Analyzing The Internal Environment

Opening Case :State Bank Of India

PROFILE

Branches : 9,000 Foreign Offices : 69

Total number of Employees: 1,99,000 Assets : £ 63 billion

SBI On Its Capabilities

Financial Capability

Bank maintains a healthy liquidity position.

Funding profile is strong. Marketing Capability

Strong retail base and wide geographical reach.

Strong market position in housing loans. Operations Capability

High level of gross non- performing assets.

It has a clear technology strategy.

Personnel Capability

Overstaffing.

Understaffing.

Information Management Capability

SBI commissioned TCS to supply , customize and

implement the centralized core banking system.

General Management Capability

Performance indicators used by the SBI are capital

adequacy ratio, return on assets business per employee

and profit per employee.

Conclusion

These capabilities stand the organization in good stead when they compete for resources , customers and market share.

Internal Environment

Conditions, entities, events, and factors within an organization which influence its activities and choices, particularly the behavior of the employees. Factors that are frequently considered part of the internal environment include the organization's mission statement, leadership styles, and its organizational culture.

Dynamics Of Internal Environment• Diagram

Strategic Advantage

Organizational Capability

Competencies

Synergistic Effects

Strength &Weakness

Organizational Resources

Organizational Behavior

Organizational Resources

Organizational resources are a bundle of resources – tangible and intangible that include all assets, capabilities, organizational process, information, knowledge etc.

Classification Of Organizational Resources

Physical Resources:

The physical resources are the technology, plant and equipment, geographic location, access to raw material, etc.

Human Resources:

The human resources are the training, experiences, judgment, intelligence, relationship etc. present in an organization.

Organizational Resources The organizational resources are the formal system

and structure as well as information relations among groups.

Organizational Behavior

Organizational behavior is the manifestation of the various forces and influences operating in the internal environment of an organization that create the ability for or place constrains on, the usage of resources.

Competencies

Competencies are special qualities possessed by an organization that make them withstand the pressures of competition in the market place.

For Example :- It can relate to economic resource acquisition , product process efficiency , employee productivity or marketing products to consumers . Companies use these competencies to secure strong market share and develop a following of consumers through positive customer service interaction.

Effects

Companies can use core competencies to limit or prohibit the waste of economic resource . This helps companies create a better cost position in the economic market and offer lower priced goods and services to consumers . A cost advantage helps companies increase profits and long term sustainability.

Organizational Capability Organizational capability is the inherent

capability or potential of an organization to use its strengths and overcome its weaknesses in order to exploit the opportunities and face the threats in its external environment.

Organizational Capability Factors

Financial capabilityMarketing capabilityOperational capabilityPersonnel capabilityInformation capabilityGeneral management capability

Financial capability

Financial capability factors relate to the availability, usages and management of funds.

Factors Factors related to sources of funds Factors related to usage of funds Factors related to management of funds

Strengths

Access to financial resources Efficient capital budgeting system Low cost of capital as compared to

competitors

Marketing Capability

Marketing capability factors related to the pricing, promotion and distribution of products or services.

Factors Product related factors Price related factors Place related factor Promotion related factors

Strengths Wide variety of products Better quality of product High quality customer services Effective distribution system High profile advertisement

Operations capability

Operation capability factors related to the production of product or service.

Factors Factors related to the production system Factors related to the operations and control

system

Strengths

High level of capacity utilization Favorable plant location Effective control of operational cost

Personnel capability Personnel capability factors related to the

existence and use of human resources and skills. Strengths Efficient and effective personnel system Highly satisfied and motivated workforce Safe and salutary working condition Excellent training opportunities and facilities

Information Management Capability

Information management capacity factors related to the design and management of the flow of information from outside into and within an organization for the purpose of decision making.

Strengths

Ease and convenience of access to information sourceWidespread use of computerized information system Wide coverage and networking of computer system

General Management Capability

General management capability relates to the integration, coordination and direction of the functional capabilities towards common goals.

Factors Factors related to the general management system Factors related to external relationships Factors related to organizational climate

Strengths

Effective system for corporate planning Control, reward and incentive system for top

managers geared to the achievement of objectives Effective management of organizational change