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Ch 4: The Internal Assessment

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April 8, 2023

2

Strategic Management Model

Develop Mission &

Vision Statement

Perform Internal Audit

Establish Long-Term Objectives

Perform External

Audit

Generate, Evaluate &

Select Strategies

Implement Strategies

Mgmnt Issues

Implement Strategies

– Functional

Issues

Measure * Evaluate

Performance

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3+How to Conduct External Strategic Management Audit?

Internal factors considered should be:1. Important to achieving

long-term and annual objectives

2. Measurable3. Applicable to all competing

firms4. Hierarchical; pertaining to

overall company and functional

Benefits of Internal Audit process:• Opportunity for employees

to understand impact of their roles

• Employees perform better when they understand the impact of their roles

• Provides forum for improved communication

April 8, 2023

4+Internal Assessment: Resource-Based View (RBV)

Physical Resources: Plant & Equipment | Location | Technology | Raw Materials | Machines

Human Resources: Employees | Training | Experience

Organizational Resources: Firm Structure | Planning Process | Information Systems | Patents | Copyrights

Organizational performance will primarily be determined by internal resources, grouped into 3 broad categories:

Physical | Human | Organization

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+#1: Does Culture impact Organizational Strategy?

April 8, 2023

6+Benefits of a Vibrant & Alive Culture Focus: Aligns the entire company towards achieving its

vision, mission, and goals. 

Motivation: Builds higher employee motivation and loyalty. 

Connection: Builds team cohesiveness among the company’s various departments and divisions. 

Cohesion: Builds consistency and encourages coordination and control within the company. 

Spirit: Shapes employee behavior at work, enabling the organization to be more efficient and alive.

April 8, 2023

7+#2: Functions of Management (1/2) Planning (preparing for future): Forecasting, establishing

objectives, devising strategies, developing policies, and setting goals

Organizing (structure of task & authority relationships): Organizational design, job specification, job description, span of control, job analysis

Motivating (shaping human behavior): Leadership, behavior modification, delegation of authority, job enrichment, employee morale, job satisfaction

Staffing (human resource management): Wage & salary administration, employee benefits, hiring, training, career development

April 8, 2023

8+#2: Functions of Management (2/2) Controlling (performance against plan): Quality control,

financial control, sales, inventory, analysis of variance, rewards & sanctions

Management Audit Checklist of Questions1. Firm uses strategic-management concepts2. Company objectives & goals measureable & well

communicated3. Managers at all levels plan effectively4. Managers delegate authority5. Organization’s structure is appropriate6. Job descriptions & job specifications are clear7. Employee morale is high8. Employee absenteeism & turnover is low9. Organizational rewards & control mechanisms

effective

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9+#3: Marketing

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#3: Marketing Audit Checklist of Questions1. Markets segmented

effectively

2. Organization positioned well among competitors

3. Firm’s market share has been increasing

4. Present channels of distribution reliable & cost-effective

5. Effective sales organization

6. Firm conducts market research

7. Product quality & customer service is good

8. Firms products & services are priced appropriately

9. Effective promotion, advertising, & publicity strategy

10. Marketing Managers have adequate experience & training

April 8, 2023

11+#4: Finance / Accounting

1. How has each ratio changed over time?2. How does each ratio compare to industry norms?3. How does each ratio compare with key competitors?

April 8, 2023

12+#4: Finance / Accounting Audit Checklist 1. Financial Strengths & Weaknesses indicated by financial

ratio analysis

2. Firm can raise needed short-term capital

3. Firm can raise long-term capital through debt and/or equity

4. Firm has sufficient working capital

5. Capital budgeting procedures are effective

6. Dividend payout policies reasonable

7. Firm has good relations with investors & stockholders

8. Firm’s financial managers experienced & well-trained

April 8, 2023

13+#5: Production / Operations

Process (design of the production system): Choice of technology, facility layout / location, process flow analysis

Capacity (optimal output levels): Forecasting, scheduling, capacity planning

Inventory (levels of raw materials, WIP, finished goods): What to order, When to order, how much to order, materials handling

Workforce (managing skilled, un-skilled labor): Job design, motivation techniques, work measurement

Quality (aim is to produce high-quality goods/services): Quality control, sampling, testing, quality assurance

April 8, 2023

14+#5: Implication of Different Production / Operations Strategies

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15+#5: Production / Operations Audit Checklist1. Are supplies of raw materials and parts reliable &

reasonable?

2. Are facilities, equipment, machinery, and offices in good condition?

3. Are inventory-control policies & procedures effective?

4. Are quality-control policies & procedures effective?

5. Are facilities, resources, and markets strategically located?

6. Does the firm have technological competencies?

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April 8, 2023

16

Value Chain Analysis

Total revenues minus total costs

of all activities undertaken to develop and

market a product or service yields

value.

April 8, 2023

17+Translating Performance into Competitive Advantage

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April 8, 2023

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Internal Factor Evaluation Matrix

April 8, 2023

+

Thank you

Hardy AlexanderFounder & Director | Triune GlobalBangalore – 560077Contact: +91 96864 48698Email: halexander@triuneglobal.comMy Blog: dayscore.wordpress.com

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