"Businesses are built on relationships."  What are the implications of this idea for managing the external environment?

The relationships that businesses build with their employees, suppliers, service providers, and stakeholders are vital to a business's success when external catastrophes arise. If a business finds itself in trouble due to the external environment, it can fall back on these positive relationships to ensure the business stays afloat.

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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:

Price of raw materials: If a business has a good relationship with its suppliers, and both parties have shown their loyalty to one another, the business will get the best possible price on...

(The entire section contains 5 answers and 978 words.)

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