TOPIC 3
CHALLENGES IN THE INTERNAL ENVIRONMENT
THE INTERNAL ENVIRONMENT
Aside from understanding the
developments and changes occurring in
the global environment, organizations
need to understand the internal
environment, or better referred to as
the local milieu. The internal
environment is the setting in which an
organization locally exists. As one
studies in local environment, there are existing unique and interrelated variables that directly
affect any organization or business. Understanding these variables is essential if one has to
conduct his organization successfully. These areas are government, culture, the stakeholders,
competitors, suppliers, customers, and the community.
GOVERNMENT: THE BUSINESS CARETAKER
The government is the sole legitimate
institution tasked with overseeing
organizational operations in the country. In
implementing these administrative functions
and responsibilities, the government
undertakes the following:
1. Provides the needed infrastructure
a. physically in the form of roads, bridges,
electricity, and water services
b. technologically through information technology infrastructure and communication
facilities
Page 1 of 11
, c. economically by providing availability of loans, banking services, low interest rates,
and tax incentives
d. socially through housing, welfare, waste management policies, community service,
and societal responsibilities
e. politically in terms of peace, security, stability, and governance
2. Create an atmosphere of fair and robust competition among industry and company
players, monitors and regulates monopolies and oligopolies, and eliminates unfair and
illegitimate practices.
3. Formulates business policies, implements business operating guidelines, and regulates
the conduct of business activities such as payment of taxes, health and safety practices
in food, manufacturing, construction, and other service industries, ensures quality of
products and services, and mandates minimum wages of employees, and their fair and
adjust treatment.
CULTURE: A communal Convergence
It is widely accepted that an
organization’s culture is comprised of
shared values, underlying perceptions,
feelings and behaviors as well as
observational artifacts – such as dress
code, symbols and stories. But what
happens when these cultural components
vary – across an organization and/or
across groups of people?
A nation’s culture is the communal aggregation and convergence of the country’s philosophy,
beliefs, traditions, values, attitudes, aspirations, and practices that have historically evolved since
a nation’s inception. The Philippine has its own culture – a culture that has greatly influence by
diverse cultures: Chinese, Japanese, Spanish, and American. Through many years of national
growth and development, this culture has been shaped by environmental variables happening
within and outside the country and until today, continuous to change, mature and transform.
Page 2 of 11
CHALLENGES IN THE INTERNAL ENVIRONMENT
THE INTERNAL ENVIRONMENT
Aside from understanding the
developments and changes occurring in
the global environment, organizations
need to understand the internal
environment, or better referred to as
the local milieu. The internal
environment is the setting in which an
organization locally exists. As one
studies in local environment, there are existing unique and interrelated variables that directly
affect any organization or business. Understanding these variables is essential if one has to
conduct his organization successfully. These areas are government, culture, the stakeholders,
competitors, suppliers, customers, and the community.
GOVERNMENT: THE BUSINESS CARETAKER
The government is the sole legitimate
institution tasked with overseeing
organizational operations in the country. In
implementing these administrative functions
and responsibilities, the government
undertakes the following:
1. Provides the needed infrastructure
a. physically in the form of roads, bridges,
electricity, and water services
b. technologically through information technology infrastructure and communication
facilities
Page 1 of 11
, c. economically by providing availability of loans, banking services, low interest rates,
and tax incentives
d. socially through housing, welfare, waste management policies, community service,
and societal responsibilities
e. politically in terms of peace, security, stability, and governance
2. Create an atmosphere of fair and robust competition among industry and company
players, monitors and regulates monopolies and oligopolies, and eliminates unfair and
illegitimate practices.
3. Formulates business policies, implements business operating guidelines, and regulates
the conduct of business activities such as payment of taxes, health and safety practices
in food, manufacturing, construction, and other service industries, ensures quality of
products and services, and mandates minimum wages of employees, and their fair and
adjust treatment.
CULTURE: A communal Convergence
It is widely accepted that an
organization’s culture is comprised of
shared values, underlying perceptions,
feelings and behaviors as well as
observational artifacts – such as dress
code, symbols and stories. But what
happens when these cultural components
vary – across an organization and/or
across groups of people?
A nation’s culture is the communal aggregation and convergence of the country’s philosophy,
beliefs, traditions, values, attitudes, aspirations, and practices that have historically evolved since
a nation’s inception. The Philippine has its own culture – a culture that has greatly influence by
diverse cultures: Chinese, Japanese, Spanish, and American. Through many years of national
growth and development, this culture has been shaped by environmental variables happening
within and outside the country and until today, continuous to change, mature and transform.
Page 2 of 11
