Final answer:
External environment refers to the factors or influences that impact the operation of a business and are outside the control of the organization.
Step-by-step explanation:
External environment refers to the factors or influences that impact the operation of a business and are outside the control of the organization. These factors can include economic conditions, political and legal regulations, technological advancements, social trends, and competitive forces.
For example, an economic recession can affect consumer spending behavior, which in turn can impact a business's sales and profits. Similarly, changes in government policies can introduce new regulations that businesses need to comply with.
Understanding the external environment is essential for businesses to adapt and remain competitive in their industry. By analyzing and monitoring these external factors, businesses can identify opportunities and threats and make informed decisions to achieve their goals.