CORPORATE STRATEGY

Prof (Maj Gen) Mohammad Quamruzzaman

CORPORATE INTERNAL ENVIRONMENT

or
BUSINESS INTERNAL ENVIRONMENT

The concept of an internal environment was first proposed by the

French Physiologist Claude Bernard (181378), who stated that
maintenance of a constant and favourable internal environment was
necessary for the survival of an organism in a varying external
environment
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Academic Year 2015, Fall Semester
CORPORATE INTERNAL ENVIRONMENT

or

INTERNAL ENVIRONMENT OF BUSINESS

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CORPORATE INTERNAL ENVIRONMENT

Internal environment factors:

The internal business environment comprises of
factors within the company which impact the
success and approach of operations. Unlike the
external environment, the company has control
over these factors.
Managing the internal factors efficiently and
optimally plays an important role in achieving
corporate / business mission and vision.
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CORPORATE INTERNAL ENVIRONMENT

Examples of internal environmental factors:

Management and Leadership

Employees Moral and Morale
Organizational Culture
Finance and Accounts
Internal Audit
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CORPORATE INTERNAL ENVIRONMENT
Corporate Management and Leadership: The role of
company leadership is an important internal business
factor. Ones leadership style and the styles of other
company management people impact organizational
culture. The positive or negative nature, level of family-
friendliness, effectiveness of communication and value
of employees are cultural implications that result from
leadership approaches. Companies often provide
formal structure or direction with mission and vision
statements. These forward-looking statements provide
the company for business decisions and activities.
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CORPORATE INTERNAL ENVIRONMENT

Employees Moral and Morale: The strength of company

employees is another crucial internal business factor.
Motivated, hard-working and talented workers generally
produce better results than unmotivated, less-talented
employees. The business processes and relationships
within and between departments and employees also
significantly impact business effectiveness and efficiency.
In a high-performing workplace, employees not only have
talent, but they work well together and collaborate on
ideas and resolutions.
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CORPORATE INTERNAL ENVIRONMENT

Corporate Organizational Culture is a system of

shared assumptions, values, and beliefs, which
governs how people behave in organizations. These
shared values have a strong influence on the people in
the organization and dictate how they dress, act, and
perform their jobs. Every organization develops and
maintains a unique culture, which provides guidelines
and boundaries for the behavior of the members of
the organization.
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Finance and Accounts: Company's financial and capital structures and
operating profit and loss positions concern balance sheet, income statement and
cash flow statements. These affects business internal environment.

Assets = Liabilities + Equities

Income = Revenues - Expenses

Financial structure refers to the balance between all of the company's liabilities and
its equities. It thus concerns the entire Liabilities + Equities side of the balance
sheet.
Capital structure, by contrast, includes equities and only the long term liabilities. It
refers to the makeup of the company's underlying value.
Comparison of companys debts to equities, sensitive to internal environment as
reflected in long and short term liabilities, working capital, cash flow, salaries
payable, accounts payable, taxes payable etc.
Top and bottom lines of income statement, important on employees morale that
signify companys current state of affairs and future sustainability.
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CORPORATE INTERNAL ENVIRONMENT

Internal Audit measures a company's legal and ethical

compliance with external and internal standards. Internal
audit identifies potential noncompliance issues so the
business takes corrective action without involving
regulators. An organization may need an audit department
or an audit committee to conduct an internal audit. With an
audit checklist, a business owner can regularly validate the
company's compliance with its policies and procedures.
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CORPORATE INTERNAL ENVIRONMENT