What are some examples of environmental factors that may influence an organization’s external context?

What are some examples of environmental factors that may influence an organization’s external context?
A . Climate and natural resources
B . Organizational procurement, vendor selection, and contract negotiation for hazardous waste disposal
C . Organizational performance metrics, goal setting, and progress tracking regarding climate-related projects
D . Organizational response to new carbon emission regulations

View Answer

Answer: A

Explanation:

Environmental factors in an organization’s external context include elements of the natural environment that affect its operations and strategies.

Examples of Environmental Factors:

Climate: Weather patterns, global warming, and natural disasters impact resource availability and operational continuity.

Natural Resources: Availability of raw materials and environmental conditions influence sourcing and production.

Relation to External Context:

These factors exist outside the organization and require adaptation in strategies and risk management.

Why Other Options Are Incorrect:

B: Procurement and vendor selection are internal processes.

C: Performance metrics are internal measures.

D: Responding to regulations involves compliance strategies, which are organizational actions, not external environmental factors.

Reference: ISO 31000 (Risk Management): Highlights environmental factors in risk assessments.

COSO ERM Framework: Considers external environment as part of strategic risk context.