Basically the internal environment of an organization includes the resources, capabilities and the competencies of the organization. This internal environment plays an important role in making important strategic decisions for the company. In this way the decisions which are made by the managers are affected by the components of internal environment.
Just take the example of human resource, an important component of internal environment. When the managers have capable human resources, then he will be more able to complete the tasks which he will assign to them. He can ask the major authorities to train his staff and the response and interaction of the staff with manager can directly affects his way of thinking and actions.
Moreover, if the internal environment of the company has decentralized decision making system, then managers will be more proactive. They will show more interest and obligation towards the organization. The better will be the flexibility in his authority, the better he will be able to contribute in organization.
Just take the example of human resource, an important component of internal environment. When the managers have capable human resources, then he will be more able to complete the tasks which he will assign to them. He can ask the major authorities to train his staff and the response and interaction of the staff with manager can directly affects his way of thinking and actions.
Moreover, if the internal environment of the company has decentralized decision making system, then managers will be more proactive. They will show more interest and obligation towards the organization. The better will be the flexibility in his authority, the better he will be able to contribute in organization.