The implementation of a new bonus program is an internal factor.
New product development is an internal factor.
A change to a decentralized management system is an internal factor.
In developing a budget, internal and external factors are considered and assumptions about those factors are made. Internal factors are the factors that take place inside the organization, external factors are those outside of company's direct control. Some of the external factors are: state of economy, government regulations, labor market, competitor's activities including mergers and acquisitions. Thus, the merger of two competitors is an external factor that should be considered in the development of a budget.
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