Factors Of Macro Environment

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Macro & Micro Environmental Factors

An organisation’s operating environment has two parts; the Macro environment and the Microenvironment.
• Macro Environment – This contains external forces that an organization can't directly control, instead organisations need to manage their macro environment in a way that benefits them.
• Micro Environment - This is made up of internal factors, which means that the organisation is able to control their microenvironment

Internal Environment

The internal environment is made up of factors within the firm itself. Examples include employees, company policy, capital assets, the firm's structure and the firm's products (materials). These factors can be controlled by the firm.

Micro Environment

The microenvironment
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Political factors influence organisations in many ways. Political factors can create advantages and opportunities for organisations. Conversely they can place obligations and duties on organisations. Political factors include the following types of instrument:
- Legislation such as the minimum wage or anti discrimination laws.
- Voluntary codes and practices
- Market regulations
- Trade agreements, tariffs or restrictions
- Tax levies and tax breaks
- Type of government regime e.g. communist, democratic, dictatorship
Non-conformance with legislative obligations can lead to sanctions such as fines, adverse publicity and imprisonment. Ineffective voluntary codes and practices will often lead to governments introducing legislation to regulate the activities covered by the codes and practices.


The second element of a PEST analysis involves a study of economic factors. All businesses are affected by national and global economic factors. National (and global) interest rates and fiscal policy is set around economic conditions. The climate of the economy dictates how consumers, suppliers and other organisational stakeholders such as suppliers and creditors behave within society. An economy undergoing recession will have high unemployment, low spending power and low stakeholder confidence. Conversely a “booming” or growing economy will have low unemployment, high spending power and high stakeholder
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