A firm’s internal environment comprises of elements inside the business, such as the firm’s staffs, administration, and more so the firm’s business culture that acts as a guideline for the staff’s behavior and mannerism. Albeit a number of elements impact wholly on the organization, others impact on the administration, specifically the manager. The theoretical or leadership methods of a manager have a direct impact on the rest of the staff. Whether to apply the traditional or progressive method of leadership is upon the manager to decide. The former involves giving implicit directives to employees while the latter entails empowerment of employees (Romney & Steinbart, 2006). This paper discusses the internal environment and in general analyses, the internal environment of the GO-GO Corporation identifies probable problems noticed in it and evaluates the problems relatively with internal environment perceptions.
There are various aspects of the internal environment of an organization discussed independently here. The firm’s mission statement details the stance of the firm, its raison d’être, explaining it in conjunction to its uniqueness in its market, in particular, its intended customers, its products, its location, and the philosophies the firm aligns itself with. Company policies entail directives governing the handling of certain situations in the firm. The official structure of a firm encompasses tasks and staff in a hierarchy, a determination of information movement, responsibility of each sector and the decision-making department (“Summary of Sarbanes-Oxley Act of 2002,” n.d.). Organizational culture is described as the personality of an organization, and is made up of the values/beliefs defining success of employees, heroes denoting exemplary individuals in the organization, norms/rituals which denotes practices of cognition and award of best-performing employees and finally social network which denotes the casual channel of communication in the organization.
The other three major aspects of an organization’s internal environment are the company culture, resources, and theory/philosophy of administration. The company culture extends to the ambiance of an organization which includes; the general tone of the business environment and the morale of employees. The employees’ attitudes determine the positivity or negativity of the business environment whereas the quotidian relation and interaction amongst workers denote the climate of the organization (Romney & Steinbart, 2006). Resources encompass human and non-human resources within an organization. The employees comprise the human resources whilst data, amenities, infrastructure, machines, tools, supplies, and funds comprise the non-human resources. The non-human resources complement the valuable assets of any organization: employees. Philosophy of administration entails the style of leadership embraced by management, which is usually tied to productivity and performance of the organization. The determinants of a way of leadership are manager’s beliefs, the involvement of employees in decision making and empowerment of employees within an organization.
The following is an in-depth analysis of a visit to G0-Go Corporation headquarters, listed on the NYSE, as an audit supervisor. The aim of the visit was getting acquainted with topnotch personnel and conduction of prior review of Go-Go’s accounting structures. The meeting with the Go-Go’s audit committee indicated a shortcoming within its audit committee in that, article 301 of the Sarbanes–Oxley Act obligates the composition of the committee to be individuals who are part of the organization’s Directors’ Board and be autonomous from the organization which was a direct contradiction since the Go-Go’s committee consisted of people who are influential in the company and are dependent of it (“Summary of Sarbanes-Oxley Act of 2002,” n.d.). It was found that these influential employees within the company poses more threat. The imperative to solve this shortcoming would be to reconstitute the audit committee members to comprise of individuals from Directors’ Board and people who are independent of the Corporation.
The recognition of treasurer as an individual who was a close confidant of Ernie Eggers, an individual who was found guilty of fraud a while back opened a question on the corporation’s work culture. Prominence should be placed on committal to probity and moral values, and obviously, the treasurer could have been of questionable character, given his relationship with a fraudster. This means that the whole organization should be perspicaciously analyzed, with keen interest placed on employees’ principles and personnel guidelines and practices regarding the hiring process (Duska et al, 2011). Further, employee relationships must be guided, and proper workplace groupings and supervision should be done in order to ensure that the corporation’s employees do not negatively influence each other. Negative influence is disastrous and should be avoided at all costs and instead encourage good relationship between all ranks in the workplace.
The administration’s explanation on plans of the need to alter the accounting schemes for devaluation to straight line scheme and drop acceleration and further forewarning for non-concurrence means that Go-Go Corporation could be attempting to hide various plights it faces which could portend dire consequences on its net income since such a move from accelerated devaluation scheme to a scheme that has lesser devaluation generally does not add to a sensible venture in any business (Duska et al., 2011). Therefore, in reality this means that a meticulous evaluation of the administration’s committal to probity and moral values should be done since it is quite apparent that the administration’s reason for alteration is not plausible.
The realization that the vice-president for finance manages a group of 5 internal auditors presented a problem of non-autonomy from the corporation’s accounting and financial utilities by the internal audit taskforce. The structure of the corporation and Directors’ board necessities directs that organizational internal audit ought to account straight to the audit committee constituted by the directors’ board instead of Go-Go’s practice where the audit taskforce reported to the vice-president in charge of finance (Collins, 2011). Further on the organizational structure, the observation that there was a close relationship between the corporation’s topnotch power and leadership as the CEO, the president, and the vice-president were siblings meant that in as much as one cannot disregard a business or consider it as fraudulent based on familial relationship of the administrators, there is a bound to be involvement in fraud. Therefore, an astute evaluation of the organization’s situation needs to be done to conclude if this fact of relationship signifies a kind of organizational control debility.
The Go-Go Corporation’s belief that official performance analysis processes are counter-productive which warranted the subjective evaluation of the performance of administrators from division and departmental managers needs to be eliminated. The shortcoming here is that methods used in subjectively evaluating performance are frequently ineffective in identifying problems or detection of excellent performance in comparison to the effective objective methods, which include official performance analysis processes which the employees are aware of (Romney & Steinbart, 2006). Since this could mean that the progress of employees and their performance is impacted by these practices, it is prudent to do a careful evaluation to understand if it actually bogs the management.
Learning of Go-Go’s report of an appreciation of earnings per share consistently for every quarter in the last 25 of them, and the leveling off of the current quarter and the imminent reduction presents a problem of integrity of the Corporation. It could mean that Go-Go is attempting to avert a decline in earnings. If indeed the administration is using questionable or unorthodox schemes to shore up their earnings, then it will be a bigger problem. This could make it imperative to red-flag this practice and start a probe of the practice. Further, the review on Go-Go’s policy and procedure guide which limits itself to clients, suppliers, and employees is a shortcoming on the company policy (Duska et al., 2011). It is prudent to develop a guide that elucidates apt corporate practices, that gives a description of skills and experience requisite for main personnel, and details the resources allocated for undertaking particular tasks. The policy ought to elucidate administration policy regarding management of certain dealings, documents, structures and processes utilized to accomplish the dealings.
The initial assessment showed that accounting structures as well-designed thus proving a utilization of efficient inner control processes but then a fresh problem is presented when the realization is attained that no averments are available for the efficiency of the control nor an affirmation of utilization and adherence to the same by employees. This means that reliance on inner control processes is inept until such a time when these controls can be tested. The complaints raised by certain employees on the equivocality of directives given by the different managers on the apt information security processes shows that Go-Go has not enacted a clear line of power and duties for information policies and processes (Saloner et al, n.d.). Therefore, it is imperative that administration assigns power and duties for corporate goals like information security to particular sectors and persons and thus keep them accountable for attainment of these set goals.
The critical review on budget targeting improvement of the information security does not indicate any problem since a careful review has been done (Romney & Steinbart, 2006). The schedule of improved network firewall plan aggressiveness, the likelihood incompletion in a period and lack of support of it from the administration points that the schedule is infeasible. Thus, a careful analysis of administration and leadership policy and operative style should be done. The problem exhibited by new employees’ trouble in job completion and appearance of lack of know-how on where to solicit support points that the corporation lacks a determined and powerful support structure that is applied in training of new employees. The imperative here is to enact a worthy human resource principle which obligates the training procedures to accustom new workers with their duties, anticipated range of performances and mannerism, as well as include the corporation’s policies, processes, heroism, cultural norms, and operative styles.
Go-Go Corporation places prominence on a business strategy that seeks to attain constant progress for its stakeholders and investors. It’s decision-based on a policy that prohibits it from investing in projects with pay-back time exceeding forty-eight hours and produces an organizational percentage of return that is more than its expense by 3 percent is a laudable strategy (Romney & Steinbart, 2006). This is because it shows Go-Go’s passion to be the best for its investors, employees, and vendors, by enacting a watertight and solid capital financial arrangement tenets, which implies the projects they engage in are clearly going to be beneficial to everyone involved in it.
The observation made on the corporation’s purchasing agent’s dressing and exhibition of other products from key suppliers and the purchasing sector’s gratification of portrayal of the manager with a fish in a certain lavish boat with an emblem depicting one of the suppliers to the company is a mishap since this is an impending failure in the corporation. This is because presents that supplies give to purchasing agents may undeservedly sway these agents to irregularly source more products from the suppliers who give them presents (Nieuwenhuizen et al, 2008). Actually, decisions on purchasing ought to be free from any kind of partiality. The solution to this would be development of a clear and concise human resource principles and process guidelines which unequivocally explain franks and dishonest mannerisms, preferably which is in form official inscribed manual that gives directive on employee’s code of conduct such as schemes of according power and duties which every single employee should be aware of and strictly adhere to.
There are various aspects that determine a corporation’s internal environment that should be enacted by Go-Go Corporation. These are valuation structures, succinct missions and goals, a clear corporation hierarchy, business norms and culture and functioning style of key administration personnel, a value of the human resource, and non-human resources and technological abilities (Nieuwenhuizen et al., 2008). On consideration of Go-Go’s valuation system, there was questionability of probity of the administrators. The ethical beliefs that are aimed at guiding the corporation are not strictly adhered to, as evident in fraudulent practices of some employees who have since been convicted. The contribution of the value system to a corporation is success and prestige as a reputable organization within and without the business scope. Go-Go Corporation has a succinct and clear mission and goals, which prohibits management from engaging in activities which may not yield a profit for its vendors and shareholders. Therefore, most of the decisions and activities will be based on the mission and goals. Concise objectives have to be formulated and adhered to in order to make sound decisions.
A good internal environment should have a clear hierarchical organizational structure (Saloner et al., n.d.). Business norms, culture, and functioning style of key administration personnel in an organization are major determiners of an organizational environment. This is three-fold; intimidating, open, or participatory. Go-Go cannot be wholly disregarded in consideration of this aspect since in some ways it has upheld a certain culture whereas it has also failed in some fields. As in the case of schedule for development of improved network capacity, the top management failed to support the manager in charge of the project, pointing at an intimidating environment which deemed the project infeasible (Duska et al., 2011). New employees were also not well oriented into their jobs. However, there was employee participation in a number of areas, which meant open and participatory environment.
The quality and value of both human and non-human resources, and also their abilities are big determiners of the internal environment. Go-Go has not enacted policies that requisites proper skills and experiences of the employees, diminishing its efficiency (Romney & Steinbart, 2006). However, Go-Go Corporation’s fervency in technology as the information security usage aims of improving its network capability means that it is geared towards achieving an updated technological capability for the organization. The information security measures will also motivate employees keeping in mind the importance of intellectual and personal information. Therefore, a good business internal environment includes all the above.