In the context of the external environments that influence organizations, what is a difference between the general environment and the specific environment?

External environment refers the factors that play outside the company that management of an organisation has no power over. These factors influence the strategic and operational decision of the business even though they are outside the control of management. External environment is subdivided into two: the general environment and the specific environment.

The general environment refers to the factors that affects all businesses in general in respective of their niche or domain of operation. These factors include political, legal, economic and social. Example of issues that can arise in general environment include war, inflation, economic recession and religion.

In contrast, specific environment contains factors peculiar to an industry, firm and domain of operation. These are different across the industries in which organisations operate. Paying close to what happen in the specific environment is very important for business to survive because they directly influence the success or otherwise of a business operation. The agents that play in the specific environment are competitors, customers, investors and other stakeholders group.