Nov 2017 Q1 b.
In an organization, every action of management body is influenced by the environment. In this context, “environment” means understanding the surroundings or conditions in which a particular activity is carried out.
Required:
Distinguish between internal and external environment of a business organisation. (5 marks)
View Solution
- The internal environment of a business refers to the forces which impact on the operations of the business and over which it has some element of control. Such factors include the level and quality of equipment, the quantity and quality of its
Human resources, marketing capabilities and strategies. - The external environment of a firm consists of the sum total of all conditions and forces which affect the strategic options of a business but which are typically outside its control. Common external factors fall into several categories, including socio-economic, legal or ethical, political and technological. Socio-economic factors relate to the values, attitudes and concerns of the firm’s target customers and their economic abilities to afford its products.