External Environments

Changes in external organizational environments affect the decisions and performance of a company. There are two types of external organizational environment: the general environment that affects all organizations and the specific environment unique to each company.

External environments are the forces and events outside a company that have the potential to influence or affect it. Environmental change is the rate at which a company’s general and specific environments change.

Environmental change, environmental complexity, and resource scarcity affect environmental uncertainty, which is how well managers can under-stand or predict the external changes and trends affecting their businesses.