Any organization is a complex and dynamic socio-economic system that is, therefore, difficult to define. Analysis of the internal environment of a particular organization should be focused on identifying its potential capabilities to adjust to the external environmental components. Such assessment encompasses the variety of factors that determine the organization’s activity, including “owners, managers and leadership, employees, material resources, organizational culture” (Halmaghi et al. 378). More specifically, the key features and quality of the firm’s internal environment enable further utilization of the opportunities provided by the external environment of the organization. Both Dess with the colleagues and Halmaghi et al. define the organizational environment as the significant variable that should always be considered within strategic management.
Such an environment consists of critical resources and constraints, as well as cultural, political, and regulatory influences that are involved in its functioning. According to Halmaghi et al., it is commonly perceived that organizational culture is akin to the concept of the internal environment of an organization. However, the assessment of the internal environment of the firm also engages other elements within the organization’s structure, such as owners, managers and leadership, employees, and material resources. Evaluation of the organization’s internal environment is based upon the past and present of the enterprise, the current human resource, as well as technology and material resources. Furthermore, it is characterized by the goals, objectives, and values pervaded within the employees’ work ethic and philosophy. Each organization adopts a unique combination of these elements. Therefore, assessing the internal environment of the firm is crucial for identifying key factors that emphasize its uniqueness and contribute to the adjustable culture focused on innovation. As a result, the positive internal environment promotes a successful organization that can influence the competitive environment for its benefit.
Works Cited
Dess, Gregory, et al. Strategic Management: Text and Cases. 9th ed., McGraw-Hill Education, 2018.
Halmaghi, Elisabeta-Emilia, et al. “The Organization’s Internal Environment and Its Importance in the Organization’s Development.” International conference Knowledge-Based Organization, vol. 23, no. 1, 2017, pp. 378–381.