The external environment is the highly complex macro-environment that influences the purposes and modes of operation of public organizations. The importance of the ability of public organizations in properly responding to the pressures by these external influences is crucial in maintaining the organization’s optimum functions (Mc Kinney & Howard, 1998). The external environment plays important role in the functioning of the organization. First, it provides demands and resources that trigger and sustain the organization.
Second, it sets parameters for organizational activities and third, it belongs to one of the major places where organizational activities are judged. The three major components of the external environment are ecology, cultural setting and the political economy. There is interrelation between the components and change in the external environment cause change in the structure and internal processes of public administration. The changes influence the outputs of the organization.
Public administration takes the central role in a political system. By studying each component and understanding why and how organizations behave and perform the way they do, public administrators are able to manage the external environment in order to make the organization function more accountably. The ecology of the government determines greatly what is to be done while the cultural setting helps identify the proper response to these particular demands.
Political economy specifies how government officials exercise the power that is granted to them. At the executive level of an organization, leaders are asked to deal with the external environment that include the market organization works within, the competitors and the workforce fluctuations that may be present. At this level, individuals lead the organization in terms of the mission and the vision of the organization and they are in charge as well to strategically plan for the future (Rabin, 2003).