This essay will deal with certain vital facts related to internal environment and strategic management. The first few paragraphs are devoted in introducing the concept of organisational strategy and internal environment. In the latter part, an elaborate discussion is conducted on the various process by which internal environment of an organisation influences the organisational strategy. Some real life examples are also discussed to understand the manner in which few companies have modified their organisational strategy as per the internal environment to gain synergy and competitive edge in the market.
Different authors have nurtured different views on the concept of strategy. In general it can be concluded that strategy assists in identifying objectives which will add competitive edge to the company over its market rivals (Sutton, 1980, p.1). Organisational strategy provides a vision or direction that organisation should strive to gain competitive position over its rivals. While developing any strategy, the management should keep in mind that the strategy should be aligned with the organisation’s market position, prevailing resources and capability possessed by it. Strategy provides the guideline for resource allocation and management policies (Walker, 2003, p.4).
External environmental factors are those factors which are not under the direct control of the company. These include economic, political, social, technological, legal and environmental factors. Since these factors lie beyond the reach of the company, they constitute the threats and opportunities of the business (Norton, 2008, p.10). On the other hand, the internal factors which directly or indirectly affect an organisation are financial resources, physical resources, objective of business, managerial policies, work environment, corporate image of the organisation, its relation with labours, technical and R&D capability and promoters’ vision