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The internal factors affecting business organisations

Businesses are affected by a wide variety of external factors such as: -

However, these are external factors which are beyond the control of business owners, human resource managers and managers. So, what are the internal factors affecting business organisations?


All businesses must develop strategies to cope with change. There are always going to be changes in the market and in the industries in which businesses compete. Businesses need to adapt before they die. This phrase is rooted in the theories of Charles Darwin, the naturalist whose book, On the Origin of Species (1859) who wrote that the process of natural selection determines that only the strongest of any species will survive (survival of the fittest). Therefore, it would seem to follow that if a business can’t adapt it won’t survive.

It is necessary to be constantly looking at the way the business is run and make attempts to streamline its operations so that it works more effectively.

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Businesses are affected by many internal factors. Some of these are: -

  • bad financial management
  • ineffective general management
  • lack of trained and/or skilled personnel
  • lack of ability by the human resources people to pick the appropriate people for jobs
  • inability to market and advertise effectively
  • inability to capitalise on the market niche
  • lack of financial resources
  • the company’s location and facilities
  • out-of-date equipment
  • failure to value staff
  • the culture of the company
  • poor accounting systems
  • an unmotivated workforce

A collaborative culture is important for a company’s success. When there is an emphasis on teamwork, this is better than having a culture in which employees are always at each other’s throats.

Unfortunately, team work and collaboration do not ensure, on their own, the success of any venture. This is because of the dynamics of the group who are working together on a project. A company may state that it wants to foster a good team spirit, but it might, ultimately put more value on individual success and achievement.

A reward system is an excellent incentive for employees to give of their best. The rewards should be given to whole teams not individuals as the success or failure of a project is dependent on the performance of the whole team. Such rewards provide motivation and so employees will give of their best.

Training should be an integral part of a company’s strategy. Employees skills should be updated regularly as there are always innovations which can be embraced. A trained and highly skilled workforce can ensure the company’s success.

If the company uses advanced technology, it should provide technical assistance to staff who need to use it. This ensures that support is available, and the company’s productivity is not compromised. No business can afford to lose revenue because of a technical hitch.

Each team should be clear about how to proceed with a task. All team members should understand why they are being asked to do any given task. It is essential to give clear instructions. Tasks given to teams should be meaningful and all team members should share accountability for successes and failures. Regular feedback should be given so that everyone knows how well (or badly) a task or project is going.

It is necessary to give careful thought to the composition the team. It’s important that all team members can get along well together. They should be able to learn from each other as well as from others in different teams. Here are some points to consider: -

  • Does the team have the right number of members to get a job done?
  • Can they collaborate well with each other?
  • Do the members, between them, have sufficient expertise to complete the task assigned to them and to do it well?
  • Can team members learn from each other or are they too similar in background?
  • Are team members from the same culture and linguistic group?

In the business world today, teams might consist of people from different nationalities and cultures. This can cause difficulties in communication. Differences in culture can also cause problems. It might be necessary for companies to employ interpreters or translators if teams are multi-ethnic.

Some employees who speak English as a second, third, or even fourth language might be misunderstood by native speakers of other languages. There are now many World Englishes, but they deviate to a greater or lesser extent from Standard English. Speakers of English as a Lingua Franca (ELF) accommodate each other and work to achieve understanding by negotiating meaning. They do this by asking for clarification, checking understanding and so on. Native speakers are unlikely to do these things as a matter of course, which means that misunderstandings can occur. Again, it might be necessary to have an interpreter present at meetings.

Body language can also be a problem, as it is not the same across cultures, although facial expressions usually are. Good interpreters can explain body language so that there is little space for misunderstandings.

Training in culture and body language can be given to a multi-ethnic workforce so that harmony prevails. Sensitivity towards others and empathy are essential in today’s business world.

For native English speakers working with ELF speakers, training should be a priority. They need to learn how to use the same strategies as their foreign colleagues to negotiate meaning.

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