There is a boundary around every organization which separates the entity from the external environment. The environment within this boundary is known as internal environment of the organization. Basically the resources of the organization, its capabilities and competencies together form the internal environment of the organization. The internal environment of an organization plays a vital role in the strategic management. Internal environment shows how well the organization is able to perform in the event of a business-related exigency. The internal environment of the organization can bring a sustainable advantage to the company.
Simply put, it's the environment on the inside of your body. Many books are available at your local library on this popular subject!
Meaning of internal environment is business?