Economic factorsin an organization's external context include macroeconomic conditions and indicators that affect operations, costs, and revenue generation.
* Examples of Economic Factors:
* Growth Rates: Impact market expansion and consumer spending.
* Exchange Rates: Influence international trade and cost structures.
* Inflation: Affects purchasing power and operational costs.
* Interest Rates: Determine borrowing costs and capital investment decisions.
* Relation to External Context:
* These factors exist in the macroeconomic environment and require organizational strategies to manage their impact.
* Why Other Options Are Incorrect:
* B: Profitability is an internal performance metric.
* C: Supply chain and inventory management are operational factors.
* D: Employee retention and career development are internal HR concerns.
References:
* PESTEL Analysis: Includes economic factors as part of the external environment.
* COSO ERM Framework: Discusses economic conditions in the context of external risks.