Chapter 4 The Internal Assessment


Nature of an Internal Audit ‡Functional Areas of Business ± Strengths ± Weaknesses ‡Distinctive Competencies: Firm¶s strengths that cannot be easily matched or imitated by competitors 2 .

3 .

Internal Audit Parallels process of external audit ‡Information from: ‡Management ‡Marketing ‡Finance/accounting ‡Production/operations ‡Research & development ‡Management information systems 4 .

Human resources 3. Organizational resources Empirical Indicators  Rare  Hard to imitate  Not easily substitutable 5 .Resource Based View (RBV) Approach to Competitive Advantage Internal resources are more important than external factors Three All-Encompassing Categories 1. Physical resources 2.

. . is considered valid and taught to new members 6 .Integrating Strategy & Culture Organizational Culture Pattern of behavior developed by an organization as it learns to cope with its problem of external adaptation and internal integration .

Motivating 4. Staffing 5.Management Functions of Management 1. Planning 2. Controlling 7 . Organizing 3.

Management Function Planning Organizing Motivating Staffing Controlling Stage When Most Important Strategy Formulation Strategy Implementation Strategy Implementation Strategy Implementation Strategy Evaluation 8 .

Marketing research 7. Creating 4. Distribution 6. Pricing 5. Customer analysis 2. Defining 2. Fulfilling Marketing Functions 1.Marketing Customer Needs/Wants for Products/Services 1. Selling products/services 3. Opportunity analysis 9 . Anticipating 3. Product & service planning 4.

Financing decision 3. Investment decision (Capital budgeting) 2.Finance/Accounting Finance/Accounting Functions  Determining financial strengths & weaknesses key to strategy formation 1. Dividend decision 10 .

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