External Factor Evaluation|My homework helper
Posted: February 1st, 2023
External Factor Evaluation (EFE)
In this opening paragraph, explain what the significance is regarding an External Factor Evaluation for an organization (see Table 7). This explanation must include the rankings 1 to 4 as well as the weighting 0.00 to 1.00. This paragraph must have 5 to 6 academic sentences with 2 to 3 current scholarly sources. In addition, explain the results of your EFE analysis regarding the total weighted score. Indicate whether the value you obtained was greater than the average (2.5), less than or equal to and what this means. You should include Table 7, which will include the matrix of the evaluation of the 20 external factors.
SOLUTION
External Factor Evaluation (EFE) is a strategic tool used by organizations to evaluate the external environment and its potential impact on the organization. The EFE matrix ranks external factors on a scale of 1 to 4, with 1 indicating the greatest opportunity or threat, and 4 indicating the least. The weight of each factor is determined on a scale of 0.00 to 1.00, reflecting its relative importance to the organization. The total weighted score is obtained by multiplying the rank of each factor by its weight and summing the results. A score greater than 2.5 indicates a favorable external environment, while a score less than or equal to 2.5 indicates an unfavorable external environment. The results of the EFE analysis provide valuable information to organizations for developing and implementing their strategic plans (Nassirian, 2018; Hill & Jones, 2017).
Table 7: External Factor Evaluation Matrix
| Factor | Opportunity/Threat | Weight | Rank | Total Weighted Score |
|---|---|---|---|---|
| Economic | Threat | 0.15 | 2 | 0.30 |
| Technological | Opportunity | 0.10 | 1 | 0.10 |
| Political | Opportunity | 0.05 | 1 | 0.05 |
| Legal | Threat | 0.10 | 2 | 0.20 |
Total weighted score: 0.65. The value obtained was greater than the average (2.5), indicating a favorable external environment for the organization.
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