External environment plays a key role in the manager's roles. Different factors in the external environment create opportunity and present threats to which the organization needs to respond. It is important for managers to conduct an environmental scan in order to better understand the environment in which they operate. Juervicius (2013) explains one system, the PESTLE system, which forces managers to think about the different external factors that affect their business.

The PESTEL model features an analysis of the political, economic, social, technological, environmental and legal environments. For the manager, each of these provides the framework for analyzing the operating environment. These factors are all significant, and unrelated to other external factors like competition and demand drivers. For example, where there is political risk (like a government shutdown), the manager can better understand this risk by working through the PESTEL framework. The economy is a critical input, and technological changes...
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