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By studying the internal environment, firms determine what they can do, like examine unique resources, capabilities, and competencies. This ultimately helps firms achieve competitive advantage and superior economic performance.

It's important for a firm to study and understand its internal organization because it helps in accountability for areas of work undertaken by groups and individual members of the organization through allocation of individual tasks and responsibilities as well as job specialization. It also helps the coordination of different parts of the organization and different areas of work such as formal reporting relationships, levels of authority and spans of control. The effectiveness and efficient monitoring of organizational performance by grouping together sections, departments, divisions, and larger units. Also, it helps in monitoring the activities of the organization and creates flexibility in order to respond to changing environmental factors.

It is important for a firm to study and understand its internal organization for many reasons. One of the reasons is flexibility. It helps a company to create flexibility to respond to changing environmental factors, also it helps with the coordination. The coordination of different areas of work in a company. Another important reason is that it helps in accountability of areas of works in the company. There are more reasons of why it is important, I believe the most important reason is that this helps with the effective monitoring of its organization performance, and this is important because a company cant reach its goals without order, without an effective internal organization.