Internal constraints

KEY WORD

Constraint - a constraint is something that STOPS a business achieving its aims and objectives. Constraints may be internal or external.

An internal constraint is usually within the control of the business.

An external constraint is outside the business and is difficult to control, if at all.

Often internal and external constraints go hand in hand and there is a fine dividing line between them. For example interest rates are an external constraint and this causes an internal constraint in that it makes the borrowing money more expensive for the business.

 

Internal constraints - these are factors within the control of the business that are restricting it achieving its objectives.

The main internal constraints are:-

Finance - has the business enough money to be able to finance growth? If there was not enough cash within the business itself then is the business strong enough financially to be able to borrow money? Is the business profitable?

Marketing - has the business got a strong marketing position? Does it have a brand name and a suitable image? Can it supply an increasing market should it grow?

People - have the staff the skills to do the jobs that they are expected to perform? Does the business support training to make sure staff can do the job?

Production - has the business extra capacity to increase production if and when necessary?