Explanation about the external environment which affect the business environment
Answers
External environment of a business consists of all those external factors that are operating outside the premises of the organization. However, they impose a significant influence over the operations, survival and growth of the company. Businesses have very little or most often no control over the environment in which it is operating which arises the need to continuously conduct environmental analysis as well as adapt to external changes which serve to be a reactive or proactive response and leads towards a significantly different outcome. External environment factors can significantly affect business operations and effectiveness to a great extent.
Types of External Environment of a business
Micro environment – Environmental factors that can either be controlled or influenced by the organization are termed as micro environmental factors which include employees, customers, competitors and media.
Macro environment – There are several macro economic factors are also present that can influence businesses and their operations. These factors allow assessing the external environment along with evaluating any potential changes. These factors are usually non-controllable factors. However, they have a huge impact over organizations if not considered closely.