- 5 Marks
Question
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 organization.
(5 marks)
Answer
- Internal Environment: The internal environment of a business refers to the forces which impact the operations of the business and over which it has some element of control. These factors include the level and quality of equipment, the quantity and quality of human resources, marketing capabilities, and strategies.
(2.5 marks) - External Environment: 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 are typically outside its control. Common external factors include socio-economic, legal, ethical, political, and technological conditions. Socio-economic factors relate to the values, attitudes, and concerns of the firm’s target customers and their economic abilities to afford its products.
(2.5 marks)
- Topic: The external environment
- Series: NOV 2017
- Uploader: Dotse