Such causes are beyond the control of the individual unit and they usually affect a large number of units belonging to an industry. They are generally the result of changes in the structural and environmental factors like infrastructural bottlenecks, business cycles, and Government policies. Although external causes may vary from unit to unit, industry to industry or form time to time, the following have been found to be the most common:

(i)    Change in the policies (industrial, foreign trade, licensing, etc.) of the government.
(ii)    Inadequate availability of requisite inputs like raw materials, power transport and skilled labour.
(iii)    Inadequate demand for the product.
(iv)    Problems in the normal availability of inputs like raw materials, crudity, skilled labour, etc.
(v)    Recessionary trends prevailing in the national or global economy.
(vi)    General industrial unrest in the region in which the business is located.
(vii)    Natural calamities like earthquake, droughts, floods, fire, etc.

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