Organization Internal Environment
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The internal environment in an organization is composed of the features within the organization, including management, current employees and corporate culture, which describe employees’ behavior. Some aspects affect the organization as a whole while others affect only managers. A philosophical style directly affects employees. Traditional managers give explicit rules to employees, while current managers enhance employees to make their own decision (Heene, 2010).
Internal audit is a continuous and independent appraisal of all business activities of an entity which is aimed at safeguarding the assets, implementation of policies and efficient management of the organization. In strategic management, an internal audit considers the organization’s situation within its environment. This process is vital for development and maintaining a sustainable competitive benefit, and mostly comprises of distinct analytical tools, combination or at least one.
The gap analysis is one of the internal audits that determine the gap between the desired position and the current situation in the organization. For instance, a gap may arise between desired financial position and the current financial situation. This can be attributed to poor customer services and production. Regarding the measure and the cause, organizational managers come up with strategic goals designed to end the gap (Harrison & Shirom, 1999).
One of the main parts of the strategic management method is to classify the organization’s strength, weaknesses, opportunities and threats. Strength and weaknesses are branches of internal audit, while threats and opportunities are due to external influences. Strengths are those internal elements of the organization that a manager capitalizes on to develop stainable competitive benefit. Weaknesses include the internal stressors that misalign outfitted activities along the vision statement. These stressors range from noncompeting employees to machine failures. The SWOT needs all affiliates of the management, finance, research, development, production and other operational teams to be involved.
The assessment procedure can inform management of the strength within the organization that management needs to be granted. Assessments bring out the weaknesses with the organization that the management department acts upon when deciding the organization objectives. A properly carried out assessment should take into consideration the organization strength and weaknesses. The strategic audit undertaken by a consultant generally starts with an initial interview with the manager of the organization and his key advisors. The interview covers the entire company history information, a review of the organization, outputs and services offered. In addition, it also covers marketing system and the financial report (Pickett & Pickett, 2003).
Detailed interrogation sessions with the vital administration members covering all the operational areas within the organization then follow. The operation covered should include administration of the company, marketing and sales, personnel, operation and finance. SWOT consideration and recommendations of the company are developed at this juncture, reviewed with management personnel and finalized. The assessment procedures help to identify the substantial alternative for growth, retrenchment and expansion.
The organizations that expand their business without considering the vital, strategic alternative have incurred high prices for this decision. There are other ways of analyzing SWOT. Market research and accurate data system are vital for the SWOT determination to analyze the substantial factors in the environment.
Company environment consists of both internal factors and external factors. These factors help the leaders of a company to decide the future way of the company. Scanning must extract the chances and the pressures that exist in the environment. A company takes the benefit of opportunities and minimizes threats. A threat for one company perhaps is an opportunity for another one. Internal analysis of the environment is the primary action of the surrounding scanning. The company should take into consideration the internal organizational surrounding. This refers to the employers’ interaction with employees, workers’ interaction with the administration, manager communicating with others. In addition, it is concerned with the managers’ interaction with the shareholders, brand awareness, access to natural resources and the organization system (Migliore, 1995).
Other methods such as interviews, surveys and discussions can also be used to assess the internal environment. The analysis of internal surrounding aids to point out the strength and weaknesses of the company.
As the business grows, it becomes more competitive, and there are dramatic changes in the external surrounding. Data from the external environment adds vital aspects to the effectiveness of long term goals. If the environment is vibrant, it is necessary to identify competitors’ actions and moves. The company has to enhance the core competencies and internal surrounding as per external surroundings. The environmental aspects are infinite, and thus organization must be agile and vigil to comply with and adapt to the environmental changes. For example, monitoring might identify the initial forecast of the expenses of the raw resources that are used in products. This implies the need for more focused scanning, analysis and forecasting and to generate a supplementary trustworthy forecast about the input cost. In a similar way, there can be changes in aspects such as technology, preferences, market taste and competitors activities.
To identify the company’s competitive benefit and disadvantage, the following factors are put into consideration. These factors include assessment of the market situation and industry course, assess services and products of the company, assess the competitors and other types of industries and industry analysis are considered as well (Fleishe & Bensoussan 2007).