Minimum of 400 words in the body Minimum of 2 sources from the literature in addition to course texts

Gamble, J., Peteraf, M., & Thompson, A. (2019). Essentials of strategic management: The Quest

           for Competitive Advantage. (6th ed.), New York, NY: McGraw Hill Higher Education

Keller, T., & Alsdorf, K. L. (2012). Every good endeavor: Connecting your work to God’s work.

New York, N.Y: Dutton, Penguin Random House.

Krogerus, M., & Tschäppeler, R. (2018). The decision book: 50 models for strategic thinking.,

(Revised ed.), New York, NY: W. Norton & Company, Inc.

Rumelt, R. (2011)., Good strategy/bad strategy: The difference and why it matters., New York,

NY: Crown Busines

Content must include: 

Summary of the author’s Main Thread – no less than 125 words · What you agreed with, did not agree with and why – no less than 125 word


This week’s discussion focuses on the core theme of evaluating a company’s internal environment. For a company to have success, an understanding of its current internal threats as well as opportunities for external threats is important. By evaluating these threats, companies can better improve in areas of weakness, which is vital for a company to move forward.

Process: Evaluating the Internal Environment

Two factors need to be considered when looking into a company’s strategy. Gamble, Peteraf, and Thompson (2019)assessing if a company has gained financially and looking at their stance in the competitive market are two indicators that show if a company is progressing. Due to this, companies need to ensure that they have an accurate assessment of their internal assets and liabilities that may negatively impact the business’s success.  According to Gamble, Peteraf, and Thompson (2019), a VRIN test can be used to help sustain competitive success in their market. Businesses differ depending on what these resources are and how they are combined. Resources include but are not limited to processes, capabilities, assets, attributes, information, and knowledge. Together, they allow businesses to execute their relevant activities. Gamble, Peteraf, and Thompson (2019)describes that not all resources of a business are equally and strategically relevant. Only certain resources are capable of being input to a value-creating strategy, which puts the organization in a position of competitive advantage.

An organization’s resources should have four attributes to provide the potential for a competitive advantage. These attributes form the VRIN characteristics, which can be discovered by focusing on four essential qualities that make up the VRIN acronym: value, rareness, imitability, and non-substitutable. The value and rareness qualities help determine if resource availability help create a competitive edge, whereas the imitability and non-substitutable qualities determine how much attention needs to be placed on sustaining a competitive edge. Some companies internally may utilize an effective strategy, but other factors may require a slightly different approach. According to Gamble et al. (2019), “dynamic capability is the ability to modify, deepen, or reconfigure the company’s existing resources and capabilities in response to its changing environment or market opportunities” (p. 69).

Strategic thinking: Discussion of a key source of power and weaknesses

Various internal factors greatly influence the overall success of a company. While it is practically impossible to control forces outside the business like world economic conditions and capital availability, management must guide and inspire internal operations to ensure a competitive position in the marketplace. The steady stream of action going from within also includes adaptability and innovation, which are crucial to gaining market share and staying profitable in fluctuating economic climates. When utilizing strategic thinking in evaluating the internal environment of an organization, businesses must remember a few advantages and disadvantages. Some organizations utilize internal auditors to find areas where the company may have weaknesses to improve. These auditors can be both beneficial and harmful to an organization’s goals. According to Kim, Song, and Zhang (2011), “…firms with more severe, company-level internal control weaknesses pay significantly higher loan rates than those with less severe, account-level internal control weaknesses” (p. 1159).

The usual belief is that internal audit is only required in larger, more complex entities and that the cost/benefit of an internal audit function would is not for smaller firms (Rumelt, 2011). However, this can be a very short-sighted conclusion, especially when one considers the high volume of transactions and the regulatory compliance issues facing entities in the insurance industry. The management of these entities needs to take a closer look at three important factors concerning risk management and internal controls before dismissing the need for internal audit: management’s responsibility for internal control, the role of internal audit in fulfilling that responsibility and the benefits of internal audit.

An advantage of having an internal auditor us their exposure to all the major issues a company has due to their ability to see the company’s processes daily. Rumelt (2011) tells us that to create an advantage, one has to understand the advantage. A business has to place extra efforts into resources that are currently creating an advantage from them in the marketplace while putting those other advantages that are not currently beneficial aside temporarily. By doing so, a business can utilize and evolve its advantages to create business success.

Decision Model

A decision model that would benefit a business evaluating its internal environment would be the Swiss cheese model. According to Krogerus and Tschäppeler (2018), “everyone makes mistakes. Some people learn from them, while others repeat them” (p. 88). The Swiss cheese model hypothesizes that in any system there are many levels of defense, such as checking of drugs before administration, a preoperative checklist or marking a surgical site before an operation. Each of these levels of defense has little holes in it which are caused by poor design, senior management decision-making, procedures, lack of training, limited resources, and so forth. If latent conditions become aligned over successive levels of defense they create a window of opportunity for an incident to occur. They also increase the likelihood of making active errors. According to Ucbasaran, Shepherd, Lockett, and Lyon (2012), “…they review research that explains how entrepreneurs make sense of and learn from failure. Finally, the authors present research on the outcomes of business failure, including recovery as well as cognitive and behavioral outcomes” (p. 198). Using the lessons from a failed business strategy can help teach business managers valuable lessons. When leaders make these mistakes, they must change their way of thinking so the same mistakes don’t occur repeatedly.


In business, evaluating a company’s internal environment is crucial for developing a beneficial business strategy. Businesses who are aware of their weaknesses, as well as their strengths, are more likely to be successful in the long run. Business leaders who follow a Christian worldview must remember to incorporate the word of Lord in all their business decisions. Keller (2012) reminds us that as leaders we should remember to stay focus on our mission and to not be influenced by alternate worldviews full of idols. Leaders who continue to place their faith in the Lord will always continue to be showered with blessings both in business and in their personal lives.


Gamble, J., Peteraf, M., & Thompson, A. (2019), Essentials of strategic management, (6th ed.) New York, NY: McGraw – Hill Higher Education

Kim, J., Song, B. Y., & Zhang, L. (2011). Internal control weakness and bank loan contracting: Evidence from SOX section 404 disclosures. The Accounting Review,86(4), 1157-1188. doi:10.2308/accr-10036

Keller, T. (2012), Every good endeavor, New York, NY: Riverhead Books, Penguin Group.

Krogerus, M., & Tschäppeler, R. (2018), The decision book: 50 models for strategic thinking. (Revised ed.), New York, NY: W. Norton & Company, Inc.

Rumelt, R. (2011), Good strategy/bad strategy: The difference and why it matters., New York, NY: Crown Business

Ucbasaran, D., Shepherd, D. A., Lockett, A., & Lyon, S. J. (2012). Life after business failure. Journal of Management,39(1), 163-202. doi:10.1177/0149206312457823

Annotated Bibliography

Kim, J., Song, B. Y., & Zhang, L. (2011). Internal control weakness and bank loan contracting: Evidence from SOX section 404 disclosures. The Accounting Review,86(4), 1157-1188. doi:10.2308/accr-10036

This source gives insight into the internal control weaknesses of bank loan contracting. This internal environment evaluation of the banking industry showed how loan rates are manipulated. These loan contracts are sought out by businesses because businesses sometimes need quick capital to supplement their business endeavors. Company-level internal weaknesses have been proven to increase the loan rate amount for a business applying for the loan. At the accounting-level internal weaknesses have been found to lower the loan rate. From this, it shows that a companywide internal weakness will become detrimental to the loan rate.

This publication is a derivative of the Accounting Review. This publication comes backed by the American Accounting Association. The source publication is a journal for publishing articles related to accounting and explaining the research methods utilized. All submission to this journal has to be reviewed by independent reviewers before the submission is published. This helps ensure all research literature added to this journal are top-quality research methodologies and practice.

The authors are graduates of Concordia University and the City University of Hong Kong. These authors all have experience in financial reporting quality, corporate governance, auditing, and bank loan contracting. These authors have utilized their experience and sought out to study the internal control weaknesses of the banking industry. These authors have numerous publications dealing with their field which means they are experienced veterans of conducting quality research.

This publication will be tied to the discussion question by showing how the internal environment can have weaknesses and strengths. In this source when a bank has a company-level internal control weakness, it makes it more difficult to sell loan contracts because of the higher loan rate. However, when a bank has accounting-level internal control weaknesses, it can help the bank sell more loan contracts because of the lower loan rate. This will help a business become more competitive in their fields but understanding their weaknesses and making those weaknesses into strengths.

Ucbasaran, D., Shepherd, D. A., Lockett, A., & Lyon, S. J. (2012). Life after business failure. Journal of Management,39(1), 163-202. doi:10.1177/0149206312457823

This source evaluates the lessons that can be obtained from failures in business. In any business venture, sometimes managers and leaders will fail at some tasks. It is up to management to ensure that the business learns from the error and does not repeat the same mistake in the future. The literature also examines the financial, social, political, and other costs that correspond with the consequences of business failures. In business failures, recovering from those mistakes with the recovery of behavioral and cognitive outcomes is vital. Given the number of mistakes a business can make, a business needs to be able to capitalize on its mistake and make an organization stronger.

This publication comes from the Journal of Management. This journal aims to publish peer-reviewed scholarly articles that will have an impact on leadership. This journal touches on topics such as strategies, policies, human resource management, organizational strategies, and other business-related topics. This journal is also a member of the Committee on Publication Ethics, which promotes the quality and integrity of the research literature.

The authors of this source are from Indiana University and the University of Warwick. These professors had multiple leadership positions in business companies, which aided them in the research process. Most of the author’s main resource interests are business relationships, services, management services, and strategic leadership. This article falls well within the realm of expertise that the authors all possess.

Utilizing the Swiss cheese model, it tells businesses that everyone will make mistakes. An important aspect of the Swiss cheese model is that some professionals will learn from their mistakes while others do not. This source will help support the Swiss cheese model because professionals have to learn from their business failures to succeed in the future. Lastly, when a professional learns from their mistakes, it will show some areas of improvement that will help an organization prosper.