Final answer:
A firm should examine its internal organization to understand its operational efficiency, attract outside investors, and align strategies to market demands while fostering a productive organizational culture.
Step-by-step explanation:
A firm should study its internal organization as part of the strategic management process because it provides essential insights into its resources, capabilities, and overall operational efficiency. As a firm grows, the need to understand its internal dynamics intensifies. Extensive information regarding its products, revenues, costs, and profits becomes critical for attracting outside investors like bondholders and shareholders, who may not be familiar with the firm's managers on a personal level.
By analyzing the internal organization, firms can better align their strategies to market demands while ensuring that they operate proficiently, thus becoming more attractive to potential investors. This assessment aids in delineating the roles within the organization, assessing the organizational culture, and comprehending how it impacts employees' behavior and the company's overall performance. In turn, this can lead to increased productivity, competitive advantage, and more informed business decisions that are in line with the firm's mission and strategic objectives.