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The environment being considered is both the internal and external. Internally this may include products and services offered, financial resources, facilities, labor resources, and management depth. Externally this may include the ecological environment, technologies, laws, the economy in general, and those aspects that impact the organization¡¯s market such as political and social forces. At first, a manager should identify what is the external environment. This refers to institutions or major forces that are outside the organization and have potential to influence the organization¡¯s performance. It is composed of economic environment, political environment, social environment, physical environment, technological environment and so forth. 1) Economic environment A national financial changes, such as inflation rates, interest rates, stock indexes are done main factors in the external environment that can affect management practices. For example, up and down of stock indexes depends on many factors, especially the current market prospect and integrated stocks trend. We are not sure that a stock-control company only has an eye on itself. What is more, it may be limited by external affects. In 1997, an economic crisis happened in almost every Asian country, the stock indexes fell down sharply, which led to failures of many companies. For another example, changes in disposable income, when the customers¡¯ incomes fall or when their confidence about job security decline, they will postpone buying anything that is not a necessity. So this will have a certain impact on the operation of a company in marketing. So being aware of the level of consumer disposable income on the purchases is essential for a manager in management practice, or ignoring its impact will lose customers, even the total market. As for a manager, economic condition must be taken into account as one of the external environments. 2) Social environment The social aspects of a country make an effect on a business firm. Both the products and service offerings that a company provides depends on the changing expectations of the society in which the management operates, such as the population of a country, the values, the culture of the society, the taste changes and so on.

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