the importance of regrouping functions into activities to produce, market, deliver and support products, to think about relationships between activities and to link the value chain to the understanding of an organization's competitive position.
•
The value chain made clear that an organization is multifaceted and that its underlying activities need to be analyzed to understand its overall competitive position.
•
The Value Chain model was intended as a quantitative analysis. It can also be used as a quick scan to describe the strengths and weaknesses of an organization in qualitative terms.
With the Value Chain Analysis, Porter tried to overcome the limitations of portfolio planning in multidivisional organizations.
The concept of Strategic Business Units stated that businesses within a conglomerate should act independently while headquarters should be responsible only for budgetary decisions to be based on a business unit's position in the overall portfolio
Porter used his Value Chain Analysis to identify synergies or shared activities between Strategic Business Units and to provide a tool to focus on the whole rather than on the parts.
DEMERITS
The quantitative analysis is time consuming since it often requires recalibrating the accounting system to allocate costs to individual activities.
. Porter provided qualitative guidance for a quantitative exercise. His analysis began with identifying the relevant activities that lead to competitive differences and are significant enough to influence the organization’s overall cost base.
The Value Chain Analysis should be accompanied with a customer segmentation analysis to mix the internal and external view. A feature or product provides the firm with a differentiating competitive advantage only if customers are willing to pay for it. Customer value chains need to be analyzed to determine where value is created.
The Value Chain is used to analyze a firm's position in relation to its direct competitors with the assumption that rivalry drives profitability. This excludes other assumptions such as customer bonding in Alexander Hax's delta model.
The Value Chain Analysis was developed to analyze physical assets in product environments. Other authors amended the model to accommodate intangible assets and service organizations
Limitations of Value Chain Analysis
One of the limitations of the value chain model is that it describes an industrial organization which essentially buys raw materials and transforms these into physical products.
The limitations of the model include the fact that ‘value’ for the final customer is the value only in its theoretical context and not practical terms.
The real value of the product is assessed when the product reaches the final customer, and any assessment of that value before that moment is only something that is true in theory. Despite this limitation, analysts can effectively use the value chain model to determine the value to the final customers in a theoretical way.
According to Porter, competitive advantage, and thus higher profits will result either from:
Differentiation of products and selling them at a premium price, OR
Producing products at a lower price than competitors
The two basic types of competitive advantage combined with the scope of activities for which the firm seeks to achieve these advantages results in three different types of strategy - cost leadership, differentiation and focus.
BENCH MARKING
Benchmarking is the tool that allows a company to determine whether the manner in which it performs particular functions and activities represent industry best practices when both cost and effectiveness are taken into account.
It is a point of reference against which performance is measured and compared.
In short, bench marking is:
Knowing your position or operation
Knowing the industry leaders or competitors
Incorporating the best practices
Gaining superiority.
Bench marking helps a company to know:
How materials are purchased?
How products are assembled?
How fast the company can get new product to market?
How the quality control function is performed?
How the customer orders are filled and shipped?
How employees are trained?
How payrolls are processed? And then making cross company comparisons of the costs of these activities.
Benefits of Benchmarking
It ensures best practices will be identified, which in turn assures appropriate improvement.
It provides a deeper understanding of the organisation’s process.
It stimulates the company to try some thing different.
Identify new technology
Types of Benchmarking
Internal benchmarking
External benchmarking
Functional benchmarking
Internal benchmarking
sharing of opinions between departments within the same organisation
External Benchmarking ●
Comparison with external organisations to discover new ideas, methods, products and services. The gap between internal and external practices displays the way where to change and if there is any need to change.
Functional benchmarking
Comparative research to seek worldclass excellence by comparing business performance not only against competitors but also against the best businesses operating in different industry
Ethical Conduct
Social Ethical Conduct
Economic Ethical Conduct
Managerial Ethical Conduct
Economic Ethical Conduct
Business has always been expected to vide employment for individuals and to meet consumer needs.
Society also expects firms to help reserve the environment, to sell safe products to treat their employees equitably and to be truthful with their customers in contributing to education, public health, public hygiene etc.
Social Ethical Conduct
Social responsibility refers to the expectations that business firms should serve both society and financial interests of the shareholders.
A firm’s stance on social responsibility can be a critical factor in making strategic decisions.
They are to be based on Ethical /Moral factors with a welfare view of all sections of the society.
Managerial Ethical Conduct
An individual’s responsibility to make business decisions that are legal, honest, moral and fair.
Managers involving in bribe keeping aside the Co’s interest and employee’s interest, suppression of facts, not transparent in their dealings etc, joining with competitor and acts of a traitor all causes serious damage to the Organization.
All acts towards Self interest is unethical.
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