Question : Which of the following is a component of the external environment that can impact planning?
Option 1: Organizational structure
Option 2: Company policies
Option 3: Economic conditions
Option 4: Employee motivation
Correct Answer: Economic conditions
Solution : The correct answer is (c). Economic conditions
Economic conditions refer to the state of the economy, including factors such as GDP growth, inflation rates, unemployment rates, interest rates, and overall market conditions. These conditions can have a significant impact on an organization's planning process and outcomes.
Economic conditions influence various aspects of planning, such as market demand, consumer purchasing power, availability of resources, pricing strategies, and investment decisions. Organizations need to consider economic conditions when setting goals, formulating strategies, and making decisions to ensure that their plans align with the economic realities and maximize their chances of success.
