Internal Factors that May Affect the Business Organization

Summary written by: Zubair Ahmed Memon

Submitted to:
Sir Adnan Kehar
Internal Factors that May Affect the Business Organization
Author: Hatim Abukhames
Link: https://www.linkedin.com/pulse/internal-factors-may-affect-business-organization-
hatim-abukhames/

I have summarized the article that is related to internal resources and capabilities of
organization to remain competitive in the market. The article discusses that how internal factors
of organizations can affect a business.
The internal environment of business contains the factors that affect success of company and
its operations. It is important to use company resources effectively to form capabilities and
maintain competitive advantage.
The article discusses that role of company leadership and leadership style is an important
internal factor. The motivated, hardworking and talented employees is also a strength of
company. Other important resources that help organizations to remain competitive are:
1. Financial resources, sources of income, investment opportunities and its own ability to
pay for investments.
2. Human resources, key talent, motivated employees, leadership.
3. Access to patents copy rights and trademarks.

The article further discusses some other important internal factors like:
Organizational and operational factors
This includes inaccurate accounting procedures, interruptions to supply chain and outdated IT
systems. Companies should overcome these problems otherwise it will lose investors trust and
customers may find the company unreliable.
Strategic risk factor
This affect firm’s ability to achieve its goals and execution of strategic plan. The changes in
technological evolutions of customer preferences might impact company’s profitability and
market share and company will be unable to achieve its goals.
Innovation
In highly competitive environment organizations need to innovate in order to survive in the
industry. It is important to respond to the rapidly changing market conditions, customer
preferences, adding new solutions and improve quality of products. Embracing new technology
is the best way to keep up with technological advancements. A lack of innovation can pose a
serious risk to a growing business. No innovation will cause a company to remain boring. The
company will become dull, stagnant and irrelevant.