Acct 309

These factors create certain expectations and requirements for organizations, which in turns determine the organization's direction and strategy. Whereas internal environment is made-up of several internal subsystems. Internal subsystems work together systematically and drive the organization in the direction which is in conformity to external environment demands; thereby making the organization effective and a good fit with external environment. (McShane & Steen, 2012, p.6)

Gross profit ratio had been declining through the period of 2008-2010, which indicates decrease of markup that the company achieved on its inventory, which also means that it lowered sales prices compared to costs.

SFAS No. 87 “Employers’ Accounting for Pensions” maintains that pension information should be prepared on the accrual basis and retained three fundamental aspects of past pension accounting: 1. delaying recognition of certain events, 2. Reporting net cost, and 3. offsetting assets and liabilities” (Schroeder, Clark, & Cathey, "Pensions and Other Postretirement Benefits," 2011). “The components of pension costs reflect different aspects of the benefits earned by employees and the method of financing those benefits by the employer. The following are required to be included in the net pension cost recognized by the employer sponsoring a defined benefits pension plan: 1. Service cost, 2. Interest cost, 3. Return on plan assets, 4. Amortization of unrecognized prior service cost, 5. Amortization of gains and losses, 6. Amortization of the unrecognized net obligation or unrecognized net asset at the date of the initial application of SFAS No. 87” (Schroeder, Clark, & Cathey, "Pensions and Other Postretirement Benefits," 2011).

Guillermo Furniture, a company that manufactures midgrade and high-end sofas, has just hired you as an accountant. The owner, Guillermo Navallez, has assigned you the tasks of determining which decisions provide the greatest returns.

There are 3 major types of external environments that a firm must focus on: business, remote and competitive. Failure to recognize and evaluate these forces will affect a firm 's success.

The external environment is made up of forces and factors that affect the organization performance, be it positively or negatively. To explain in greater detail, the external

The internal environment of the company can be divided into two types they are Tangible and Intangible resources.

An organisation`s major internal environmental factor is the organisation`s culture (Davey 2010, p. 34). An organisation`s culture is made up of the shared values, principles, traditions and ways of doing things that influence the way the members in an organisation act (Robbins et al. 2008, p. 94). Researchers found seven dimensions (Innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness and stability) that together constitute the organisations culture and in many companies one of those dimensions are more prevalent than others and shape the organisations culture (Robbins et al. 2008, p. 94).The original source of an organisation´s culture usually reflects the vision of its founders and shows their focus (Robbins et al. 2008, p. 97).

Q3) In terms of the external environment analysis, we will focus on three areas, namely, general environment, industry environment and competitor’s environment.

An organization 's external environment has three components: the remote environment, the industry environment, and the operating environment. The Remote environment is made up of economic, political, social, technological, and ecological factors. The industry environment is made up of entry barriers, supplier power, buyer power, substitute availability, and competitive rivalry. The operating environment is made up of competitors, customers, labor, and suppliers.

The internal environment consists of the inherent competencies of the firm and the structure of its internal systems and processes. It is imperative for the organization to conduct an internal analysis

The internal environment are the conditions, entities, events, art factors within an organization that influence its activities and choices, particularly the behavior of the employers. Conditions are set as the place where the workers are set to do their job, where the customers are able to order and to receive what they ordered, and the basic necessities in their workplace. Entities and Events are the situations and days where something may be changed due to someone 's preference or due to a large gathering within the company. The art factors are the general aesthetic that the company upholds, and the behavior of the employers is truly something that does not only boost morale, but the value of the goods that are produced.

The internal business environment includes factors within the organisation that impact the approach and success of the business operations. Formerly presented as core competencies, capabilities, leadership style and culture of an organisation. To understand its sources of competitive advantage from within a firm or an organisation will implement specific tools such as SWOT analysis (Strength, Weaknesses Opportunities and Threats), Value chain analysis, Resource based view, VRIO framework and BCG Matrix for instance.

The internal factor of the organisation that laid impact on the success rate of the organisation and the external factors of the organisation consists of various factors from outside of the company doors and you do not have much control on that factor.

Internal environment includes factors that can be controlled by the company such as management, production, finance, accounting, supply of materials, marketing, public relations (PR), human resources, information systems, etc. Analyzing these factors helps businesses identify strengths, weaknesses, then finding out the appropriate strategy. Marketing strategies, marketing systems, marketing organization, marketing function and marketing productivity are included in the internal audit.