Management

The external environment of management

The external environment of an organisation can be categorised as comprising its specific (or task) environment and its general environment.

The specific (or task) environment consists of the actual organisations, groups and people with whom an organisation interacts and conducts business. These parties directly influence how an organisation operates on a day-to-day basis, and are often referred to as stakeholders. They are affected in one way or another by the organisation’s performance.

The general environment consists of all the background conditions in the external environment of an organisation. This part of the environment forms a general context for managerial decision making.