2. The economic element of the mega-environment encompasses the systems of producing,distributing, and consuming wealth.a. In a capitalist economy, economic activity is governed by market forces and the means ofproduction are privately owned by individuals, either directly or through corporations.b. In a socialist economy, the means of production are owned by the state and economicactivity is coordinated by state plan.c. In practice, countries tend to have hybrid economies, incorporating elements of capitalism andsocialism.d. Organizations are influenced in any given economic system by a variety of economicconditions over which they have little control, such as inflation and interest rates.3. The legal-political element of the mega-environment includes the legal and governmentalsystems within which an organization must function.a. Organizations must operate within the general legal framework of the countries in which theydo business.b. Organizations are subject to an increase in lawsuits filed by customers or employees.c. The political issues which affect organizations include those which influence the extent ofgovernment regulation.4. The socio-cultural element of the mega-environment includes the attitudes, values, norms,beliefs, behaviors, and associated demographic trends that are characteristic of a given geographicarea.a. The socio-cultural element is of particular importance to multinational corporations.b. Socio-cultural trends can result in important shifts in demand for products.5. The international element of the mega-environment includes the developments in countriesoutside an organization’s home country that have the potential impact to the organization.International factors far beyond the direct influence of a particular organization can have profoundeffects on its ability to operate successfully.a. Fluctuations of the dollar against foreign currencies influence the ability of an organization tocompete in international markets.b. Free-trade agreement, such as the NAFTA, GATT can affect an organization either positivelyor negatively.The Task EnvironmentThe task environment is that segment of the external environment made up of specific outside elements(usually organizations) with which an organization interfaces in the course of conducting its business.