Explain in detail the different external environments influence the

international businesses (e.g. social Technological, cultural, political,

economic environments)
Social Environment
The social environment consists of the sum total of a society's beliefs, customs,
practices and behaviours.
Demographic Factors Size of Population Age structure GenderOccupation
EducationMigration Family System

Technical Environment
The technological environment contains the innovations, from robotics to cellular
phones, that are rapidly occurring in all types of technology.
When a company expects to sell its product in another country, the technology of the
two countries must be compatible.

Cultural Environment
Culture is the aggregate of customs, beliefs, values,
habits and attitudes that bind people together as a social
entity.
Culture is both materials and non-material.
Material culture consists of man-made things such as telephone, television etc.,
Non-material culture consists of intangible factors such as values, beliefs, ideals,
language, knowledge etc.,

Political Environment
An international business firm must be aware of the
political environment of the home country as well as
that of the host country.
Some political considerations are as follows:
❖ tariffs (import taxes) ❖ quotas (annual limits) ❖ embargoes (blockages) ❖
restriction in response to political events

Economical environment
The international economic environment can be described as the
global factors that are outside of the control of individual
organisations but that can affect the way that businesses operate.
These factors includes:
Labor costs Interest rates Taxes Inflation Currency exchange rates Consumer flexible
income Savings rates Consumer confidence levels Unemployment rate Recession