Internal environments are constructed by many variables and seeking to understand the internal factors must be a priority for leadership
Response 1
Minimum of 300 words in the body texts Content must include:
Summary of the author’s Main Thread – no less than 125 words
What you agreed with, did not agree with and why – no less than 125 words
Summary of the author’s Main Thread – no less than 125 words
What you agreed with, did not agree with and why – no less than 125 words
Minimum of 2 sources from the literature in addition to course
Krystal Hertenstein Top of Form
Discussion Board 4
As previously discussed, organizations must work to understand external factors in their industry. Another vital focus for an organization is to understand their own internal capabilities. Leaders must work to balance internal capabilities with the needs to match external efforts. Crafting a successful strategic plan for an organization will require both an internal and external understanding. The focus on understanding the internal environment starts with the ability to evaluate the internal environment and align the organization to a strategic thinking environment. Seeking goals for organizations through strategic planning starts with a view into internal capabilities evaluation.
Process: Internal Environment
Internal environments are constructed by many variables and seeking to understand the internal factors must be a priority for leadership. According to Gamble et al. (2019), there are five key questions that will need to be answered to evaluate the internal environment and dynamics of an organization. The five questions noted in the text work to uncover internal capabilities and seek to understand the internal focus and limits for an organization. A focus on key measures is a focus in order to measure how current strategy efforts are progressing. The effort spent on understanding current internal operations allows leaders to understand the current performance of internal efforts. The ability to understand the current state of internal capabilities can start with actions such as SWOT analysis to determine the viability of efforts. The five questions noted by Gamble et al., work to also seek information on how the company should price and a review of their products and services (2019). Organizations must focus on their own internal strategies that support their identified strengths while eliminating weaknesses. “The dynamic capabilities framework was created to help organize and prioritize the endless stream of competing and conflicting information that cascades toward managers as they attempt to build competitive advantage” (Teece, 2018, p. 363). Organizational leadership should then prioritize strategic goals to focus on; this can only be done by fully understanding the internal operating dynamics.
Strategic Thinking: Key Sources of Power/Weakness
Reviewed so far are the ways for organizations to understand their internal capabilities and dynamics, these efforts are a part of the strategic thinking and planning process. Strategic thinking is an important skill for leaders, as is it required to drive objectives towards creating competitive advantages. When companies can deliver the same product at a lower cost driver or deliver a product with more quality than competitors, then a reach for competitive advantage can be made (Rumelt, 2011, p. 163). With highly complex activities occurring in organizations, both internally and externally, the use of strategic thinking will ensure that all avenues are connected. Organizations must work to integrate strategic thinking into their operational model and plan to maintain a competitive advantage. When looking at differences in a competitive situation are those differences can be leveraged to gain a competitive edge (Rumelt, 2011, p. 160). All the effort is made to realize the internal capability is done to seek the power and weakness factors of an organization’s internal functions. “For example, insights about business processes can be used to improve their efficiency, productivity, accessibility, and availability, and even to transform business processes, information flows can be leveraged to create competitive advantage and dampen competition” (Grover et al., 2018, p. 392). The goal is to seek deficiencies in internal efforts and affect the company’s value proposition.
Decision Models : Internal Reviews
Reviewed is the need to gain internal insights and understand the capabilities of internal functions to support planning. Strategic decisions made by leadership is a process that starts with defining the capabilities of the organizations and planning needs and goals of the organization. The foundation of the decision models is based on the gathering of information and working on analyzing internal data. The gathering of internal information can be the intersection of aiding or hindering decisions for leaders. Having enough historical data and information that depict the overall internal is a requirement for leadership to understand internal conditions. Decision models that operate based on internal information require enough information to be present to review.
Conclusion
The value in strategic decision making by leadership starts with the information leadership can review. Evaluating the internal environment allows for analysis to occur so that leadership can view the strengths and weaknesses of internal functions. Internal functions seek to understand areas where products or services can gain value through internal changes or innovation. The goal is to seek competitive advantages through managing internal functions and resources wisely. The ability to learn about internal operations helps leaders design future objectives and build on strengths while avoiding weaknesses.
Response 2
Minimum of 300 words in the body texts Content must include:
Minimum of 2 sources from the literature in addition to course
Discussion Forum 4
Top of Form
Jason Brady
The internal environment is made up of the company resources, processes, values and culture within the organization. The company resources are made up of both tangible (e.g. physical and financial resources) and intangible resources (e.g. human assets and company culture) (Gamble, Peteraf, & Thompson, 2019). These resources are utilized by the organization to work towards their strategic objectives. Organizations have an advantage over competitors when that have resources or a suite of resources that are competitively valuable, rare, hard to copy, and sustainable (Gamble et al., 2019). The culture of an organization has a significant influence on the motivation of employees to work towards the company objectives and towards innovation. This post will discuss the process of evaluating the internal environment, employees as a sources of organization power, and decision models.
Process: Evaluating the Internal Environment
The internal environment is made up of the company resources and operations within the organization. The internal environment can have a significant impact on the success of an organization and their ability to achieve their strategic objectives. The internal environment is built off of the company’s foundation established in the first stage of strategy formulation. This includes developing the strategic vision, the mission statement, and core values (Gamble et al., 2019). The values include the beliefs, traits and behaviors company personnel are expected to uphold, and set the tone for the culture of the organization (Gamble et al., 2019). Through completion of a SWOT analysis the company can evaluate its internal environment, including identify its strengths to capitalize on and its weakness that need attention (Gamble et al., 2019).
The values of the organization need to be clearly communicated, reinforced and followed by the leaders of the organization. The 2016 Gallup poll noted that only 23 percent of employees say they can apply their company values to their daily work and 27 percent say they believe in the stated values (Vantrappen & de Jong, 2018). The perceived trustworthiness and ethical behavior of leaders by employees leads to improved company performance (Vantrappen & de Jong, 2018; Butler, Armstrong, Ellinger, & Franke, 2016). The behaviors of both the leaders and employees influence the culture within the organization. It is managements responsibility to determine how to motivate employees, but it is critical to have a strategy employees’ feel is worth their effort (Rumelt, 2011). Organizations who make investments in a positive internal environment including trust, commitment, passion, and community are associated with increased productivity and profit as a percentage of sales in comparison to their industry peers (Butler et al., 2016).
Strategic Thinking: Source of Power
Elements of the internal environment can impact the organizations sources of power or weakness. The employees of the organization can be identified as a both a source of power or weakness. This discussion will focus on employees as a source of power. Rumelt (2011) notes that advantage in strategy is based on the differences among rivals. One area where there are often differences is in the intangible resources of the company. The intangible resources include human assets, intellectual capital, brand image, reputational assets, relationships, and company culture (Gamble et al., 2019). The culture and treatment of employees can greatly impact the performance of an organization.
Firms that support a great working environment have experienced increases in employee satisfaction, customer satisfaction, productivity, and operating profits (Butler et al., 2016). From the employee perspective a great place to work includes a workplace where they trust the people they work for, have pride in their work, and have camaraderie with their coworkers (Butler et al., 2016). Employees’ attitude towards authority and their awareness of the company culture influences their willingness and ability to be able to be creative and innovative (Lui, 2017). Organizations that encourage learning and new ways of thinking are more likely to identify ways to address the challenges of change and competition, leading to growth of the organization (Lui, 2017; Rumelt, 2011). Rumelt (2011) states healthy growth comes from successful innovation, cleverness, efficiency, and creativity.
Key Decision Models
The use of decision models can aid or hinder the strategic decision-making process. Two models discussed by Krogerus and Tschäppeler (2018) that aid decision making process related to the internal environment are the Hersey-Blanchard Model and the Team Model. The Hershey-Blanchard Model helps managers assess the most successful leadership model for the situation at hand. Depending on the expertise and commitment level of employees, managers may attain greater success by adjusting their leadership style among four levels: instructing, coaching, supporting, and delegating (Krogerus & Tschäppeler, 2018). The Team Model is utilized to assess whether the organization has the people with the needed skills to achieve their strategic objectives or goals (Krogerus & Tschäppeler, 2018). The Team Model first determines the skills, expertise, and resources that are important to achieving the objectives. The members of the team are then evaluated based on these defined skills and strengths and weaknesses are identified (Krogerus & Tschäppeler, 2018). This process can help determine if the organization needs to attain different expertise or skill sets through additional hiring or internally through training.
Conclusion
During development of a business strategy, leaders need to consider the internal environment of an organization. The internal environment includes the company culture and the intangible and tangible resources. The culture of the organization can have a significant influence on the competitive advantage achieved through the value of human and intellectual capital within the organization. The culture of the organization is developed from the values, mission, and objectives of the organization, but more importantly through the examples set by the leaders (Gamble et al., 2019; Vantrappen & de Jong, 2018). A positive culture creates a workplace where employees trust their leaders, find work motiving, and enjoy comradery with others (Butler et al., 2016). Additionally, encouraging employees to be think outside the box, leads to opportunities of innovation and creativity (Lui, 2017). Fostering a positive and supportive culture leads to employee satisfaction, which can be a source of power in the competitive environment companies operate in. In evaluating the internal environment, the Hersey-Blanchard Model and the Team Model are two decision models that can be utilized to aid the process (Krogerus & Tschäppeler, 2018).
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Answer preview to internal environments are constructed by many variables and seeking to understand the internal factors must be a priority for leadership
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