1. General Environment
General environment or mega environment is an important
segment of external environment. The reason it is called mega
environment is that it only refers to the broad trends and conditions
in the societies within which an organization operates. The major
elements of general environment are: legal-political, economic,
technological, international and socio cultural. Since such elements
are beyond the ability of a single organization to affect or alter
them therefore they cannot be influenced in the short run. The
elements of general environment are explained below.
• Technological Element
It refers to the current state of knowledge about the production of
goods and services. Technological environment can positively or
negatively impact the overall success of an organization. Different
industries such as automobile, telecommunication, computer etc.
are greatly affected by frequent changes in technology. Therefore
in order to remain competitive, organizations must stay abreast of
current technological developments.
• Economic Element

2. Prevailing economic conditions have great impact on the
management practices in an organization. Different economic
factors such as inflation, interest rates, changes in per capita
income, stock market fluctuations etc affect the profitability and
success of an organization. For example if the per capita income of
people decreases, it will decrease their purchasing power which
will ultimately lower the demand for goods and services. Due to
lower demand, prices fall and the profit of an organization shrink.
• Legal-Political Element
Legal-political element refers to the legal and governmental
systems within which an organization must function. There are
various federal, state, and local government regulations which can
significantly influence the overall performance of an organization.
For example civil Rights Act of 1991, Americans with Disabilities
Act of 1990 etc are some of the US legislations affecting the
businesses of different organizations. Similarly political stability
and positive attitude of elected government official towards the
business of an organization is very important for the organization’s
progress and prosperity.
• Socio-Cultural Element

3. Socio-cultural element includes customs, norms, behaviors,
societal values, beliefs etc. Socio-cultural aspects are subject to
change therefore managers must adapt their practices to the
changing expectations of the society. It is necessary to monitor the
prevailing trend from time to time because such changes might
offer new opportunities or pose significant threats. For example if
there is shift in behavior of people for certain product, the demand
of the product will increase along with increase in price.
• International Element
The political, social, cultural, and economic situations of one
country are significantly different from other country. Therefore
development in a country outside an organization’s home country
has great influence on the success of organization. For example a
slight increase in the value of dollar has great influence on the
ability of an organization to conduct business abroad. Therefore
those organizations which are purchasing raw materials from USA
will find it difficult to purchase from them because of increase in
the cost of production due to higher prices. Conversely, if the
dollar falls against foreign currencies, demand for the raw
materials will increase.