Certified Human Resource Professional (CHRP) Practice Exam

Which of the following is an example of an organizational environmental factor?

1. The economy

2. Competition

3. Legislation

4. Stakeholders

The correct answer is: Stakeholders

The correct answer identifies stakeholders as an example of an organizational environmental factor because stakeholders include individuals or groups that have an interest or investment in the organization, which can be affected by or can affect the organization's operations and decisions. These can include employees, customers, suppliers, investors, and the wider community, all of whom interact with the organization and influence its functioning. The concept of organizational environmental factors encompasses various influences outside the organization that can impact its performance and strategic decisions. While the other options—such as the economy, competition, and legislation—also represent significant environmental factors, they reflect broader external conditions rather than the specific relationships that stakeholders embody. Stakeholders are central to understanding how an organization operates within its environment and the expectations and pressures it faces, making them a critical component of organizational dynamics.