3. Discuss and describe the six elements of the external environment.
The six elements of the external environment are demographic, sociocultural,
political/legal, technological. economic, and global.
-Demographics: Demographics are the most measurable element of the external
environment and includes information concerning the aging population, rising affluence,
changes in ethnic composition, the geographic distribution of the population, and
disparities in income levels.
-Sociocultural: These influence the values, beliefs and lifestyles of a society.
These persuasive forces include more women in the workforce, an increase in
temporary workers, a greater concern for fitness, a greater concern for th environment,
and postponement of family formation.
-Political/Legal: Industries must comply with local and federal laws and
regulations which can affect how an organization operates. These include tort reform,
ADA of 1990, the deregulation of different industries, the fed increase of minimum
wages, taxation an different government levels, legislation on corporate governance
reforms, and the affordable care act.
-Technological: Technological elements of the external environment is comprised
of advances or changes in genetic engineering, 3D printing, CAD/CAM, research in new
materials, pollution/global warming, the miniaturization of computing technologies,
wireless communications, nanotechnology, and big data/data analysis.
-Economic: Economics affects all industries and includes interest rates,
unemployment rates, consumer price index, trends in GDP, and changes in the stock
market.
-Global: The global environment can grant organizations access to the global
market as well as manufacturers. Access to the global market means organizations
must be attentive to increasing global trade, currency exchange rates, the emergence of
the Indian and Chinese economies, trade agreements, creation of WTO, and increased
risks associated with terrorism.