Answer to Question #165239 in Management for Jane

Question

Business is built on relationship.

What do you think about this statement? what are the implications of managing the external environment?

Answer 1

In a global world that is more connected than ever before, businesses are ever-increasingly built on relationships. Having good relationships with employees, service providers, suppliers, and stakeholders can make the difference between the success and failure of a business.

To get the definition clear, "external environment" refers to all outside influences and factors that affect a business's operation. Examples of factors in the external environment would be the price of raw materials, any ongoing global crisis (think Covid-19!), and the actions of competitors.

In a nutshell, the stronger the relationships that a business has with its suppliers and customers, the better equipped it is to handle the challenges that the external environment throw at it. Let's take a look at the examples listed above: