Strategic Management Exam Name Course Institution Instructor Date Question 1 Business leaders should study the external environment since the external environment influences the operations of the organizations. External environment refers to inclusive concepts and factors outside the business environment, which the organization must respond to for a smooth flow of operations. (Khandwalla, 2012). In a sense, these are elements of the business environment outside the scope of the organizations’ control, yet they cannot be ignored. The external environment of organizations involves globalization, economic forces such as technology, political stability, sociocultural forces and natural disasters. Organizations need to adapt, thrive, exploit and strive to fit within the impacts of these factors.