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:
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.
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.