RUNNING HEAD: EXTERNAL ENVIRONMENTS 1
Discussion Board 2: External Environments
David S. Saunders
School of Business, Liberty University
Busi 604 International Business
Dr. Angela Peterson
August 27, 2025
Key Term and Why you are interested in it
I have chosen the term external environments that can affect a business. As a long-time
business owner, as well as one who has worked for companies overseas, I have a great interest
in external as well as internal issues that can be issues for a business. Companies that are mainly
concerned with the domestic market face certain external issues, while a company that
operates globally can face different external issues. For example, an international company can
be affected by geo-political issues, fluctuation in currencies, different types of taxes, as well as
cultural issues. A domestic company may only be dealing with one market in one country, and it
could only be dealing with economic factors that pertain to that market and country.
Explanation of external environment
An external environment refers to the part of a business environment that makes up all
the outside elements or forces that can affect a business operation (BUSINESS JARGONS, 2025).
Additionally, an external environment can affect a business internally as well as externally. The
external environment also includes factors that are uncontrollable. Examples of these factors
can be political, economic, social, technological, legal, and environmental issues that affect
businesses (TheMBAins.com, 2023). These factors are then divided into micro issues such as
customers, suppliers, and competitors (TheMBAins.com, 2023). There are also macro
environments known as PESTLE and it is important that business understand these factors.
PESTLE Analysis is a framework or tool that marketers and companies use to look at the
external factors that can affect their operations (Periera, 2024). The six areas that are looked at
are: political, social, technological, legal, and environmental (Periera, 2024). Some examples of
these six areas are as follows:
•Political: An example would be political issues that affect taxes (Daddey & Newton,
2024).
•Economic: An example would be how the local economy affects the spending patterns of
its customers that directly impacts most of its sales (Daddey & Newton, 2024).
•Social and Cultural: An example would be how customer preferences impact what items
they will buy or not buy (Daddey & Newton, 2024).
•Legal: An example would be the local laws that govern zoning, policies, and other issues
that can affect a business (Daddey & Newton, 2024).
•Technological: An example would be how a customer uses technology to pay for
products they purchase (Daddey & Newton, 2024).
•Environmental/Natural: An example would be how weather can impact sales for a
business (Daddey & Newton, 2024).
Article Summary
The article that I read was written by Mr. Ronald Buye in 2021, and it dealt with an
examination of the PESTEL analysis model. The article dealt with the following environments
within the PESTEL model:
•Organizational environment: This environment is made up of all factors and forces
outside of an organization that can affect and can be affected by the organization (Buye,
2021). Some of these factors can include organizational members, physical
infrastructure, organizational leadership, culture, systems and structure (Buye, 2021).
•External environment: This environment is made up of forces and factors outside of the
boundaries of an organization that influence how the organization operates (Buye,
2021).
•Direct environment: This environment can affect operations, as it is made up of clients,
suppliers, competitors, or entities that do similar work (Buye, 2021). The most important
part of this environment is the clientele of the company. Additionally, competitors are
also import, and analysis of this item enables a company to stay competitive. Another
aspect is an analysis of strengths and weaknesses that focus on all aspects of
international operations such as people, finance, and services (Buye, 2021).
•Macro Environment: This environment includes all the factors and forces that are a part
of society that affect the immediate environment (Buye, 2021). These factors are not
directly under the control of an organization, but they can pose serious issues on an
organization’s performance (Buye, 2021). These factors make up PESTEL.
Discussion A
The article that was written by Mr. Buye provided a detailed insight into the PESTEL
model and how it is a part of the external environment of a business. It is important to
understand how specific aspects of the PESTEL model affect a business. One of the specific
aspects of the PESTEL model is political factors. Political factors would include government
policies, trade policies, tax policies, general political issues, changes in leadership, regulation,
and political trends (Makis, 2024). These issues can have major impacts on business operations.
Additionally, they can also influence the rest of the factors that make up the PESTEL model.
Governments and international bodies set laws and regulations (Makis, 2024). These
decisions can have an impact on the global economy, society, technological advancements,
environmental regulations, as well as legal systems. For example, when the UK voted on leaving
the European Union (Brexit), this decision effected trading within the EU, travel within the EU,
and other governmental policies as well. Additionally, when an international organization such
as OPEC decides to increase the price of oil, this can have impact on the global economy
especially on countries that import all their energy needs from OPEC. Political factors can also
be found in PEST, STEEP, STEEPLE, and STEEPLED analysis.
Discussion B
I researched two articles on how PESTLE affected Brexit in the United Kingdom. The first
article was written in 2017 by the PESTLEanalysis Team, and it dealt with the potential impacts
of Brexit. The political aspect of Brexit was analyzed at this time, and the analysis concluded
that the political effects of Brexit would take several years as well as workers who had EU
permits to work in the UK would have to leave (PESTLEanalysis Team, 2017). Additionally, there
will be impacts in trading, exporting, and these impacts could have a profound effect on the
British consumer (PESTLEanalysis Team, 2017).
The economic impact on leaving the EU was also bound to have an impact on the British
economy. During this period, there was concern about how investments by EU companies in the
UK would be impacted. Additionally, there was concern about rising interest rates as well as the
value of the British currency on the global markets. While certain aspects of the British economy
were sound, others were not.
The social ramifications of Brexit saw fake news postings on social media about attacks
on foreigners in the UK. Social media websites such as Facebook and Twitter did not fact check
these postings, and eventually they were debunked. This issue of Brexit left the country divided.
The referendum was approved by 51.9% of the British population, while 48.1% voted against it
(PESTLEanalysis Team, 2017).
The article also looked at the technological ramifications of Brexit. Labor restrictions
might impact the IT sector, but companies were looking into solutions via telecommunication
methods such as remote work (PESTLEanalysis Team, 2017). The impact on technology itself was
determined to be negligible. The issue potentially could be how businesses in the UK optimizes
technology.
The second article I looked at dealt with the impact Brexit would have on supply chain
operations in the UK. This article was written in 2020. There was great uncertainty for
businesses that operate cross-border in the UK. The article looked at how PESTLE would affect
supply chain operations in the UK. The following topics were addressed in this article:
•Political: The passing of Brexit forced the Prime Minister of the UK David Cameron to
step down (Hallam, 2020). The most contentious topic was Article 50 that dealt with the
free movement of products within the EU and a single market (UK) (Hallam, 2020). The
issue dealt with those in favor of sovereignty vs. globalists (Hallam, 2020). At this time,
the UK was in a two-year transition period, and the UK was in negotiations with the EU
to have a free trade agreement once the UK exited the EU (Hallam, 2020). Both major
political parties in the UK were divided (The Tories were for Brexit and Labor was against
it). Additionally, both parties were divided on restricting immigration.
•Economic: The UK had a trade deficit with the EU, and 62% of its exports went to the 27
EU Member States during the first quarter of 2017 (Hallam, 2020). Additionally, at this
time the UK’s top import partner was Germany (Hallam, 2020). The rest of its products
went to France, Ireland, and the Netherlands as they are geographically close to the UK.
Ireland has historical trade links and both countries speak English, the Netherlands has
the largest port in the EU in Rotterdam, and the Netherlands is also an important
financial
and business service trading center (Hallam, 2020). There was also the uncertainty of
the value of the British Pound vs. the Euro.
•Technological: The most pending issue to the supply chains in the UK was VAT MOSS,
which made changes to the place of supply and collection of VAT for suppliers of B2C
telecoms, as well as broadcasting and electronic services (Hallam, 2020). These types of
businesses were not required to have multiple VAT registrations, and after Brexit they
will need to have multiple registrations in each country they conduct business within the
EU. The current system of collecting VAT was headquartered in the UK, and that would
have to change. The other important issue was Blockchain Technology. An example of
this would be Bitcoin. There needed to be a solution to what types of transactions within
this technology would be liable for VAT. The EU decided for Bitcoin that it was a currency
and thus exempt from VAT (Hallam, 2020).
•Legal: Brexit would now create issues with customs compliance, and supply chain
companies would have to make important decisions. For example, at the time of Brexit
the UK has the lowest examination rate at its ports within the EU (Hallam, 2020).
However, after Brexit businesses will have to start proving everything and the regulatory
burden on British companies would rise (Hallam, 2020). Issues like rules of origin, and
licenses to import and export would increase. Additionally, the issue of how duties
would be paid would have to be addressed as well.
•Environmental: After the passage of Brexit, there was a report published that projected
a significant rise in customs checks at UK ports, and that the infrastructure to ports such
as the one in Dover would need to increase as customs declarations were projected to
increase from 60m a year to 300m a year (Hallam, 2020). The Port of Dover did not have
room to expand as it is located between land that is protected by environmental
regulations, and a motorway (Hallam, 2020). The Road Haulage Association reported
that approximately 30% of all food consumed in the UK comes from the EU, and it is
transported by trucks (Hallam, 2020). The extra time for these items to clear through
British Customs was going to possible effect the lifespan of food that needed to get to
market on time (Hallam, 2020).
Finally, the Bible discusses trade, regulations, and technological issues in the following
passages from the Bible:
•Business Regulations: Luke 14:28 (ESV) states the following: “For which of you, desiring
to build a tower, does not first sit down and count the cost, whether he has enough to
complete it?” (Bible Gateway, 2025).
•Technology: 1Corinthians 6:12 (ESV) states the following: “All things are lawful for me,
but not all things are helpful. All things are lawful for me, but I will not be dominated by
anything” (Crossway Bibles, 2001).
•Trade: Proverbs 14:34 (ESV) states the following: “Righteousness exalts a nation, but sin
is a reproach to any people” (Crossway Bibles, 2001).
REFERENCES
Bible Gateway. (2025). Luke 14:28 (ESV). Retrieved on August 28, 2025, from:
https://www.biblegateway.com/passage/?
search=Luke+14%3A28%2CProv+24%3A27%2CMatt+10%3A22%2CJosh+24%3A19-
24%2CLuke+14%3A33%2CMatt+20%3A22-
23%2CMatt+8%3A20%2C1+Thes+3%3A4-
5%2CActs+21%3A13%2CGen+11%3A4 9%2C2+Pet+1%3A13-14&version=ESV .
Bible Gateway. (2025). Proverbs 14:34 (ESV). Retrieved on August 28, 2025, from:
https://www.biblegateway.com/passage/?search=Proverbs%2014:34&version=ESV.
BUSINESS JARGONS. (2025). External Environment. Retrieved from:
https://businessjargons.com/external-environment.html.
Buye, R. (2021). Critical examination of the PESTEL Analysis Model. Retrieved from:
https://www.researchgate.net/publication/
349506325_Critical_examination_of_the_PESTEL_Analysis_Model/citation/download.
Crossway Bibles. (2001). 1 Corinthians 6:12 (ESV). Retrieved on August 28, 2025, from:
https://www.openbible.info/topics/technology.
Daddey, F. & Newton, R. (2024). Fundamentals Of Business. Retrieved from:
https://pressbooks.bccampus.ca/fundamentalsbusiness/chapter/chapter-5-the-
external environments-influence/ .
Hallam, N. (2020, May 17). Analysis - what impact will Brexit have on supply chain operations?
Retrieved from: https://supplychaindigital.com/digital-supply-chain/analysis-
what impact-will-brexit-have-supply-chain-operations .
Makos, J. (2024, Apr. 2). External Factors Affecting a Business: What to Include in Your
Analysis. Retrieved from: https://pestleanalysis.com/external-factors-affect-business/.
Makos, J. (2024, Sept. 11). Internal Factors Than Affect a Business or Organization.
Retrieved from: https://pestleanalysis.com/internal-factors-affect-business-
organization/.
Periera, D. (2024, Sept. 27). What is PESTLE Analysis? Understanding External Factors
Impacting Your Business. Retrieved from: https://businessmodelanalyst.com/what-
is pestle-analysis/ .
PESTLEanalysis Team. (2017, Apr. 3). PEST Analysis of Brexit. Retrieved from:
https://supplychaindigital.com/digital-supply-chain/analysis-what-impact-will-
brexit have-supply-chain-operations .
TheMBAins.com. (2023, Aug. 5). External Environment of Business: Definition, Types, Benefits,
and Strategy to Adapt. Retrieved from: https://thembains.com/external-environment/.
