Positive And Negative Influences Of The Macro Environment

As for external factors one of the external factors would be perhaps a new law that is given and affects directly or indirectly the business and that business needs to make some changes.

There are two types of social factors that can affect a business; there is external affects and internal affects. Internal affects are about demographics and lifestyle whereas external is about social costs and benefits

A business does not operate in a vacuum.It has to act and react to what happens outside the factory. These factors that happened outside the business are known as external factors or influences.

1. Macro environment analysis: the major externals which affect company’s decision making, marketing strategy and performance. It includes:

Economic factors – which include interest rates, economic growth, exchange rates, inflation and taxation changes (Nieman, G; 1998). The change the economy can have a major impact on the behaviour of the business. For example: inflation may cause a higher wage demand from employees (Herrigton, Kew & Kew; 2009).

Macro environment or macro forces consists of the larger societal factors that have the potential to affect an organization’s strategies. According to Phillip Kotler, these variables include demographic, economic, natural, technological, political, and cultural outside forces. (“Josbd”, n.d, para. 7)

Macro environment are the external and uncontrollable factors that influence an organization’s decision making and affects its performance and strategies.

Macro environment comprises external forces that organisation cannot directly control, instead organisation need to manage their macro environment in a way that benefits them ("The Macro Environment & Pest Analysis", 2016). The PESTLE analysis is the most widely recognized approach for considering the external business environment (Gupta, 2013). PESTLE analysis stands for Political, Economic, Social, and Technological, Legal and environmental analysis and describe a framework of macro environmental factors utilized as a part of the environmental scanning component of strategic management. Generally, all the PESTLE factors might not important for all types of industry its depends up industry nature or size. This PESTLE analysis is based on Accor Hotels in Australia which is a famous and globally recognise hospitality brand.

Macro environment is crucial to the development of a company. All the external factors can have huge positive or negative influences on Travis Perkins plc, therefore a better understanding of the environment of the company is of supreme significance (Peng & Nunes, 2007). Among all the analysis tools, PEST analysis is one of the most effective tools to analyze the external environment of a company (Riley, 2012). This part will demonstrate PESTLE analysis of Travis Perkins plc below. The result of PESTLE analysis can be demonstrated in the following table 1.

External influences cover a wide variety of factors, and their influence can differ between business types. These include the following:

These factors influence the internal environment of an organisation and they help in identifying the past and the present of the company, It also provides a frame work for reviewing strategy position and direction of the company.

Macro environment is said to be the most general layer of the environment. This consists of broad environmental factors that have an impact on the organization. The PESTEL framework helps us to identify the future trends which might impinge on Nintendo and therefore identify the key drivers of change. On the other hand the five forces framework helps to understand how the competitive dynamics within and around the video game industry are changing.

This business tool is used as a strategy to explore the macro environment of Samsung and identify how future trends in the political, economic, social, technological, environmental and legal environments might have impacts on their organisation on a global scale.

In today's world, no business operates in isolation without interacting with the environment where it operates. Irrespective of the nature of business whether public or private organization; manufacturing; service industry; local or international firm, its operations are inhibited by the environment in which it operates.

Macro environment consist of those major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.