KK1 Relationship Between the external and internal environments of a business

Question 1

Distinguish between internal and external environment of a business? ( 2 marks)

Answer 1

The internal environment consists of the factors that the business has some control over; that is the employee base, the managers and management style, the business location and structure. On the other hand, an external environment includes those factors over which the business has little to no control. This includes government policy, economic conditions, competitors and advancing technology.

Question 2

Define Operating Environment (2 marks)

Answer 2

The specific outside stakeholders with whom the business interacts in conducting its business; it is sometimes called the task environment.

Question 3

Define Internal Environment ( 2 marks)

Answer 3

Factors over which the business has some degree of control; it is sometimes called the microenvironment.

Question 4

Identify two factors from the internal environment of a business? (2 marks)

Answer 4

Internal environment Factors include but are not limited to employees, managers, business location, legal business structure.

Question 5

Explain how a factor from the external environment of a business can affect the internal environment of a business.? ( 2 marks)

Answer 5

There are many external influences on the internal environment of a business. For example, laws or regulations made by parliaments and courts may affect how businesses operate and behave.