RSM100Y1 Chapter 2: Chapter 2 Summary
3 Apr 2011
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External environment consists of everything outside an organization"s boundaries that might affect it. plays a major role in determining the success of any organization. managers must have an accurate understanding of the environment that they are facing. Organizational boundary separates the organization from its environment. when you go in a grocery store, your crossing the boundary into a business. during the time that distributors of various products enter the store, they are essentially part of the business. mcdonalds has a contract with coke to distribute only coke products. Our neighborhood grocery will be influenced not only by an increase in unemployment in the area but also by the pricing and other marketing policies of its nearest competitor. Economic environment refers to the conditions of the economic system in which an organization operates. e. g. mcdonald"s canadian operations are functioning in an economic environment characterized by negative growth, rising unemployment, and low inflation.
