Question

Describe the nature and role of internal assessment in strategy formulation.

Answer 1

INTERNAL ASSESSMENT

Internal Assessment is the survey of the inventory of the strengths and weaknesses of an organization. It includes the assessment of material resources, human resources, stakeholders satisfaction, client and customer satisfaction, and effectiveness of the board and staff members.

NATURE OF INTERNAL ASSESSMENT

1. It is inward-looking i.e., it assesses the internal aspects within the organization.
2. It is dynamic in nature. The assessment techniques are dynamic and shift according to the dynamic needs of the organization.
3. It is consistent. Internal assessment is something that the organizations do on a regular and consistent basis to know where they stand.
4. Internal assessment is aligned with the management.
5. It coordinates between all the functional areas of the management.
6. It's nature of complexity increases or decreases relative to the size of the organization.

ROLE OF INTERNAL ASSESSMENT IN STRATEGY FORMULATION

1. An internal assessment allows the organization to get to know it's strengths and weaknesses so that it can formulate it's strategies accordingly.
2. Internal assessment enables the organization to take advantage of its strengths and opportunities during strategy formulation.
3. Internal assessment paints a clear picture to the strategists about the effective funnelling of the organization's resources.
4. An internal assessment provides an in detail analysis of the performance of the staff, thus giving an idea on how to implement personnel strategies to increase their productivity.
5. Internal assessment ensures the optimum utilization of resources during strategy formulation.
6. Internal assessment makes sure the strategy being formulated is in adherence to rules, laws and regulations.
7. An internal assessment helps in reducing the risk of failure of the new strategy formulated because it allows to assess weaknesses and threats beforehand.