Macro Environment

1130 Words May 16th, 2012 5 Pages
Q.1) Explain How Macro Environmental Factor Affect International Business Product With An Example.
There are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categories them using the PESTEL model. This classification distinguishes between:
Political factors:
These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidizing firms? What are its priorities in terms of business support? Political
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Legal changes can affect a firm 's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).

Different categories of law include: * consumer laws: these are designed to protect customers against unfair practices such as misleading descriptions of the product * competition laws: these are aimed at protecting small firms against bullying by larger firms and ensuring customers are not exploited by firms with monopoly power * Employment laws: these cover areas such as redundancy, dismissal, working hours and minimum wages. They aim to protect employees against the abuse of power by managers * Health and safety legislation: these laws are aimed at ensuring the workplace is as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate provision of safety equipment
Typical PESTEL factors to consider include: Factor Could include: * Political e.g.: EU enlargement, the euro, international trade, taxation policy * Economic e.g.: interest rates, exchange rates, national income, inflation, unemployment, Stock Market * Social e.g.: ageing population, attitudes to work, income distribution * Technological e.g.: innovation, new product development, rate of technological obsolescence * Environmental e.g. : global warming, environmental issues * Legal e.g. : competition

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