Every organization has an environment with which it constantly interacts.

Definition of environment is:
The environment consists of factors that are external to the organization but affect its performance.

1. Effect on performance: things which do not directly affect the organization’s performance are not considered part of its environment.

2. Organizational control: things which the organization has control over are not part of the environment, but are organizational resources.

Exceptions: some factors are neither fully controllable nor completely uncontrollable
1. Customers: some control through marketing, but competition ensures only partial control

2. : strong impact on the organization, but control is possible through development of the modern technology.

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