BMIS – Nov 2016 – L1 – Q5a – The external environment

Outline factors in an organization's external environment that are beyond its control.

Question

An organization’s external environment is made up of those factors over which the organization has no degree of control.

Outline SIX of these factors. (6 marks)

Answer

Political environment: Refers to the policies, procedures, and practices of both national and international political institutions.
Economic environment: Involves changes in the country’s inflation levels, interest rates, buying patterns, and income levels of the population.
Socio-cultural environment: Refers to the lifestyle and the way things are done by a particular group of people.
Technological environment: Involves changes and improvements in the processes and technologies used by the company.
Ecological environment: Refers to weather conditions, pollution, noise, natural disasters, and their impact on living conditions.
Legal environment: Involves the rules and regulations established by national and international political institutions.

(6 x 1 mark = 6 marks)