Terminology

Term Definition
The external The external environment consists of variables (opportunities and threats) that are
environment outside the organization and not typically within the short-run control of top management.
The internal The internal environment of a corporation consists of variables (strengths and weakness)
environment that are within the organization itself and are not usually within the short-run control of
top management.
Task The task environment includes those elements or groups that directly affect a corporation
environment and, in turn, are affected by it.
Strategy Strategy formulation is the development of long-range plans for the effective management
formulation of environmental opportunities and threats, in light of corporate strengths and weaknesses
(SWOT). It includes defining the corporate mission, specifying achievable objectives,
developing strategies, and setting policy guidelines.
Mission Mission: an organization's mission is the purpose or reason for the organization's existence.
In tells what the company is providing to society- either a service such as housecleaning
or a product such as automobiles.

Terminology

Term Definition
Objectives Objectives: are the end results of planned activity. They should be stated as action
verbs and tell what is to be accomplished by when and quantified if possible.
Strategy A strategy of corporation forms a comprehensive master plan that states how the
corporation will achieve its mission and objectives. It maximizes competitive advantage
and minimizes competitive disadvantage.
Policy A policy is abroad guideline for decision making that links the formulation of a strategy
with its implementation. Companies use policies to make sure that employees
throughout the firm mak decisions and take actions that support the corporation's
mission, objectives, and strategies.