Final answer:
Managers must focus on the economic and legal aspects externally, involving market conditions and regulatory compliance, which are vital for directing the company towards profitability while meeting all legal obligations.
Step-by-step explanation:
The two key external areas that managers must focus on are the economic aspects and the legal aspects. When it comes to economic considerations, managers need to be aware of market conditions, competition, customer demands, and other factors that can influence a company’s profitability and financial stability. This could include understanding the nuances of supply and demand, pricing strategies, and economic trends. Regarding legal concerns, managers must ensure that the company adheres to all applicable laws and regulations, which can include labor laws, environmental regulations, and corporate governance standards. These areas are crucial as a firm becomes established and information about its products, revenues, costs, and profits becomes readily available to outside investors such as bondholders and shareholders. Adopting a holistic view of the business environment, managers can provide effective leadership and make informed decisions that align with the firm's strategy and objectives.
Supports for free markets, such as governmental policy changes, play a significant role in the economic aspect of management by establishing a conducive environment for business operations.