Internal environment:
- The internal environment is the environment that has a direct impact on the business.
- The internal forces are things that occur within the organization and are by-and-large under the control of the organization. These effects the way the organization operates in either a positive or negative way.
- It is the conditions, entities, events, and factors within an organization that influence its activities, choices, and particularly the behavior of the employees.
- The internal environment encompasses everything that is “inside” the business.
- These are the variables over which the business has the highest degree of control, and therefore these are the things about which the most direct decisions can be made.
- The internal business environmental factors are best viewed as the extent to which resources, and the ability to deploy them, will generate and sustain competitive advantage.
Here there are some internal factors which are: Owners/ shareholder, Board of directors, Employees/ unions, corporate culture, Structure, Rules and regulations.
- Employees/ Human Resources: The human resource is the important factor for any organization as it contributes to the strength and weakness. The human resource in an organization must have characteristics like skills, quality, high morale, commitment towards the work, attitude, etc. There are many different types of employees who work with a discrete set of skills, and they will also have expectations about what the organization should do for them, and the manner in which the organization should “behave”. This can create significant pressure, and will ultimately help to shape the direction that the organization must take. The involvement and initiative of the people in an organization at different levels may vary from organization to organization. The organizational culture and overall environment have bearing on them.
- Shareholders: The shareholders are the people who own a publicly listed, large scale organization. These people will hope that the organization can assist in maximizing their wealth. This could be through dividends (the distribution of the company’s profits), or by capital gain (an increase in the value of the shares due to the strong performance of the company). A company can only set the price of its shares during the initial public offering, after that it is up to free market forces to determine the price. On the other hand, the managers of the business will have very strong input into the dividend that is paid to shareholders. The final figure must be approved by the people who own the shares (after all, they do own the business!), but standard practice is for the meeting of shareholders to ratify the amount that is suggested by the board of directors. The shareholders have right to choose some members for BOD too.
- The Board of Directors: the board is the management level who works in the best interest of the shareholders. So, business is influence greatly by their decision. The BOD is a part of the internal environment of the business. This is significant because it suggests that appropriate governance procedures must be put in place by BOD to ensure that the people who manage the business remain accountable to the other stakeholders that are involved.
- The Organizational Structure: It is the hierarchical arrangement of various positions which have check and balance system. It establishes the relationship among various position through delegation of responsibility, authority and accountability. The structure of the organization also influences the business decisions. The organizational structure like the composition of board of directors influences the decisions of business as they are internal factors. The structure and style of the organization may delay a decision making or some other helps in making quick decisions. The choice of structure will affect the performance of the business, and as such it is a significant internal variable that can be controlled.
- The Corporate Culture: The culture of an organization is typically described as the values and beliefs that are shared by the internal stakeholders. These things will help to shape the decisions that are made. For example, if a business places a high value on its environmental impact, then decisions will be made to ensure that this is minimized. This will filter down through all levels of the organization. The culture of a large scale organization can be changed, although this can take an extremely long time. Despite this it should still be considered a variable in the internal environment; if the business will benefit through a change to the corporate culture, then the change should be pursued.
- Internal power relationships: The relationship among the three levels of the organization also influences on the business. The mutual co-ordination among those three is an important need for a business. The relationship among the people working in the three levels of the organization should be cordial.
- Company image and brand equity: The image of the company in the outside market has the impact on the internal environment of the company. It helps in raising the finance, making joint ventures , other alliances, expansions and acquisitions , entering sale and purchase contracts , launching new products, etc. Brand equity also helps the company in same way
- Labor union: A trade union is an organization of workers who have banded together to achieve common goals such as protecting the integrity of its trade, achieving higher pay, increasing the number of employees an employer hires, and better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labor contracts (collective bargaining) with employers. The most common purpose of these associations or unions is "maintaining or improving the conditions of their employment".
The conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeletean orginazation has several forces operating within its internal system..these forces together shapes the internal environment.....
ReplyDeleteThe conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeleteTechnology
The more up-to-date your computers, software, phone systems, faxes and copy machines, the more efficient and productive your staff will be. Solicit input from your staff regarding what tools they feel will help them perform better. In addition to keeping current with technology, keep your employees trained in using what you provide them. From time to time, look at the equipment you use to make your product and determine if new machinery can help you manufacture quicker, with higher quality and at a lower cost than you are now.
Capital
One reason many small businesses fail is a lack of adequate capital. For example, you might have good sales but slow receivables. If you don’t have adequate cash reserves or access to credit to pay your bills while you wait for customers to pay invoices, you might lose access to your suppliers, have to cut back on marketing or take out costly loans to make payroll. Work with your financial manager to create internal controls that help you maintain adequate working capital.
Corporate Governance
Internally, an organisation consists of Top Management and a Board of Directors who act as internal mechanisms. Top management’s responsibilities are to provide executive leadership and vision and manage the strategic planning process. The Board of Directors on the other hand must monitor top management, evaluate them, and formulate strategy. Every board of directors has five responsibilities;
1. Setting corporate strategy, overall direction, mission or vision
2. Hiring and firing the CEO and top management
3. Controlling, monitoring, or supervising top management
4. Reviewing and approving the use of resources
5. Caring for Shareholder interests.
The internal environment is the forces that has the direct affect on the business and the way of operating the organization. This environment includes everything within the environment. There are some internal factors that help to extent resources ,utilize them, generate them effectively. These factors are employees/ human resources, shareholders, board of directors, organizational structure, the corporate culture, internal power relationship, company image and brand euity and labour union.
ReplyDeleteInternal Environment
ReplyDeleteInner strengths and weaknesses that an organization exhibits. Internal factors can strongly affect how well a company meets its objectives.
Some of the internal environments affecting business environments are(i have mentioned the one that are not here):
1.Employees
The caliber, attitude and work ethic of a company's employees are internal issues. Finding people qualified for the job and training them appropriately are other employment-related issues. The quality of employees affects the company's ability to innovate, customer satisfaction, productivity and efficiency.
2.Capital
A small pizza restaurant would love to install the most expensive, cutting-edge wood oven to create quality pies. Like all businesses, though, the restaurant must temper its wants with its available resources. A significant internal factor businesses must consider is the quality of their capital with respect to their available money.
3.Cash Flow
How well a company allocates its cash is an internal business issue. Cash flow refers to a company's ability to generate income and pay its bills as they come due. Businesses can jeopardize their cash flow by investing too much money in operations.
Internal environment includes all those factors which influence business and which are present within the business itself. These factors are usually under the control of business.
ReplyDeleteInternal factors of a business organization may include (i) Objectives of Business, (ii) Policies of Business, (iii) Production Capacity, (iv) Production Methods, (v) Management Information System, (vi) Participation in Management, (vii) Composition of Board of Directors, (viii) Managerial Attitude, (ix) Organisational Structure, (x) Features of Human Resource, etc.
As we know , organization also have an internal environment that consists of their owners, board of directors, employees, physical work environment , and culture.
ReplyDeleteInternal factors that affect a business are the employees, the environment and how the work is going within the company. If things are going well, then the business is going well. If not, they are going bad.
ReplyDeleteInternal factors:
Technology. lLgal issues. Global Environment. Economic Factors. Cultural and Social Environment. These are ALL of the external and internal factors affecting a business. There are
Internal environment of an organization may refes to the conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeleteInternal Environment
ReplyDeletean organization has several forces operating within its internal system. these forces together shape the interal environment. an organization's internal environment hsa the following components:
employees-it is the vital part and importanat asset of an orgtanization. though they are insiders of the organization, they are an important source of external information. without the cooperation of employees of employees and their productivity, organizations cannot attain their expected goals.
structure-it is the overall framework for organizational roles, rules, hierarchy, relations and aurhority.
corporate culture-every organization has its own culture. members of an organization hold two principal types of assumption in common: beliefs and values. it has a powerful influence on the process of organizational change and decision-making.
shareholders-they being the owners of business have a direct interest in the performance of the organization. the directors elected by them represent their interest in the board. the shareholders expect to get full information from the management on the functioning and financial status of the organization at regular intervals.
unions-labour unions represent the problems and feelings of their members to management.
he internal environment consists of the organization's owners, board of directors, employees, physical environment, and culture. Owners are those who have property rights claims on the organization. The board of directors, elected by stockholders, is responsible for overseeing a firm's top managers. Individual employees and the labor unions they sometimes join are other important parts of the internal environment. The physical environment, yet another part of the internal environment, varies greatly across organizations.
ReplyDeleteThe conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeleteorginazation has several forces operating within its internal system..these forces together shapes the internal environment.Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeleteThe internal environment is the forces that has the direct affect on the business and the way of operating the organization. This environment includes everything within the environment.
ReplyDeleteFactors:
1.organizational goals
2.organizational structure
3.organizational policies and strategies
4.organizational culture
5.functional activities
The conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeleteIf there is anything that is steadfast and unchanging, it is change itself. Change is inevitable, and organizations that don't accept change and that make adjustments to their business model based on changes are doomed to fail. There are events or situations that occur that affect the way a business operates, in a positive or negative way. These events or situations can have either a positive or a negative impact on a business and are called 'environmental factors.'
ReplyDeleteThere are two types of environmental factors: internal environmental factors and external environmental factors. Internal environmental factors are events that occur within an organization. Generally speaking, internal environmental factors are easier to control than external environmental factors. Some examples of internal environmental factors are as follows:
Management changes
Employee morale
Culture changes
Financial changes and/or issues
internal environment:
ReplyDeleteThe conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
A) VALUE SYSTEM
The value system of the founders and those at the helm of affairs has important bearing on the choice of business, the mission and the objectives of the organization, business policies and practices.
B) MISSION,VISION AND OBJECTIVES
Vision means the ability to think about the future with imagination and wisdom. Vision is an important factor in achieving the objectives of the organization. The mission is the medium through which the objectives are achieved.
C) Management structure and nature
The structure of the organization also influences the business decisions. The organizational structure like the composition of board of directors , influences the decisions of business as they are internal factors . The structure and style of the organization may delay a decision making or some other helps in making quick decisions.
Internal environment includes all those factors which influence business and which are present within the business itself. These factors are usually under the control of business.
ReplyDelete• Internal factors of a business organization are:
-Objectives of Business
-Policies of Business
- Production Capacity,
-Production Method
- Management Information System
- Participation in Management
-Composition of Board of Directors
-Managerial Attitude
-Organizational Structure
-Features of Human Resource,etc.
The internal environment is the forces that has the direct affect on the business and the way of operating the organization. This environment includes everything within the environment.
ReplyDeleteFactors:
1.organizational goals
2.organizational structure
3.organizational policies and strategies
4.organizational culture
5.functional activities
The conditions, entities, events, and factors within an organization that influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.
ReplyDeleteThe internal environment is the forces that has the direct affect on the business and the way of operating the organization. This environment includes everything within the environment.
ReplyDeleteFactors:
1.organizational goals
2.organizational structure
3.organizational policies and strategies
4.organizational culture
5.functional activities