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What Are External Agents?

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  • Written By: Jim B.
  • Edited By: M. C. Hughes
  • Last Modified Date: 05 November 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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In the business world, external agents are forces that are beyond the scope of a firm or company yet have a direct effect on the fortunes of the company. Although firms have no control over their actions, they must find a way to deal with these agents so that they prove to be beneficial. Among the most important external agents that have an impact on a business are customers, business competitors, suppliers, and societal forces. Companies should parse through these agents to figure out which of them can provide business opportunities and which of them may actually be threats to the business.

Business owners and managers can control their own personnel and their own decision-making process. Ultimately, however, they rely on forces outside of their organizations as the lifeblood of their business operations. Without the role played by external agents on a business, there would be no products to sell and no customers to buy them. No business can exist without dealing with these forces, and the ones that do so in the most effective manner are usually at the top of their respective industries.

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Of all the external agents that affect a company, none is more impactful than customers. The customers buy the products sold or services offered by businesses, and are thus responsible for creating profits for these firms. As such, much effort is put into marketing products so that customers will react. In addition, companies do their best to cultivate positive customer service techniques so that a good relationship is formed between a business and its customers.

There are very few businesses that are unaffected by the actions of market competitors, which are extremely crucial external agents to consider. When a direct competitor makes a significant maneuver, a company must often decide whether to respond in kind. In addition, firms must develop relationships with the suppliers of their products. Having reliable suppliers who deliver their goods on time can keep a company's production schedule intact.

It is also important for companies to consider the societal forces that may factor into their organization's success. How conservative or liberal a society is, what its religious outlook may be, whether or not any legal factors can come into play, and other variables can affect businesses operating within a certain area. As with all other external agents, company leadership must study these factors closely to determine whether there are advantages to be had or whether the agents provide certain obstacles to business.

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