The following points highlight the six internal factors influencing strategies and decisions of an organisation. The factors are:- 1. Top Management Philosophy 2. Mission and Objectives 3. Management Structure and Nature 4. Superior-Subordinate Relationship 5. Human Resources 6. Corporate Image and Product-Brand Image.
Factor # 1. Top Management Philosophy:
The management’s attitudes and value judgments with respect to individual group action, centralisation or decentralisation are the basics to be considered.
Factor # 2. Mission and Objectives:
The scope and direction of the organisation’ activities and to the extent that these are feasible provide a template for decision making at all levels. For translation of mission into strategic action, mutually determined short-term objectives, future-oriented long-term objectives, growth-oriented strategic objectives and ROI-based financial objectives are needed to be seriously thought of.
Factor # 3. Management Structure and Nature:
These are of prime importance when choosing a particular strategy for action.
Factor # 4. Superior-Subordinate Relationship:
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This is a crucial issue as it can lead to either success or failure of the total organisational effort.
Factor # 5. Human Resources:
The type, number, qualifications, capabilities, responsibilities, personalities, ambitions and a host of intangible factors are required to be considered.
Factor # 6. Corporate Image and Product-Brand Image:
Both of them are usually inter-linked. Proper functioning of internal environmental variables and quality product offerings contribute to the image development before the public and thereby all-round growth for business.
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Another feature is that the width of the product or service line is often an organisational determinant. As product (or service) offerings are increasingly diverse, there is a tendency to form a product-group approach (e.g., Philips India Ltd.) or service-group approach (e.g., Banking or Insurance Companies) to the organisational structure.
If a firm puts emphasis on new products (or new service lines) and entry into new markets, a shift from purely functional set-up to a more product/service-and-market oriented organisational structure may be in order.
Other important internal factors are (a) physical assets and facilities, (b) R & D and technological capabilities, (c) marketing resources and (d) financial resources.
The chart next highlights the basic issues.