Table of Contents
Macro Business Environment
Macro Business Environment
Macro environment refers to all those external forces which have homogeneous (Same) effects on the working of business organizations across business sectors. The Macro environment of a business has five major components are as follows:
- Economic environment
- Social environment
- Political environment
- Technological environment
- Legal environment
Macro Business Environment
1. Economic environment-
Those economic factors which have their effects on the working of the business is known as Economic Environment. Some economic factors which could affect business firms as follows: –
- Economic System of a country
- Rates of saving and investment
- Rate of economic growth
- The stage of economic growth
- Fiscal policy
- Change in Interest rates,
- Inflation rates
- Change in the income of the people,
- Monetary policy
- Rate of income tax
- Financial Market
Macro Business Environment
2. Social environment-
Those social factors which have their effects on the working of the business are known as Social Environment. Some social factors which could affect business firms are as follows: –
1. Customs and traditions
2. Social Values
3. Social trends
4. Society’s expectations from business
5. Education Level
6. Literacy rates
7. Lifestyle
3. Political environment-
Those political factors which have their effects on the working of the business are known as the political environment. The political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business. Some political factors which could affect business firms are as follows: –
1. Political stability
2. Political interference in business
3. Government policy towards business
4. General stability of the Government
5. Government foreign policy towards business
6. International relations of the country
7. Defence policies of the country
Macro Business Environment
4. Technological environment-
The technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business. Some technological factors which could affect business firms are as follows: –
- Technological Development (In-country or outside country)
- Rate of technological change
- The extent of use of particular advances
- Sources of technology (Internal sources or External sources)
Macro Business Environment
5. Legal environment-
Those legal factors which have their effects on the working of the business are known as the legal environment. The legal environment includes various legislations passed by the government, administrative orders issued by government authorities, court judgments as well as the decisions rendered by the various commissions and agencies at every level of the government central, state, or local. Some legal factors which could affect business firms are as follows: –
- Legislation passed by the government
- Administrative orders issued by government authorities
- Court judgments
- Rights and duties of citizens.
- Business and tax laws.
- The judicial system of the country
Macro Business Environment