Discussion Thread: Internal Environment, Power / Weakness, and Decision Models
BUSI770
Dr. Jennifer Mize
Dahlia Thomas
School of Business, Liberty University
Nov 19, 2023
Author Note
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to .
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Introduction
From a financial perspective, the primary objective of companies is to generate profits to sustain
their operations. While establishing a business may seem straightforward, maintaining its
viability can prove challenging. Successful owners and managers must possess astute business
acumen and comprehend the intricacies of running an enterprise effectively. Often, individuals
become excessively fixated on monetary gains to demonstrate profitability and overall
competence within the business realm. However, it is crucial to recognize that money should
only serve as one component of the equation—a byproduct resulting from strategic endeavors to
achieve fiscal success—rather than being viewed as an organization's sole power source.
Consequently, there exists a widely held belief that competitive advantage represents the
exclusive pathway toward company triumphs; this notion compels leaders to relentlessly pursue
elusive strategies capable of yielding such outcomes. Unfortunately, amidst this fervent pursuit
of external solutions, they often overlook introspection—an internal evaluation process essential
for self-improvement—within their organizations. This paper will discuss how organizations
realize the internal environment can influence their overall strategy and the power/weakness
created by using or misusing their existing resources and capabilities.
Process of Evaluating the Internal Environment
Every entity, whether it be a team, organization, or nation, possesses unique advantages
in specific areas of competition and under certain circumstances (Rumelt, 2011). It is crucial for
these entities to fully comprehend and capitalize on their strengths to maintain an edge over
rivals. Failure to do so may result in competitors finding ways to circumvent the benefits that
have been established. Typically, when things are going smoothly within an organization, there is
little scrutiny regarding the methods employed for decision-making processes and operational
systems. However, leaders can find themselves making decisions solely driven by financial gain
without considering the potential consequences (Keller & Alsdorf, 2016). In some cases,
choosing ethically sound actions could lead to severe financial repercussions; thus, necessitating
a careful analysis of costs versus benefits before taking risks that may involve ethical violations
or strain relationships.
Challenging leadership guidance becomes more prevalent during turmoil when negative
end-of-quarter figures emerge as warning signs (Gamble et al., 2021). Ideally, a company should
focus its analytical efforts on enhancing business performance through customer service
excellence, value creation for employees, and adherence to ethical standards. The presence of a
moral compass aligned with strategic objectives greatly assists organizations in identifying
instances where unethical behavior occurs.
Accordingly, Gamble et al. (2021) assert that two key indicators determine how
effectively a company strategy operates: financial strength/profitability and competitive/market
standings relative to industry peers.
Key Source of Power or Weakness.
Organizations possess intangible resources that serve as valuable assets and capital under
their ownership and control. These intangible resources encompass a set of core values such as
collaboration, innovation, and trust, along with the organizational structure, systems, and
processes within the internal business environment. Their effective management contributes to
knowledge enhancement within an organization (Chen & Mohamed, 2008).
As technology advances alongside communication and market developments in
companies today, it becomes increasingly crucial to address the challenges associated with
maintaining professional boundaries. Amongst all available resources at an organization's
disposal stands its workforce - individuals who diligently execute strategies under positive
cultural norms; this creates a unique advantage over competitors (Gamble et al., 2021).
Intellectual property rights, brand recognition, image, reputation, and company culture are
additional factors through which organizations strengthen their capabilities for outperforming
rivals.
Each of these variables carries significant weight due to the power they bestow upon
organizations within their internal environments. The question arises: why do companies invest
effort into developing these potential resources? According to Keller & Alsdorf (2016), the
purpose lies in enhancing overall business performance. It proves beneficial for businesses by
bolstering reputation while also creating favorable long-term conditions. Integrity emerges as a
profitable attribute whereas dishonesty leads down an unfavorable path. Proverbs 20:17inThe
Holy Bible states, "Food gained by fraud tastes sweet, but one ends up with a mouth full of
gravel"(NIV).
Addressing weaknesses is paramount for organizations since other entities may exploit
vulnerabilities. Gamble et al.(2021) assert that managers must proactively rectify competitive
weaknesses that render a company susceptible, hinder profitability, or disqualify them from
pursuing attractive opportunities. Internal conflicts can dismantle an organization's foundation,
resulting in jeopardized tangible and intangible resource bases.
Decision Model
Leaders play a crucial role in diagnosing and understanding the underlying causes and
consequences of entropy and inertia within an organization. They must then formulate a sound
guiding policy to facilitate meaningful change (Rumelt, 2011, p. 203). Subsequently, leaders are
tasked with designing and implementing a coherent set of actions aimed at transforming both the
culture and power dynamics within the organization (Gamble et al., 2021).
Pinpointing specific areas that require management's attention catalyzes determining
appropriate action steps to enhance company performance and overall business prospects
(Gamble et al., 2021, p.82). The value of conducting SWOT analyses lies in their ability to
provide internal insights into an organization's current business standing while also serving as a
foundation for strategic decisions to leverage inherent strengths.
Furthermore, benchmarking is recognized as an invaluable tool that companies can
employ to optimize cost-effectiveness by identifying best practices associated with various
organizational activities (Gamble et al., 2021). In their research on sustainability-oriented firms'
innovativeness, Bhupendra et al. emphasized how benchmarking could pave the way for other
organizations to develop suitable strategies (Bhupendra et al., 2022).
Additionally, fostering sustainable technologies necessitates envisioning future markets
more effectively despite potential turbulence resulting from stakeholders' intricate expectations.
Companies should strive towards developing systems and processes that not only benefit internal
operations but ultimately yield superior outcomes externally as well.
While utilizing SWOT analysis provides foundational models for assessing internal
factors within organizations accurately; incorporating benchmarking initiatives complements this
process by establishing benchmarks based on industry-leading practices.
Conclusion and Recommendations
In conclusion, companies must adopt a more holistic perspective on business operations,
transcending the narrow focus on financial gains. Rather than perceiving monetary success as the
sole purpose of existence, leaders should recognize it as an outcome derived from collective
team efforts. A robust strategy should be built upon internal strengths and competencies,
leveraging them as pivotal assets in attracting customers and effectively competing with rivals
(Gamble et al., 2021). Embracing the team model concept becomes paramount in assessing the
suitability of individuals for specific projects, aligning skills with objectives, and evaluating
organizational capabilities (Krogerus & Tschäppeler, 2017). By introspectively examining
internal dynamics within their businesses through this approach, organizations can identify areas
requiring improvement and implement necessary changes to establish a cohesive strategy that
benefits the entire team.
References
Bhupendra, K. V., & Sangle, S. (2022). Benchmarking Organizational Innovativeness Types for
Sustainability: A study of Indian firms. Benchmarking : An International Journal, 29(2), 345-
364. https://doi.org/10.1108/BIJ-11-2020-0592
Chen, L., & Mohamed, S. (2008). Impact of the internal business environment on knowledge
management within construction organizations. Construction Innovation, 8(1), 61-81.
https://doi.org/10.1108/14714170810846521
Gamble, J., Peteraf, M., & Thompson, A. (2021). Essentials of Strategic Management,
McGrawHill Course Content Delivery (7th ed.) New York, NY.
Keller, T., Alsdorf, K. L. (2016). Every Good Endeavor: Connecting Your Work to God's Work.
Penguin Books, an imprint of Penguin Random House.
Krogerus, M., & Tschäppeler, R. (2017). The Decision Book: 50 models for strategic thinking.,
W.W. Norton & Co. (Revised ed.), New York, NY.
New International Version (NIV). Proverbs 20:17 6:33. (n.d.). Retrieved September 15, 2022,
from https://www.bible.com/bible/111/PRO.20.17.NIV
Rumelt, R. (2011). Good strategy/bad strategy: The difference and why it matters., Crown
Business, New York, NY.
Appendix
Annotated Bibliography
Bhupendra, K. V., & Sangle, S. (2022). Benchmarking Organizational Innovativeness Types for
Sustainability: A study of Indian firms. Benchmarking: An International Journal, 29(2),
345-364. https://doi.org/10.1108/BIJ-11-2020-0592
The main focus of the article is to examine how organizational sustainability can be
achieved through innovativeness, which in turn facilitates the development and
implementation of appropriate corporate strategies. However, it should be noted that
innovation carries a certain level of risk as it may not always be accepted by all
stakeholders involved (Bhupendra et al., 2022). The author emphasizes that companies
need to recognize the importance of adapting and driving innovation to thrive in a
constantly changing business environment. While innovation appears to be an ideal
solution for establishing sustainable practices within organizations, there is also the
possibility that these efforts may fall short of expectations. Bhupendra et al. (2022) argue
that sustainable firms typically possess forward-thinking and proactive strategies,
introduce disruptive innovative products and processes, and spearhead the emergence of
new markets. To gain a competitive advantage, companies can employ benchmarking
techniques to assess their internal factors effectively and establish boundaries for
improvement opportunities.
In addition, the implementation of performance standards serves as a crucial tool for
organizations to counteract any tendencies toward stagnation that may arise when teams
refrain from progressing within the organizational context. Benchmarking, being an
integral part of the internal dynamics, plays a pivotal role in fostering an environment
where members can establish safeguards and metrics to ensure efficient task completion
at minimal cost. Moreover, benchmarking provides organizations with avenues to
transform uncertainties into advantageous outcomes for their overall growth and
prosperity.
Chen, L., & Mohamed, S. (2008). Impact of the internal business environment on knowledge
management within construction organizations. Construction Innovation, 8(1), 61-81.
https://doi.org/10.1108/14714170810846521
The concept of knowledge management is often associated with the internal dynamics of
business environments, as it encompasses various fundamental principles such as collaboration,
innovation, trust, organizational structure, systems, processes, and interactions (Chen &
Mohamed 2008). It emerges from a strategic perspective that enables companies to foster
cohesion among different departments or divisions within an organization. By working together
towards a shared objective, organizations can effectively harness their internal potential and
mitigate any negative influences that may impede progress. Knowledge management serves as
the mechanism through which companies process inputs tailored to suit their specific internal
environment.
This study seeks to shed light on how the construction industry becomes reliant on its culture and
climate—a landscape largely shaped by significant changes in long-standing characteristics. The
article emphasizes that enterprise cultures must recognize the ability to adapt internal structures
and systems as crucial factors for successfully leveraging their knowledge resources (Chen &
Mohamed 2008). Furthermore, it highlights how intangible resources play a vital role within
organizations. When implemented correctly—both in construction businesses and other types of
