Chapter5-AnalysisofInternalBusinessEnvironment

Download as pdf or txt
Download as pdf or txt
You are on page 1of 47

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/385087698

Analysis of Internal Business Environment

Chapter · October 2024

CITATIONS READS

0 188

1 author:

Aditya Wardhana
Telkom University
589 PUBLICATIONS 1,030 CITATIONS

SEE PROFILE

All content following this page was uploaded by Aditya Wardhana on 20 October 2024.

The user has requested enhancement of the downloaded file.


BUSINESS STRATEGY AND POLICY
IN THE DIGITAL EDGE 4.0

Aditya Wardhana

PENERBIT CV. EUREKA MEDIA AKSARA

i
BUSINESS STRATEGY AND POLICY
IN THE DIGITAL EDGE 4.0

Penulis : Aditya Wardhana

Editor : Mahir Pradana, Ph.D.

Desain Sampul : Eri Setiawan

Tata Letak : Salsabela Meiliana Wati

ISBN : 978-623-516-510-3

No. HKI : EC002024199273

Diterbitkan oleh: EUREKA MEDIA AKSARA, SEPTEMBER 2024


ANGGOTA IKAPI JAWA TENGAH
NO. 225/JTE/2021

Redaksi :
Jalan Banjaran, Desa Banjaran RT 20 RW 10 Kecamatan Bojongsari
Kabupaten Purbalingga Telp. 0858-5343-1992

Surel: eurekamediaaksara@gmail.com

Cetakan Pertama : 2024

All right reserved

Hak Cipta dilindungi undang-undang


Dilarang memperbanyak atau memindahkan sebagian atau seluruh
isi buku ini dalam bentuk apapun dan dengan cara apapun,
termasuk memfotokopi, merekam, atau dengan teknik perekaman
lainnya tanpa seizin tertulis dari penerbit

ii
PREFACE

I give thanks to God Almighty, because with His blessing and


mercy, we were able to finish this book. The writing of the book is
the fruit of the author's thoughts, entitled "Business Strategy And
Policy In The Digital Edge 4.0". We realize that without help and
guidance from various parties it would be very difficult for us to
complete this work. Therefore, we would like to thank all those who
have helped prepare this book. So that this book can be presented to
readers.
The systematics of the book entitled "Business Strategy and
Policy in The Digital Edge 4.0" refers to related concepts and
discussions, consisting of 16 units which are explained in detail in
the discussion of each unit.
UNIT 1 Understanding Business Strategy and Policy
UNIT 2 Scope of Business Strategy and Policy
UNIT 3 Vision, Mission, Goals, and Company Values
UNIT 4 External Business Environment Analysis
UNIT 5 Analysis of Internal Business Environment
UNIT 6 Generic Competitive Strategies
UNIT 7 Selection of Business Strategies and Policies
UNIT 8 Execution of Business Strategies and Policies
UNIT 9 Business Strategies and Policies in The International
Market
UNIT 10 Company Human Resource Strategy
UNIT 11 Company Marketing Strategy
UNIT 12 Corporate Financial Strategy
UNIT 13 Corporate Operations Strategy
UNIT 14 Ethics and Corporate Culture
UNIT 15 Corporate Leadership Strategy
UNIT 16 Evaluation of Business Strategies and Policies

The author realizes that this book is still far from perfection.
Therefore, constructive criticism and suggestions are needed to
improve this book. Finally, we hope that God Almighty will repay
all the kindness of all those who have helped. Hopefully this book
will bring benefits to the development of science.

iii
TABLE OF CONTENTS

PREFACE ............................................................................................ iii


TABLE OF CONTENTS ................................................................... iv
LIST OF FIGURES .............................................................................ix
LIST OF TABLES............................................................................. xiii
UNIT 1 UNDERSTANDING BUSINESS STRATEGY
AND POLICY ...................................................................... 1
A. Definition of Business Strategy and Policy................... 1
B. Elements of Effective Business Strategy and Policy .... 3
C. Sustainable Competitive Advantage........................... 11
D. Understanding Strategic Management ....................... 13
E. Characteristics of Strategic Management ................... 15
F. Differences Between Business Strategy and
Business Policy .............................................................. 21
G. Changes in Business Strategies and Policies .............. 42
H. Levels of Business Strategy and Policy ....................... 45
I. Development of Business Strategy Theory................. 49
J. Benefits of Implementing Business Strategies and
Policies ........................................................................... 58
K. Failure of Business Strategies and Policies ................. 71
REFERENCE ....................................................................... 76
UNIT 2 SCOPE OF BUSINESS STRATEGY AND POLICY ..... 87
A. Dimensions of Business Strategy and Policy.............. 87
B. Business Strategy and Policy Process ......................... 94
C. Theory of Business Strategy and Policy
Formulation ................................................................. 103
D. Business Strategy and Policy Implementation
Theory .......................................................................... 120
E. Theory of Business Strategy and Policy
Evaluation and Control .............................................. 131
F. Business Model ........................................................... 131
G. Forms of Business Models in the Industry 4.0 Era ... 133
H. The Relationship Between Business Strategy and
Business Models.......................................................... 141
REFERENCE ..................................................................... 142

iv
UNIT 3 VISION, MISSION, GOALS, AND COMPANY
VALUES ........................................................................... 152
A. Corporate Vision ........................................................ 152
B. Corporate Mission ...................................................... 159
C. Company Objectives .................................................. 165
D. Company Values ........................................................ 167
REFERENCE .................................................................... 172
UNIT 4 EXTERNAL BUSINESS ENVIRONMENT
ANALYSIS....................................................................... 178
A. Understanding the External Business
Environment ............................................................... 178
B. Factors of the External Business Environment ........ 179
C. Importance of the External Business
Environment ............................................................... 190
D. External Factors Analysis (EFAS) Matrix ................. 191
REFERENCE .................................................................... 197
UNIT 5 ANALYSIS OF INTERNAL BUSINESS
ENVIRONMENT ............................................................ 200
A. Definition of Internal Business Environment .......... 200
B. Factors of Internal Business Environment ............... 201
C. Importance of Internal Business Environment ........ 209
D. Dimensions of the Internal Business
Environment ............................................................... 211
E. Internal Factors Analysis (IFAS) Matrix ................... 213
F. IFAS Matrix................................................................. 216
REFERENCE .................................................................... 225
UNIT 6 GENERIC COMPETITIVE STRATEGIES .................. 228
A. Definition of Generic Competitive Strategies .......... 228
B. Key Aspects of Generic Competitive Strategy ......... 244
C. Characteristics of Cost Leadership Strategy ............ 244
D. Characteristics of Differentiation Strategy ............... 245
E. Characteristics of Cost Focus Strategy ..................... 247
F. Characteristics of Differentiation Focus Strategy .... 248
G. Characteristics of Stuck in the Middle Strategy....... 250
REFERENCE .................................................................... 252

v
UNIT 7 SELECTION OF BUSINESS STRATEGIES AND
POLICIES ......................................................................... 259
A. Understanding Company Competitive Position ..... 259
B. The Process of Analyzing a Company’s
Competitive Strategy .................................................. 263
C. Factors Affecting Performance and Relative
Position of a Company in the Market ....................... 268
D. Strategic Position and Action
Evaluation (SPACE) ................................................... 272
E. Boston Consulting Group Matrix (BCG Matrix) ...... 272
F. Internal External Matrix (IE Matrix) ......................... 274
G. Market Penetration Strategy ...................................... 275
H. Market Development Strategy .................................. 278
I. Product Development Strategy ................................. 278
J. Backward Integration Strategy. ................................. 279
K. Forward Integration Strategy .................................... 280
L. The Horizontal Integration Strategy ......................... 281
M. Grand Strategy (GS) ................................................... 281
N. Quantitative Strategic Planning Matrix (QSPM)...... 283
O. Diversification Strategy .............................................. 285
P. Company's Ability to Execute Strategy .................... 293
Q. Maximizing Company Resources in Strategy
Implementation........................................................... 295
REFERENCE ..................................................................... 297
UNIT 8 EXECUTION OF BUSINESS STRATEGIES AND
POLICIES ......................................................................... 304
A. Definition of Strategy and Business Policy
Execution ..................................................................... 304
B. Implementation of Strategy and Business Policy..... 305
C. Implementation of Strategy into Work Programs ... 305
D. Techniques for Evaluating the Effectiveness of
Strategy Implementation............................................ 307
E. Connection Between Strategy Execution and
Policy Implementation ............................................... 316
F. The Importance of Business Policies in Guiding
Organizational Activities ........................................... 317

vi
REFERENCE .................................................................... 318
UNIT 9 BUSINESS STRATEGIES AND POLICIES IN
THE INTERNATIONAL MARKET ............................. 321
A. Understanding Business Strategies and Policies
in the International Market........................................ 321
B. Forms of International Strategies Based on
Flexibility and Global Efficiency ............................... 322
C. International Business Strategies Based on
Business Situation and Objectives ............................ 330
REFERENCE .................................................................... 341
UNIT 10 COMPANY HUMAN RESOURCE STRATEGY ........ 355
A. Definition of Human Resource Strategy and
Policy ........................................................................... 355
B. Approaches to HRM Strategy ................................... 355
C. HR Recruitment Strategy ........................................... 358
D. HR Selection Strategy ................................................ 366
E. HR Training Strategy ................................................. 368
F. Human Resource Compensation Strategy ............... 371
G. Strategic Career Alignment ....................................... 375
H. Talent Management Strategy. ................................... 376
I. E-HR Strategy. ............................................................ 380
REFERENCE .................................................................... 382
UNIT 11 COMPANY MARKETING STRATEGY ..................... 386
A. Definition of Company Marketing Strategy ............ 386
B. Benefits of an Effective Marketing Strategy in
Business Operations ................................................... 388
C. Characteristics of a Successful Marketing
Strategy ....................................................................... 390
D. Marketing Strategy Development Process ............... 392
E. Forms of Marketing Strategies .................................. 394
REFERENCE .................................................................... 403
UNIT 12 COMPANY FINANCIAL STRATEGY ........................ 413
A. Definition of Corporate Financial Strategy .............. 413
B. Main Areas of Corporate Finance Study .................. 414
C. Stages in Formulating Corporate Financial
Strategy ....................................................................... 420

vii
D. Forms of Corporate Financial Strategies................... 424
REFERENCE ..................................................................... 432
UNIT 13 CORPORATE OPERATIONS STRATEGY................. 440
A. Definition of Corporate Operations Strategy ........... 440
B. Importance of Corporate Operations Strategy ......... 441
C. Decision-Making Process in Operations
Management ............................................................... 441
D. Indicators and Strategies in Company
Operations ................................................................... 442
REFERENCE ..................................................................... 451
UNIT 14 ETHICS AND CORPORATE CULTURE..................... 454
A. Definition of Corporate Ethics ................................... 454
B. Forms of Corporate Ethics ......................................... 457
C. Models of Ethics and the Environment .................... 465
D. Impact of Ethical and Environmental
Relationships ............................................................... 468
E. Understanding Corporate Culture ............................ 471
F. The Importance of Corporate Culture ...................... 472
G. Models of Corporate Culture..................................... 473
H. Corporate Culture Styles ............................................ 477
I. Quality Corporate Culture ......................................... 480
REFERENCE ..................................................................... 482
UNIT 15 CORPORATE LEADERSHIP STRATEGY .................. 487
A. Understanding and Role of Leadership.................... 487
B. The Role of Leadership in Management ................... 490
C. Leadership Process in Management ......................... 492
D. Leadership Strategy Approaches .............................. 493
REFERENCE ..................................................................... 516
UNIT 16 EVALUATION OF BUSINESS STRATEGIES
AND POLICIES ............................................................... 528
A. Understanding Business Strategy and Policy
Evaluation ................................................................... 528
B. Stages of Business Strategy and Policy Evaluation .. 529
REFERENCE ..................................................................... 551
AUTHOR PROFILE ........................................................................ 553

viii
LIST OF FIGURES

Figure 1.1 Three Key Elements of a Good Strategy .................. 11


Figure 1.2 Characteristics of Strategic Management ................ 20
Figure 1.3 Differences Between Business Strategy
and Business Policy ................................................... 21
Figure 1.4 Factors Influencing Business Strategy ..................... 32
Figure 1.5 Factors Causing Changes in Business Strategies
and Policies ................................................................ 45
Figure 1.6 Levels of Business Strategy and Policy .................... 48
Figure 1.7 Development of Business Strategic Management
Theory......................................................................... 57
Figure 1.8 Benefits of Implementing Business Strategies and
Policies ........................................................................ 71
Figure 1.9 Failure of Business Strategies and Policies .............. 75
Figure 2.1 Dimensions of Business Strategy and Policy .......... 94
Figure 2.2 Implementation of Business Strategy Based on
SWOT........................................................................ 101
Figure 2.3 Business Strategy and Business Policy Process..... 103
Figure 2.4 Strategy Formulation Theory-
Fred R. David (2019) ................................................ 104
Figure 2.5 Strategy Formulation Process ................................. 107
Figure 2.6 Porter’s Generic Strategy Model (1980) ................. 109
Figure 2.7 Product Life Cycle (PLC) – Porter (1980) ................. 114
Figure 2.8 Strategies for Growing Businesses
– Porter (1980) .......................................................... 114
Figure 2.9 Strategy Formulation - Yoshida (2006) .................. 119
Figure 2.10 Strategy Formulation .............................................. 120
Figure 2.11 Kurt Lewin's Organizational Change Theory ....... 122
Figure 2.12 Theory of Leaders and Leadership Styles
by Kreitner & Kinicki .............................................. 124
Figure 2.13 Organizational Structure Theory by Max Weber . 125
Figure 2.14 Theory of Organizational Change by Chris
Argyris and Donald Schön ..................................... 126
Figure 2.15 The Learning Organization Peter Senge ................... 127
Figure 2.16 McGregor's Theory X and Theory Y ...................... 128

ix
Figure 2.17 Leadership Theory by Warrem Bennis .................. 130
Figure 2.18 Business Strategy and Policy Implementation
Theories..................................................................... 131
Figure 2.19 Forms of Business Models in the Era of
Industry 4.0............................................................... 140
Figure 3.1 Key Elements of a Vision ......................................... 155
Figure 3.2 Associated Word Generation .................................. 157
Figure 3.3 Success Word Generation........................................ 158
Figure 3.4 Steps in Formulating a Vision ................................. 159
Figure 3.5 Criteria for an Effective Mission ............................. 162
Figure 3.6 Important Elements of a Mission............................ 163
Figure 3.7 Steps in Developing a Mission ................................ 164
Figure 3.8 SMART Goals ........................................................... 165
Figure 3.9 The Importance of Company Values...................... 169
Figure 3.10 Steps to Formulate Company Values ..................... 170
Figure 4.1 Macro External Business Environment Analysis
(PESTEL) ................................................................... 186
Figure 4.2 Factors of Micro External Constraints .................... 190
Figure 5.1 Internal Business Environment............................... 202
Figure 5.2 Internal Business Environment............................... 209
Figure 5.3 Dimensions of the Internal Business
Environment ............................................................. 213
Figure 6.1 Generic Competitive Strategy ................................. 243
Figure 6.2 Characteristics of Cost Leadership Strategy .......... 245
Figure 6.3 Characteristics of Differentiation Strategy ............. 246
Figure 6.4 Characteristics of Cost Focus Strategy ................... 248
Figure 6.5 Characteristics of Differentiation Focus Strategy .. 249
Figure 6.6 Characteristics of Stuck in the Middle Strategy .... 251
Figure 7.1 The Process of Creating a Company’s
Competitive Advantage .......................................... 262
Figure 7.2 Process of Analyzing Company Competitive
Strategies ................................................................... 267
Figure 7.3 Stages of the Competitive Strategy Formulation
Analysis Process ....................................................... 268
Figure 7.4 Key Factors Influencing a Company's
Competitive Position ............................................... 271

x
Figure 7.5 Strategic Position and Action Evaluation
(SPACE) .................................................................... 272
Figure 7.6 BCG Matrix .............................................................. 274
Figure 7.7 Internal External Matrix (IE matrix) ...................... 275
Figure 7.8 Market Penetration Strategy ................................... 277
Figure 7.9 Internal External Matrix (IE matrix) ...................... 282
Figure 7.10 Quantitative Strategic Planning Matrix (QSPM) .. 284
Figure 7.11 Diversification Strategy........................................... 293
Figure 8.1 Stages of Implementing Strategy into Work
Programs .................................................................. 307
Figure 8.2 Steps for KPI Analysis ............................................. 316
Figure 9.1 Forms of International Strategy Viewed from
Global Integration and Local Responsiveness ...... 329
Figure 9.2 International Business Strategies Based
on Business Situation and Objectives .................... 340
Figure 10.1 Four Company Approaches to HRM Strategy ...... 358
Figure 10.2 Recruitment Strategy ............................................... 365
Figure 10.3 HR Selection Strategy .............................................. 367
Figure 10.4 Human Resource Training Strategy....................... 371
Figure 10.5 Compensasion Strategy .......................................... 375
Figure 10.6 Talent Management Strategy ..................................... 379
Figure 10.7 E-HR Strategy .......................................................... 381
Figure 11.1 Characteristics of a Successful Marketing
Strategy ..................................................................... 392
Figure 11.2 Marketing Strategy Development Process ............ 394
Figure 11.3 Forms of Marketing Strategies ............................... 402
Figure 12.1 Main Areas of Corporate Finance Study ............... 416
Figure 12.2 Considerations in Formulating Corporate
Financial Strategy .................................................... 421
Figure 12.3 Stages in Forming a Company's Financial
Strategy ..................................................................... 423
Figure 12.4 Forms of Corporate Financial Strategies ............... 424
Figure 13.1 Corporate Operation Strategy ................................ 450
Figure 14.1 Work Ethics .............................................................. 456
Figure 14.2 Corporat Internal Ethics.......................................... 462
Figure 14.3 Ethics and Environment Models ............................ 468

xi
Figure 14.4 Leadership Guidelines Related to Corporate
Culture ...................................................................... 477
Figure 14.5 Gaya Budaya Perusahaan........................................ 479
Figure 15.1 Elements of Successful Leadership Abilities ......... 489
Figure 15.2 Main Functions of Leadership ................................ 492
Figure 15.3 Leadership Process .................................................. 493
Figure 15.4 Traits of Successful Leadership .............................. 503
Figure 15.5 Vroom-Yetton Decision-Making Model................. 508
Figure 15.6 Behavioral Leadership Style.................................... 510
Figure 15.7 Leadership Approaches........................................... 515
Figure 16.1 Business Strategy and Policy Process ..................... 529
Figure 16.2 Business Strategy and Policy Process ..................... 550

xii
LIST OF TABLES

Table 1.1 Differences Between Business Strategy and


Business Policy ................................................................ 22
Table 1.2 Examples of Business Strategy....................................... 23
Table 1.3 Examples of Business Policy .......................................... 32
Table 2.1 Differences Between Strategy Formulation
and Strategy Implementation ........................................ 98
Table 3.1 Difference Between Vision and Mission ..................... 160
Table 4.1 Opportunity Factors of External Factors ..................... 193
Table 4.2 Threat Factors of External Factors ............................... 194
Table 4.3 EFAS Opportunities ...................................................... 195
Table 4.4 EFAS Threats ................................................................. 195
Table 5.1 Internal Strength Factors .............................................. 215
Table 5.2 External Threat Factors ................................................. 216
Table 5.3 Questionnaire Data Summary (Comparison
Between Variable Indicators) ....................................... 216
Table 5.4 Comparison Matrix ....................................................... 218
Table 5.5 Normalizing The Matrix............................................... 219
Table 5.6 Division of the Comparison Matrix by the Total
in Each Column 2 .......................................................... 219
Table 5.7 Normalizing The Matrix............................................... 220
Table 5.8 Weighting ...................................................................... 221
Table 5.9 Weakness Factors of Internal Factors .......................... 222
Table 5.10 Questionnaire Evaluation of Strength Factors............ 222
Table 5.11 IFAS ................................................................................ 223
Table 12.1 Three Decisions in Corporate Financial Strategy ....... 418
Table 14.1 The Multidimensional Work Ethic Profile (MWEP) .. 455

xiii
BUSINESS STRATEGY AND POLICY
IN THE DIGITAL EDGE 4.0

Aditya Wardhana

xiv
UNIT ANALYSIS OF

5
INTERNAL BUSINESS
ENVIRONMENT
ANALYSIS OF INTERNAL BUSINESS ENVIRONMENT

A. Definition of Internal Business Environment


Success in the business world depends on two main
elements: the business entity itself and its internal environment.
Business is an economic activity that generates revenue through
buying and selling, production, and providing additional
services that can be traded. Each company operates within a
specific business context and has a unique internal environment
(Suratman, 2021; Hans, 2019; Robbins, Coulter, Fernandez, 2019;
Needle, 2004). Internal factors such as employees, management,
and internal rules influence the company's operations. The
internal business environment includes the strengths, internal
elements, and institutions that a company must navigate to
achieve its objectives (Suratman, 2021; Hans, 2019; Raviasi and
Schultz, 2006; Needle, 2004).
To achieve a competitive advantage, companies must
focus on monitoring and adjusting to changes in their
environment. The internal environment is a crucial aspect that
needs attention as it relates to assessing the strengths and
weaknesses of the company's resources within its boundaries
(Wardhana et al., 2021; Zhao, Teng, and Wu, 2018; Purwanti,
Pudji., Fattah, and Muhammad, 2011). The internal environment
encompasses factors such as company culture, production
technology, organizational structure, and physical facilities that
impact managerial operations. Additionally, the internal
environment includes strengths within the organization that can

200
be controlled by management, including employees, the board
of directors, the board of commissioners, shareholders, and the
physical working conditions (Wardhana et al., 2021;
Dwiningrum, 2011; Purwanti and Fattah, 2011; Margaretta,
2012).
According to Syntia and Mulya (2018), organizations are
always in a state of mutual influence with their internal
environment. The interaction between business entities and their
internal factors results in various impacts. Changes in business
entities are usually responses to changes in the environmental
conditions in which they operate. Therefore, companies must
continuously adapt to the dynamics of changes in their internal
environment.
The internal business environment encompasses all
internal elements that affect business operations. This concept is
dynamic and includes aspects such as corporate governance
trends and internal resource management. To support the
development and use of business information and internal
decisions, companies need to have a robust conceptual
framework and policies. This framework will help the company
understand its internal business values, goals, and priorities
(Cherulinam, 2012).

B. Factors of Internal Business Environment


Suratman (2021) and Wardhana (2021) explain that the
internal environment is influenced by several factors, namely:
1. Workforce (Man). Workforce refers to individuals working
within the organization who receive compensation or income
from the company.
2. Capital (Money). Capital encompasses the funds needed to
support the continuity of business operations. Sources of
capital can include investments from owners or shareholders,
bank loans, or retained earnings (dividends) used for
purposes such as purchasing raw materials, paying employee
salaries, acquiring production equipment, and expanding or
constructing production facilities.

201
3. Materials/Raw Materials (Material). Materials refer to
various types of inputs in the production process, including
raw materials, work-in-progress, and other components used
in production.
4. Production Equipment (Machine). Production equipment
includes all supporting components that facilitate the
production process, including machinery, production tools,
and other components.
5. Methods (Methods/Managerial). Methods encompass
structured work procedures (Standard Operating
Procedures/SOP) and the managerial capabilities of
company leaders in executing various business operations.

Thus, these factors form key aspects of the internal


environment of an organization and play a crucial role in
determining the performance and sustainability of company
operations.

Figure 5.1 Internal Business Environment


Source: Suratman (2021) and Wardhana (2021)

202
Wardhana et al. (2021) and Hans (2019) indicate that the
internal business environment involves elements within the
business entity that influence its approach and operational
success, including:
1. Organizational Culture. This internal environmental factor
involves the cultural elements within the business entity that
affect the atmosphere and organizational characteristics. It is
often referred to as the system of values, value framework,
vision, norms, and habits held by members of the business
entity. Business culture impacts how employees interact, both
among themselves and with customers, as well as with other
stakeholders. Value systems and ethical standards are also
crucial considerations for many companies when selecting
suppliers, distributors, partners, and so on. Some aspects of
organizational culture (Schein, 2018; Bakhri and Daryono,
2017; Herath and Walls, 2017; Kumar, 2016; Lee and Jennifer,
2014; Cameron and Quinn, 2011; Hans, 2016) include:
a. Company Values. Values embraced by organizational
members, such as integrity, innovation, or sustainability.
b. Organizational Norms. Rules and guidelines governing
member behavior in various situations.
c. Work Habits. Typical ways of performing daily tasks,
work processes, and routines that are part of the
organization's daily operations.
d. Vision and Mission. Long-term goals and strategic
approaches set by the organization to achieve its vision
and mission.
e. Communication Culture. How information is
communicated and managed within the organization,
including transparency and information sharing.
f. Collaboration Culture. The extent to which cooperation
and collaboration are emphasized within the
organization.
g. Leadership Culture. The dominant leadership style and
values upheld by the organization's leaders.

203
h. Employee Satisfaction and Well-being. The
organization's focus on employee well-being and
satisfaction as part of the company culture.
i. Flexibility and Innovation. The extent to which the
organization encourages diverse ideas, innovation, and
flexibility in their business approach.
j. Customer Culture. Focus on customer satisfaction and
high-quality service.

2. Organizational Direction or Company Leadership. This


factor can also be known as the role of leadership within an
organization. The role of company leadership, along with
internal dynamics such as management structure, is a crucial
internal business factor. The managerial leadership style and
management approach of the business entity can have a
significant impact on organizational culture. Cultural
implications, such as positive or negative nature, level of
harmony in collaboration, effectiveness of communication,
and values applied to employees, can emerge from this
leadership approach. Often, companies establish formal
structures or guidelines that include mission and vision
statements. These statements, which are proactive toward the
future business direction, will form the basis for decision-
making and execution of business activities. Examples of
Organizational Direction or Company Leadership may
include (Groysberg, Lee, Price, Cheng, 2018; Tsai, 2011):
a. Transformational Leadership Style Leaders encourage
employees to achieve their best potential through
inspiration, motivation, and shared vision understanding.
b. Democratic Leadership Style. Leaders invite
participation and contributions from the entire team or
organizational members in decision-making.
c. Authoritarian Leadership Style. Leaders make decisions
with minimal group involvement, providing clear
direction and strong control.

204
d. Value-Based Leadership. Leaders and the organization
prioritize certain values, such as integrity, sustainability,
or fairness, in decision-making and actions.
e. Collaborative Leadership Style. Leaders promote
collaboration and teamwork at all levels, creating an
inclusive work culture.
f. Innovation-Oriented Leadership. Leaders encourage
creative ideas, experimentation, and innovation in
business processes.
g. Employee Well-being Focused Leadership. Leaders place
emphasis on employee well-being, satisfaction, and
development as a primary priority.
h. Visionary Leadership Style. Leaders have a long-term
vision that inspires and provides direction for the entire
organization.

3. Company Vision, Mission, and Objectives. This factor refers


to the vision and mission of the organization. The mission and
objectives of a company provide guidance on the business
scope, priorities, development direction, business
philosophy, policies, and other aspects. Biofarma's drive to
enter international markets and expand its business is driven
by its mission to become a global pharmaceutical company
based on biotechnology expertise. This mission aims to
achieve global dominance in specific business areas by
leveraging core competencies through sustainable products
and technical innovations, customer needs orientation, and
cost-efficiency focus. The company's entire development
strategy, including portfolio strategy, reflects the necessary
drive across various organizational functions to support the
achievement of this mission in the future. Each company has
a unique vision, mission, and objectives, reflecting core
values, aspirations, and commitments to various aspects,
including innovation, sustainability, customer service,
growth, and social responsibility. Here are examples from a
company (Suratman, 2021; Wardhana, 2021):

205
a. Vision. "To be a global leader in technology innovation
that empowers everyday life and creates a positive impact
on society."
b. Mission. "To produce and develop advanced technology
solutions that enhance the quality of life for our customers,
while considering environmental and social impacts
sustainably."
c. Objectives.
1) Sustainable Innovation. To produce at least two
innovative products each year that transform how
people live and work.
2) Environmental Sustainability. To reduce carbon
emissions per unit of production by 20% over the next
five years and achieve eco-friendly certifications for all
major products.
3) Superior Customer Service. To increase customer
satisfaction levels to over 90% within two years
through responsive customer service and reliable
technical solutions.
4) Global Growth. To expand global presence by
entering new markets in at least three countries within
the next three years.
5) Social Responsibility. To contribute to local
communities through corporate social responsibility
programs, including education and local infrastructure
development.

4. Management Structure and Characteristics. Structure refers


to the way or hierarchical relationships in which tasks and
sub-tasks within an organization are organized. Factors such
as organizational structure, Board of Directors composition,
management professionalism, and other elements have a
significant impact on business decision-making. Some types
of structures and management styles can slow down the
decision-making process, while others facilitate rapid
decision-making. The Board of Directors acts as the highest

206
decision-making body that sets the direction for
organizational development and oversees performance,
making the quality of the Board of Directors a key factor in
company development and performance. Management
Structure and Characteristics can vary depending on the
industry type, company size, and business strategy adopted.
Choices regarding organizational structure, Board of
Directors composition, management professionalism,
decision-making styles, and approaches to innovation can
contribute to a company's unique characteristics. Here are
examples of Management Structure and Characteristics from
a company (Suratman, 2021; Wardhana, 2021; Susilowati and
Basuki, 2005):
a. Organizational Structure. Company ABC implements a
matrix organizational structure, where employees have
two reporting lines: one based on their function (e.g.,
marketing, production) and one based on specific projects
being undertaken.
b. Board of Directors Composition. The Board of Directors
consists of professionals with diverse expertise, including
finance, technology, and business strategy. Special
committees are formed to address issues such as audit,
compensation, and sustainability.
c. Management Professionalism. The company's
management demonstrates a high level of professionalism
with a solid education and extensive work experience in
the relevant industry. Training and employee
development are priorities to ensure consistent levels of
expertise.
d. Decision-Making Style. The company adopts a
participative decision-making style, where important
decisions involve contributions from various levels and
functions within the organization, encouraging
collaboration and shared understanding.

207
e. Innovation and Flexibility. The structure that promotes
innovation is integrated with organizational flexibility.
Innovation project teams are formed periodically,
allowing creativity and adaptability in responding to
market changes.

5. Workforce and Human Resources. Characteristics of the


workforce, such as skills, quality, ethics, commitment,
attitudes, and others, can contribute to the strengths and
weaknesses of an organization. Some organizations face
difficulties in restructuring or modernizing due to resistance
from employees, while such processes may proceed more
smoothly in other organizations. Human Resource
Management is becoming increasingly relevant in business
management, alongside the growing role of business
intelligence and business ethics policies. Various factors
shape the characteristics of Workforce and Human Resources
within an organization, which in turn can impact the
company's performance and success. Examples of
characteristics of Workforce and Human Resources in an
organization (Suratman, 2021; Wardhana, 2021):
a. Skills and Expertise. For example, a technology company
has employees with high skills in software development,
artificial intelligence, and cutting-edge technology.
b. Quality and Work Ethics. For example, a renowned
restaurant is known for its high-quality customer service
and good work ethics, reflected in consistent customer
satisfaction.
c. Morale and Commitment. For example, a non-profit
organization has staff deeply committed to their social
mission, reflecting high morale and dedication to positive
societal impact.
d. Attitudes and Organizational Culture. For example, a
start-up company promotes a relaxed and collaborative
work culture, with employees having proactive and
innovative attitudes.

208
e. Adaptability and Flexibility. For example, a successful e-
commerce company has a highly adaptive team to market
changes, with employees quickly adjusting to new
technologies and consumer trends.
f. Diversity and Inclusivity. For example, a multinational
company promotes diversity and inclusivity, with teams
encompassing a variety of cultural backgrounds and
expertise.
g. Human Resource Management. For example, a
company's HR division focuses on employee development
through ongoing training, employee wellness programs,
and effective performance management.

Figure 5.2 Internal Business Environment


Source: Wardhana et al. (2021) and Hans (2019)

C. Importance of Internal Business Environment


The internal business environment is crucial because it has
a direct impact on an organization's performance, productivity,
and sustainability, encompassing various factors that originate
from within the company and can be controlled by management.
Overall, focusing on the internal business environment helps the
company to optimize resources, build a supportive culture, and

209
create conditions favorable for long-term growth and
sustainability. Some examples of the importance of the internal
business environment and examples include (Schrodt, 2002):
1. Operational Efficiency. For example, an efficient
management system and well-structured operational
processes can enhance employee productivity and optimize
resource use, thereby supporting the company's growth.
2. Employee Satisfaction. For example, a positive work culture,
employee development programs, and supportive
management can increase employee satisfaction, which in
turn affects retention rates and individual performance.
3. Product or Service Quality. For example, well-managed
production processes and strict quality control can produce
high-quality products or services, build a positive reputation,
and increase customer satisfaction.
4. Innovation and Product Development. For example,
adopting an innovation culture and investing in research and
development can create an environment that supports the
creation and launch of new products that meet market needs.
5. Business Strategy and Management Decisions. For example,
effective management in formulating and implementing
business strategies, including goal setting, resource
allocation, and risk management, can lead to achieving
company targets.
6. Organizational Culture. For example, a company culture
that promotes collaboration, creativity, and accountability
can create a positive work environment, enhance team spirit,
and support the achievement of shared goals.
7. Financial Management and Risk Management. For example,
a good financial management system and effective risk
management can help the company manage finances wisely,
avoid unnecessary risks, and maintain financial stability.

210
D. Dimensions of the Internal Business Environment
Wardhana (2021) and Hans (2019) state that the internal
business environment can be described through various
dimensions that encompass key aspects of an organization's
operations and management. Each of these dimensions interacts
and influences one another to create a unique internal business
environment for each organization. Recognizing and
understanding these dimensions helps management design
effective strategies, improve efficiency, and achieve the
company’s business objectives. Some main dimensions of the
internal business environment include:
1. Organizational Structure. Refers to how tasks and
responsibilities are organized and linked within a company.
Examples include hierarchical structure, matrix structure, or
team-based structure.
2. Organizational Culture. Includes the shared values, norms,
and beliefs that shape how people interact and work within
the organization. Examples include innovative culture,
result-oriented culture, or collaborative culture.
3. Human Resources. Concerns aspects of employees such as
expertise, morale, commitment, and skills that can impact
company performance. Examples include workforce quality,
employee satisfaction levels, and employee retention rates.
4. Operational Management. Includes processes and policies
used to manage the company's daily activities. Examples
include production processes, supply chain management,
and quality control policies.
5. Finance and Risk Management. Involves the management of
company finances and efforts to identify, measure, and
manage risks. Examples include financial reports, budgeting,
and risk management policies.
6. Technology and Information Systems. Related to hardware,
software, and information systems that support operations
and decision-making in the company. Examples include IT
infrastructure, business applications, and analytics platforms.

211
7. Innovation and Product Development. Concerns the
company's ability to generate new ideas, develop products,
and maintain competitiveness. Examples include research
and development processes, product portfolio, and
innovation strategies.
8. Marketing Management. Related to the marketing team,
marketing strategies, organizational culture focused on
marketing orientation, marketing values, and customer
relationship sustainability. Examples include customer
satisfaction orientation, product innovation, and quick
response to market trends.
9. Policies and Compliance. Related to the company’s internal
policies and compliance with external regulations and norms.
Examples include security policies, sustainability policies,
and legal compliance.
10. Internal Accounting. Plays a crucial role in providing
accurate and relevant financial information to company
management, helping them make informed and strategic
decisions. Internal accounting involves recording, reporting,
and analyzing the company’s financial activities for internal
management purposes. Examples include transaction
recording, financial reporting, cost analysis, budgeting,
performance measurement, investment evaluation, internal
auditing, and compliance with applicable rules and
regulations.

212
Figure 5.3 Dimensions of the Internal Business Environment
Source: Wardhana (2021) & Hans (2019)

E. Internal Factors Analysis (IFAS) Matrix


The Internal Factors Analysis (IFAS) Matrix provides a
clearer picture of the key factors affecting a company's success
within its internal environment. The steps to develop the Internal
Factors Analysis (IFAS) Matrix are as follows:
1. Identify 5 to 10 key internal factors that are crucial to the
success of the organization or company.

2. Assign weights to each factor, with a range from 0.0 (not


important) to 1.0 (most important). These weights reflect the
relative importance of each factor to the company's success in
the given environment or industry. The total weight of all
factors should equal one (1.0) or 100%, indicating the overall

213
impact of all key factors on the company. The formula for
calculating weights is:

∑ 𝐴𝑠𝑠𝑒𝑠𝑠𝑚𝑒𝑛𝑡 𝑜𝑓 𝐸𝑎𝑐ℎ 𝐼𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟


𝑊𝑒𝑖𝑔ℎ𝑡 =
∑ 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑠𝑠𝑚𝑒𝑛𝑡 𝑅𝑒𝑠𝑢𝑙𝑡 𝑜𝑓 𝐴𝑙𝑙 𝐼𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟𝑠

3. Assign a rating of 1 to 4 to each critical success factor. The


rating is based on the state or condition of the internal
environment (1 = very small strength or weakness; 2 = small
strength or weakness; 3 = large strength or weakness; 4 = very
large strength or weakness). The formula for calculating the
rating is:

∑ 𝐴𝑠𝑠𝑒𝑠𝑠𝑚𝑒𝑛𝑡 𝑜𝑓 𝐸𝑎𝑐ℎ 𝐼𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟


𝑅𝑎𝑡𝑖𝑛𝑔 =
∑ 𝑅𝑒𝑠𝑝𝑜𝑛𝑑𝑒𝑛𝑡

4. Multiply the weight of each internal factor by its rating to


obtain the weighted score for each factor. The formula for
calculating the weighted score is:

𝑊𝑒𝑖𝑔ℎ𝑡𝑒𝑑 𝑉𝑎𝑙𝑢𝑒 = 𝑊𝑒𝑖𝑔ℎ𝑡 𝑥 𝑅𝑎𝑡𝑖𝑛𝑔

5. Sum the weighted scores of all factors to obtain the total


weighted score for the internal environment.

6. The total weight of all internal factors faced by the company


is 1, indicating the extent of the influence of the internal
environment, whether strengths or weaknesses, on the
company's performance is 1 or 100%.

7. The rating reflects the perception of the condition of internal


factors, with scores of 1 and 2 indicating strengths, while
scores of 3 and 4 indicate weaknesses. The cutoff point for
internal factor conditions is set at a value of (1+4)/2 = 2.5,
with the rating range between 1 and 4.

214
8. Based on the weighted score calculation in the Internal
Factors Analysis Summary Matrix (IFAS) above, a result of
3.97 is obtained. This figure indicates that the company
generally faces strengths, as the IFAS score of 2.45 is lower
than the cutoff value of 2.5 (value 2.45 < 2.5).

9. After completing the analysis and diagnosis of the internal


environment or factors, whether strengths or weaknesses, the
next step is to justify the strengths or weaknesses faced. If the
analysis results in a score below the cutoff value, it can be
concluded that changes in internal factors pose weaknesses
for the company. Conversely, if the analysis shows a score
above the cutoff value, it indicates that internal factors
provide strengths. Based on these strengths and weaknesses,
strategic planners can consider appropriate company
strategies after obtaining information about the company's
strengths or weaknesses. Thus, it can be concluded that
internal factor analysis results allow us to identify the
strengths and weaknesses arising from changes in the
internal environment.

Example of Internal Factors of a Company


The strengths of PT. XYZ were identified through an
evaluation involving interviews between the researcher and the
company's Director and staff, as well as observations at PT. XYZ.
Some of the strengths that can be identified are as follows:

Table 5.1 Internal Strength Factors

No. Strength Variable Indicators


1 Supporting Service Facilities
2 Service Quality
3 Coordination and Employee Relations
4 Company Collaboration with Vendor Companies
5 Competitive Pricing of Company Products

215
Table 5.2 External Threat Factors

No. Threat Variables Indicators


1 Company Location
2 Lack of Promotional Media
3 Lack of Product Variety
4 Availability of product services to meet consumer needs
5 Product Pricing Dependent on Supplier Prices

F. IFAS Matrix
After identifying the strategic internal factors of a
company, an IFAS table is created to detail these factors in terms
of strengths and weaknesses. The IFAS table includes internal
factors, weights, ratings, and scores. The process involves
organizing the factors of strength and weakness, followed by
calculating the weights, ratings, and scores using data obtained
through questionnaires distributed to top-level management,
consisting of five respondents.
To create the IFAS weight calculation table, the initial
stage involves identifying the factors. After that, each factor is
detailed into a questionnaire distributed to the respondents.
Subsequently, the data from the questionnaire distribution is
processed through specific steps to determine the weights in the
IFAS table. Here is an example of the weight calculation process
using the strength variable indicator, which is service quality.

Table 5.3 Questionnaire Data Summary (Comparison Between


Variable Indicators)
Responden
Element A Geomean Element B
1 2 3 4 5
Supporting Service
0.11 0.14 1 0.14 0.20 0.21
service quality
facilities Coordination
and
0.11 0.14 0.33 0.14 0.20 0.17 relationships
between
employees

216
Responden
Element A Geomean Element B
1 2 3 4 5
Company
0.11 0.14 0.20 0.14 0.20 0.15 collaboration
with vendors
The
company’s
products
0.11 0.14 1 0.13 0.13 0.9
have
competitive
prices
Service Coordination
quality and
9 5 1 1 2 2.46 relationships
between
employees
Company
9 5 1 1 1 2.14 collaboration
with vendors
The
company’s
products
1 1 1 3 3 1,55
have
competitive
prices
Coordination Company
and 1 1 4 3 2 1.89 collaboration
relationships with vendors
between The
employees company’s
products
1 1 1 3 2 1.43
have
competitive
prices
Company The
collaboration company’s
with vendor products
1 1 0.25 1 1 0.75
companies have
competitive
prices

In summarizing the results of the questionnaire


distribution, the data is organized into tabulation. The
questionnaire responses are applied to comparisons between
variable indicators. Next, for each factor, a geomean calculation

217
is performed using the formula =GEOMEAN. For example, in
the comparison between service support facilities (Element A)
and service quality (Element B), the formula = GEOMEAN
(questionnaire data from respondents 1-5) is used, resulting in a
geomean value of 0.21. This process is repeated for each involved
factor. The following steps are then taken:
1. Create a Comparison Matrix

Table 5.4 Comparison Matrix


Coordination Company
Supporting and Cooperation products
Service
service relationship with vendor have
quality
facilities between companies competitive
employees prices
Supporting
service 1 0.21 0.17 0.15 0.19
facilities
Service
4.76 1 2.46 2.14 1.55
quality
Coordination
and
relationship 5.88 0.41 1 1.89 1.43
between
employees
Cooperation
with vendor 6.67 0.47 0.53 1 0.75
companies
Company
products have
5.26 0.65 0.70 1.33 1
competitive
prices

In this step, the geomean values obtained from the data


recap are transferred into the process table to form a
comparison matrix, as indicated by the blue numbers. Next,
the calculation for service quality is performed using the
value 1/0.21, reflected in the grey number, resulting in a
value of 4.76.

218
2. Creating the Normalizing the Matrix by summing each
column of the factors.

Table 5.5 Normalizing The Matrix


Coordination Company
Supporting and Cooperation products
Service
service relationship with vendor have
quality
facilities between companies competitive
employees prices
Supporting
1 0.21 0.17 0.15 0.19
service facilities
Service quality 4.76 1 2.46 2.14 1.55
Coordination
and relationship
5.88 0.41 1 1.89 1.43
between
employees
Cooperation
with vendor 6.67 0.47 0.53 1 0.75
companies
Company
products have
5.26 0.65 0.70 1.33 1
competitive
prices
Total 23.57 2.74 4,86 6.51 3.92

Sum the column for service quality with the values 0.21
+ 1 + 0.41 + 0.47 + 0.65 = 2.74 as the total sum. The next step
is to input the values from the business ecosystem division
0.21/2.74 and do the same for all the numbers in the column.

3. The values in the comparison matrix are divided by the total


in each column 2

Table 5.6 Division of the Comparison Matrix by the Total in Each


Column 2
Coordination Company
Supporting and Cooperation products
Service
service relationship with vendor have Total
quality
facilities between companies competitive
employees prices
Supporting
service 0.04 0.77 0.03 0.23 0.05 1.12
facilities

219
Coordination Company
Supporting and Cooperation products
Service
service relationship with vendor have Total
quality
facilities between companies competitive
employees prices
Service
0.20 0.36 0.51 0.33 0.40 1.80
quality
Coordination
and
relationship 0.25 0.15 0.21 0.9 0.36 1.26
between
employees
Cooperation
with vendor 0.28 0.17 0.11 0.15 0.19 0.90
companies
Company
products
have 0.,22 0.24 0.14 0.20 0.26 1.06
competitive
prices

Indicated by the grey-colored values, the result of dividing


the business ecosystem, 0.21/2.74, is 0.77 and is placed in the
same column. Next, sum up the service quality with values
consisting of 0.20+0.36+0.51+0.33+0.40 = 1.80 as the total, and do
the same for all existing factors.

4. After calculating the sum of column 3, recalculate the


Average, Weight Sum Vector, Consistency Vector, and
Weight Value.

Table 5.7 Normalizing The Matrix


Weighted
Vector Weight of
Total Average Sum
Consistency Value (%)
Vector
1.12 0.22 0.41 1.84 22
1.80 0.36 2.73 7.59 36
1.26 0.25 2.33 9.33 25
0.90 0.18 2.10 11.70 18
1.06 0.21 2.01 9.60 21

220
In business ecosystem analysis, the average of the
previous business ecosystem total is calculated as 1.80/5,
derived from 5 comparison factors, resulting in 0.36. Next, the
Weight Sum Vector (SWV) is calculated using the formula
"=MMULT". For example, for the service quality variable, we use
"=MMULT" to multiply the service quality block from the first-
stage comparison matrix horizontally with the entire average
block vertically, resulting in a value of 2.73.
To achieve the consistency vector, we divide the sum
weight vector (SWV) by the average, such as for service quality,
which has an SWV of 2.73/0.36 as the average, resulting in a
consistency vector value of 7.58. Additionally, the weight value
(%) is calculated by multiplying the average service quality (0.36)
by 100, resulting in a value of 36.

5. Weighting

Table 5.8 Weighting


No. Strength Variable Indicators Weight
1 Supporting Service Facilities 0.22 0.19
2 Service Quality 0.36 0.31
3 Coordination and Employee Relations 0.25 0.22
Company Collaboration with Vendor
4 0.18 0.15
Companies
Competitive Pricing of Company
5 0.21 0.18
Products
Total 0.86

The value of the service quality variable indicator,


which is 0.31, comes from the multiplication of 0.36 by 0.86.
The number 0.36 represents the average of the service quality
variable indicator, and the result is multiplied by the average
strength variable, which is 0.86, and then by 37. The weighted
result of the service quality variable indicator, which is 0.31,
is then entered into the IFAS Table.

221
Table 5.9 Weakness Factors of Internal Factors
No. Threat Variables Indicators Bobot
1 Company Location 0.03
2 Lack of Promotional Media 0.03
3 Lack of Product Variety 0.01
4 Availability of product services to meet 0.04
consumer needs
5 Product Pricing Dependent on Supplier 0.02
Prices
Total 0.13

6. Evaluation
The evaluation is based on the results from the
questionnaire regarding the current conditions:

Table 5.10 Questionnaire Evaluation of Strength Factors


Respondent
No Variabel Indicator Value
1 2 3 4 5
Supporting Service
1 4 4 3 3 3 3.40
Facilities
2 Service Quality 4 3 3 3 3 3.20
Coordination and
3 4 3 4 3 3 3.40
Employee Relations
Company
4 Collaboration with 4 3 3 3 3 3.20
Vendor Companies
Competitive Pricing of
5 4 4 4 4 4 4.00
Company Products

From the table above, it is evident that the


questionnaire results for the service quality variable indicator
achieved a score of 3.20. This score was obtained from the
second part of the questionnaire, which evaluates the current
conditions. The questionnaire distribution involved filling in
columns for each variable indicator, and the score of 3.20
represents the average result from five participating

222
respondents. Next, the evaluation score of 3.20 is entered into
Table 5.11 IFAS, specifically in the Rating column for the
service quality variable indicator.

Table 5.11 IFAS


No Variabel Indicator Weight Rating Score
Strength Factors
Supporting Service
1 0.19 3.40 0.65
Facilities
2 Service Quality 0.31 3.20 0.99
Coordination and
3 0.22 3.40 0.75
Employee Relations
Company Collaboration
4 0.15 3.20 0.48
with Vendor Companies
Competitive Pricing of
5 0.18 4.00 0.72
Company Products
Total of Strength
3.59
Factors
Weakness Factors
1 Company Location 0.03 3.00 0.09
Lack of Promotional
2 0.03 2.40 0.07
Media
3 Lack of Product Variety 0.01 2.80 0.03
Availability of product
4 services to meet 0.04 3.20 0.13
consumer needs
Product Pricing
5 Dependent on Supplier 0.02 2.80 0.06
Prices
Total of Weakness
0.38
Factors
Total 1,00 3.97

The analysis of the IFAS matrix presented in the table


above shows the strength and weakness factors identified
through interviews and observations. After compiling the
IFAS, the top five strength factors include Supporting

223
Facilities, Service Quality, Coordination and Relationships
Among Employees, Cooperation with Vendor Companies,
and Competitive Pricing. Through the questionnaire and
AHP calculations, the Service Quality factor stands out with
the highest weight of 0.99, indicating a significant impact on
the company's growth. Conversely, the lowest strength factor
is Cooperation with Vendor Companies, with a weight of
0.15, indicating its lower importance compared to other
strength factors in the growth of PT XYZ.
On the weakness side, the scores highlight factors such
as Company Location, Lack of Promotional Media, Lack of
Product Variety, Availability of Product Services to Meet
Consumer Needs, and Product Pricing Dependent on
Supplier Prices. The factor Availability of Product Services to
Meet Consumer Needs has the highest weight of 0.04,
indicating a high level of importance in the company's
growth. Meanwhile, the factor Lack of Product Variety has
the lowest weight of 0.01, indicating a lower level of
importance compared to other weakness factors in PT XYZ's
growth. The overall score on the IFAS table is 3.97, with a
strength score of 3.59 and a weakness score of 0.38, showing
that the company's strengths are more dominant than its
weaknesses.

224
REFERENCE

Bakhri, Syaiful., Daryono., Suharnomo. (2017). The Role of Strong


Organizational Culture to Increase the Organization
Competitiveness. Proceedings of the Burapha University
International Conference 2017, 3-4 August 2017, Bangsaen,
Chonburi, Thailand, 8(6), 80-91

Cameron, S. Kim., Quinn, E. Robert. (2011). Diagnosing and Changin


Organizational Culture: Based on the Competing Values
Framework. San Fransisco: Joh Wiley & Sons, Inc

Cherulinam, Francis. (2012). Business Environment: Text and Cases.


Mumbai: Himalaya Publishing House

Deal, Terrence E., Kennedy, Allan A., et al (2000). The New Corporate
Cultures: Revitalizing TheWorkplace After Downsizing, Mergers,
And Reengineering. New York: Pearsus.

Groysberg, Boris., Lee, Jeremiah., Price, Jesse., Cheng, Yo-Jud.


(2018). The Leader's Guide to Corporate Culture: How to
Manage the Eight Critical Elements of Organizational Life.
Harvard Business Review, 96(1), 44-52

Hans, V. Basil. (2019). Business Environment-Conceptual


Framework and Policies. International Educational Scientific
Journal, 4(3), 67-74

Hans V. Basil (2016). Role of Role and Responsibilities of Managerial


Economists: Empowering Business through Methodology
and Strategy. Nitte Management Review, 10(2), 27-43

Herath, Siriyama Kanthi., Walls, Tiara M. (2017). Defining


Corporate Culture and Identifying Its Role in Asian
Countries: A Review of Literature. American International
Journal of Humanities and Social Science, 3(3), 1-11

Kumar, Ashok. (2016). Redefined and Importance of Organizational


Culture. Global Journal of Management and Business Research:
Administration and Management, !6(4), 15-18

225
Lee, Choong Y., Lee, Jennifer Y. (2014). South Korean Corporate
Culture and Its Lessons for Building Corporate Culture in
China. The Journal of International Management Studies, 9(2),33-
42

Needle, David (2004). Business in Context: An Introduction to Business


and Its Environment. New York: Thomson

Purwanti, Pudji., Fattah, Muhammad. (2011). Basic Management


module 3: Environmental Management Organization. Malang:
UniversitasBrawijaya

Raviasi, D.; Schultz, M. (2006). Responding to Organizational


Identity Threats: Exploring The Role of Organizational
Culture. Academy of Management Journal, 49(3), 433-458.

Robbins, Stephen P., Coulter, Mary., Fernandez, Agna. (2019).


Management. India: Pearson

Schein, Edgar H. (2018). Organizational Culture and Leadership. San


Francisco: Jossey-Bass

Schrodt, P (2002). The Relationship between Organizational


Identification and Organizational Culture: Employee
Perceptions of Culture and Identification in A Retail Sales
Organization. Communication Studies, 53, 189-202.

Suratman, Adji. (2021). Analisis Lingkungan Bisnis dan Hukum: Konsep


dan Permasalahan. Jakarta: Mandala Nasional.

Susilowati, I., & Basuki. (2005). Dampak Kepemimpinan Dan


Lingkungan Kerja Terhadap Semangat Kerja. Jurnal JRBI,
1(1), 31-47

Syntia, Rita., Mulya, Miswar Budi. (2018). The Effects of Internal and
External Environment on SMEs Empowerment-based
Environmental Management. International Conference on
Multidisciplinary Research, 6-3-608

Tsai, Y. (2011). Relationship between Organizational Culture,


Leadership Behavior and Job Satisfaction. BMC Health
Services Research, (11)1, 98-105.

226
Wardhana, Aditya. (2023). Strategi dan Kebijakan Bisnis Di Era Digital.
Purbalingga: Eureka Media Aksara

Wardhana, Aditya. (2021). Ilmu Manajemen: Teori dan Aplikasi.


Bandung: Media Sains Indonesia

Zhao, Hailin; Teng, Haimeng; Wu, Qiang. (2018). The Effect of


Corporate Culture on Firm Performance: Evidence from
China. China Journal of Accounting Research, 11(1), 1-19

227
AUTHOR PROFILE

Dr (Cand). Aditya Wardhana, S.E., M.Si.,


M.M., CHRMP, CIRP, CHRA, CPP, CHRBP
The author is a permanent lecturer at Telkom
University, Indonesia. He completed his
Bachelor of Economics studies at Padjadjaran
University in 1997 as the best graduate.
Then, the author completed his Master of
Science studies at Padjadjaran University in 2003 and his Master of
Management Studies at Pasundan University in 2012 as the best
graduate—currently, the author is a Doctoral candidate in
Management Science at Pasundan University.
The author has expertise in Marketing, Human Resource (HR), and
Strategic Management. The author has Marketing practitioner at
Citibank NA, one of the largest banks in the world and HR
practitioner experience in the section of Human Capital at PT
Perusahaan Gas Negara Tbk, one of the state-owned enterprises
(SOEs) in the oil and gas sector in Indonesia, as well as as a strategic
consultant in various State-Owned Enterprises (SOEs) such as PT
Surveyor Indonesia, PT Indonesia Ship Classification Agency (PT
BKI), PT Pertamina, PT BNI 46, PTPN VIII West Java, PT Biofarma,
as well as in the Indonesian Ministry of Economic Coordinator, and
the Ministry of Transportation. The author has certifications in the
field of HR, namely The Certified Human Resources Management
Professional (CRMP), Certified Industrial Relations (CIRP),
Certified Human Resources Analyst (CHRA), Certified Personality
Practitioner (CPP), and Certified Human Resources Business
Partner (CHRBP). The author actively writes more than 500 books
in business and management and has Non-Fiction Book Author
Certification from the National Professional Certification Agency
(BNSP)-Republic of Indonesia. The author was awarded as a
lecturer with the best research performance in West Java and Banten
from LLDIKTI Region IV in 2022.

553
554
View publication stats

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy