Internal Envrionment
How to assess your internal environment
Businesses and organizations sometimes have to operate in an overly competent environment. It’s important that you understand the existing organizational capabilities, and have a clearly articulated strategic intent that defines your organization and market. This is what will form the basis of an understanding on your existing internal environment.
The most important thing is to understand what your organization does well at, what is termed its strengths.
Hamel and Prahalad identifies three tests you can perform to determine is something in your organization is a core competency or capability.
• Breadth of Application – A core capability should be able to reveal multiple potential markets. If the capability only creates a few niche markets, it is unreliable.
• Difficulty of imitation – A core capability should not be easy to imitate. This will make it easy to provide services or products better that those of your competitors. You can further work continually to improve these and maintain your competition in the market.
• Relevance – A core capability must be strongly motivating for your customers such that they always prefer your services or products. Else, it will fail to impact on your competitive position.
Areas to Assess Within Your Organization
• Systems and processes (operational processes, administration system, information system)
• Staff (recruitment, motivation, capabilities)
• Physical resources (capital expenditure requirements, capacity, space)
• Management (communication, leadership style, structure)
• Products and services (range, quality, technical backup)
• Culture (attitudes, willingness to change, flexibility)
• Financial resources (level of working capital, extent of borrowing, assets)
