Business environments

Macro environment

Macro environment

The macro- environment consist of those factors which impact on all organizations in an industry and over which they have little, if any, control or influence.

Factors of macro environment

• Political system

• Ecosystem

• Technology

• Demographics

• Cultural forces

• Global consideration

• Economic system

Political system

• Politics and legal issues affect businesses greatly because businesses have no control over what rules are being laid down instead politics decide how businesses should run. Big businesses like Eskom can at list have ways to negotiate with the government through these five ways:

• Negotiating

• Lobbying

• Alliance

• Representation and

• Socialization

Economic system

• Important economic issues are the wages paid to labour, inflation, the tax paid, cost of material used in production process and the price of which goods and services are sold. Business have very little influence on the above mentioned they just have to find way of doing business under the conditions presented by the above mentioned.

technology

• Technology is the transformation process that changes organizations inputs into outputs. This involves knowledge, tools and techniques that they use to transform ideas, information and materials into finished goods. Businesses cant change fast growing rate of technology as it is taking over many jobs from the citizens. A job that can be done by ten people is now done by one machine which operated by one person.

demographics

• These are characteristics of work groups, organizations, specific markets or national population, such as individuals between the age of 18 to 25. changes in demographics also play an important role in businesses. Businesses need to make sure that they are selling the right products to the right market.6

Cultural forces

• Surrounding businesses are various cultural forces, which are often not as visible as the other general environmental forces. Culture involves values and beliefs which affect the customers busying decision. Business should sell relevant products to relevant cultures. For example it would be useless to open up a shot in a colored dominating area and sell traditional cloths because very few people will buy, that’s if they buy.

Global consideration

• Since south Africa was accepted back in the international community, many are being affected by the growing global economy. South African organizations are not immune to global trends and development, and in the strategic planning process manages need to asses these trends and developments to identify potential opportunities and threats

Ecosystem

• Environmental concerns have changed the way producers and consumers alike think about products, the raw material used to make them, and the by-products of manufacturing process. Now south African organizations are increasing being encouraged to comply with the environmental best practice rather than simply addressing environmental issues. Organizations now face an extra job of taking care of the environment they are doing business in.

conclusion

• The challenge for manages is to monitor the business environment continuously in order to identify trends and changes, then determine which of these represent threats; and then finally to develop strategies which will take advantage of the opportunities and protect the organization against threats.