environment

Definition:
Forces external to the firm which influence the courses of action available to it. Usually seen as comprising the Macro-environment and the Micro-environment. The Macro-environment is concerned with the major forces which are beyond the control of the individual firm which act as the ultimate determinant of its freedom of action. These forces, which are common to all organizations, are often summarized by the acronym PEST standing for Political, Economic, Socio-Cultural and Technological. The Micro-environment defines the industry/market within which firms compete with one another and is usually seen to embrace competitors, customers and suppliers. See ENVIRONMENTAL ANALYSIS.

Cross-References:
[environmental analysis]

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