Business: Internal Factors

Business: Internal Factors

Corporate Culture

  • The corporate culture refers to the shared values, attitudes, standards, and beliefs that characterise members of an organisation and define its nature.
  • Corporate culture is rooted in an organisation’s goals, strategies, structure, and ways to bond.
  • A positive corporate culture improves the reputation of a business and attracts high-grade talent.

Management Structure

  • The management structure of a business is the hierarchy of authority and defines the roles and responsibilities of each individual in the organisation.
  • A well-designed structure can improve communication, increase productivity and foster innovation.
  • The structure can be centralised, where decision-making authority is held by a few top individuals, or decentralised, where authority is distributed among more employees.

Financial Capacity

  • The financial capacity of a business affects its ability to invest in growth opportunities, carry out necessary functions, and weather downturns.
  • Access to funding also influences a business’s choice of strategies, such as pricing, marketing, and human resource management.

Physical Resources

  • Physical resources like buildings infrastructure, machinery, and technology determine what a business can produce and how it can operate.
  • The quality, quantity, and maintenance of physical resources can significantly impact the efficiency and effectiveness of the business.

Human Resources

  • Human resources, or the employees of the business, are vital for carrying out operations, providing customer service, making strategic decisions, and fostering innovation.
  • The skills, abilities, commitment, and diversity of the workforce contribute to the competitive advantage of a business.

Organisational Structure

  • The organisational structure details the lines of authority, communication, duties and responsibilties of individuals and departments within the business.
  • This can either be tall, with many layers of management, or flat, with fewer layers and a wider span of control.
  • The organisational structure can impact communication, decision-making, and overall company performance.

Each of these internal factors can influence a business’s performance and strategic decisions. A successful business actively manages these factors to support its vision and goals.