One mistake many small and medium businesses do is failing to carry out studies that identify their internal and external issues. A business that wants to succeed must pay close attention to its internal and external issues and take action to address them. Businesses that are certified to ISO 9001, or those that are not certified but adopt the management system standards know that Clause 4.1 talks about the context of the organization. Here the standard wants businesses to determine the internal and external issues that are relevant to them because these issues can significantly affect the organizations’ ability to meet its objectives.
WHAT ARE INTERNAL AND EXTERNAL ISSUES?
Internal issues of an organization refer to the challenges or problems that arise within the organization itself. These issues are usually related to the organization’s internal processes, systems, and culture. Examples of internal issues include poor communication among employees, lack of employee motivation, inadequate financial resources, inefficient management practices, or outdated technology.
External issues of an organization refer to the challenges or problems that arise from outside the organization. These issues are usually related to the organization’s external environment, such as the industry, customers, suppliers, or competitors. Examples of external issues include changes in customer preferences, increased competition, changes in regulations, economic downturns, or technological advances that disrupt the market.
IMPORTANCE OF IDENTIFYING INTERNAL AND EXTERNAL ISSUES.
Identifying both internal and external issues is crucial for an organization’s success. Internal issues can affect the organization’s efficiency, effectiveness, and overall performance, while external issues can affect its competitiveness, growth, and sustainability. By identifying and addressing these issues, organizations can develop effective strategies to leverage their strengths, overcome their weaknesses, take advantage of opportunities, and mitigate threats.
identifying the internal and external issues of an organization is an essential process in strategic planning. It helps the organization understand its strengths, weaknesses, opportunities, and threats, which can aid in the development of effective strategies.
HOW TO IDENTIFY THE INTERNAL AND EXTERNAL ISSUES OF AN ORGANIZATION:
Internal Analysis:
Internal analysis is an assessment of the organization’s internal environment. It involves identifying the strengths and weaknesses of the organization. The following are some of the factors that can be considered when conducting an internal analysis:
Organizational culture, Resources (human, financial, and technological), Leadership style, Structure and processes, Marketing and sales strategies, Operations Management, Human resource management, financial management
External Analysis:
The external analysis involves examining the external environment to identify the opportunities and threats to the organization. The following are some of the factors that can be considered when conducting an external analysis: Economic conditions, Political and legal factors Societal and cultural trends, Technological changes, Competitive landscape, Customer behavior, Supplier and vendor relationships
Identifying the internal and external issues of an organization requires a thorough analysis of the organization’s internal and external environment. The process involves examining various factors and using tools analysis to summarize the findings.
TOOLS FOR IDENTIFYING INTERNAL AND EXTERNAL ISSUES
There are several tools that can be used to identify internal and external issues for an organization. Here are some commonly used tools:
SWOT ANALYSIS:
SWOT analysis is a popular tool for identifying internal and external issues. It helps to identify the organization’s strengths, weaknesses, opportunities, and threats. The SWOT analysis is usually conducted by examining the internal and external environment of the organization and summarizing the findings in a matrix format.
PEST ANALYSIS:
PEST analysis is another tool for analyzing the external environment of an organization. It examines the political, economic, social, and technological factors that can affect the organization. This analysis helps to identify opportunities and threats for the organization.
Five Forces Analysis:
Five Forces analysis is a tool for analyzing the competitive environment of an organization. It examines the five forces that affect the competitive landscape of an industry, namely, the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitute products, and the intensity of competitive rivalry.
Value Chain Analysis:
Value Chain analysis is a tool for analyzing the internal environment of an organization. It examines the value-adding activities of an organization and helps to identify the strengths and weaknesses of the organization’s value chain.
Benchmarking:
Benchmarking is a tool for comparing an organization’s performance with that of its peers. It helps to identify the strengths and weaknesses of the organization’s performance compared to its competitors.
The choice of tool for determining internal and external issues depends on the nature of the organization, the industry, and the specific issues that need to be addressed.
CONCLUSION
Determining internal and external issues is crucial for small and medium businesses as it enables them to gain a comprehensive understanding of their operating environment. Internally, identifying issues such as organizational structure, resource allocation, and employee skills allows businesses to optimize their operations and capitalize on strengths. Externally, analyzing factors like market trends, competition, and regulatory changes empowers businesses to adapt and stay competitive. By recognizing both internal and external issues, businesses can proactively address challenges, leverage opportunities, and make informed decisions. This strategic approach fosters resilience, enhances performance, and increases the likelihood of long-term success in the dynamic business landscape. No matter the size of your business, you should determine your internal and external issues. These are also some of the benefits of a quality management system.
