The term ‘internal business environment’ refers to those aspects that organisations can control. This environment consists of factors within the company which impact the success and approach of operations.
Owners as well as leaders do have a great influence over internal factors that affect a business. How they decide to handle these internal factors will have a major impact on the future of their companies.
The Value System
The term ‘value system of an organisation’ means the ethical beliefs that guide the organisation in achieving its mission and objective. The value system of a business also determines its behaviour towards its employees, customers in addition to the society at large.
The value system that the promoters of a business hold has an important bearing on the choice of business as well as the adoption of business policies and practices.
Mission And Objectives
‘Mission’ is defined as the overall purpose or reason for existence of the organisation which guides and influences its business decisions and economic activities. The choice of a business domain, the direction of its development, the choice of a business strategy and policies are all directed by the overall mission of the company.
The term ‘organisational structure’ refers to such aspects such as composition of board of directors, the number of independent directors as well as the extent of professional management and share-holding pattern. The kind of organisational structure has a significant influence over decision-making process in an organisation. The efficient working of a business requires that its organisational structure should be conducive to quick decision-making. Delays in making decisions can cost a good deal.
The board of directors is the top-most decision-making body in a business. It takes general policy decisions regarding the direction of the growth in addition to supervising its overall functioning. This means that the managerial capability of the board of directors is of crucial importance for the functioning of a business and for the achievement of its overall mission and objectives.
The quality of employees (i.e. human resources) of a firm is an important factor in the internal environment of a firm. The success of a business depends – to a great extent – on the skills, capabilities, attitudes and commitment of its employees. Employees differ with regard to these characteristics.
A business needs innovation in order to keep pace with competitors. It is vital to get one step ahead of them. Innovation could come in the format of marketing. It could also be through:
- Promotional ideas in the marketing plan,
- Staff training, as well as
Adopting new technology is the best way for you to keep up with technological advancements. In addition, a lack of innovation can pose a serious risk to a growing business as no innovation will cause a company to stay stagnant.
‘Technology’ refers to the systems and machinery that are used in the running of a business, e.g. running an online business requires you to have a computer and an Internet connection.
Understanding the internal business environment is just one step in the sales management process.
Find out what these other steps are in our Sales Management Course. Find out more about this course here.
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