Positive and Negative Impact of Macro Environment

This presentation discusses the positive and negative impact of macro environment on businesses. It covers the political, economic, social, technological, legal, and environmental factors that affect organizations. The presentation also includes an analysis of the internal and external factors of an organization, as well as the strengths and weaknesses of external macro factors. References are provided for further reading.

BUSINESS AND
BUSINESS
ENVIRONMENT
(TASK 3&4)

TABLE OF CONTENT
• Introduction
• Positive and Negative Impact of Macro Environment
• Internal and External Analysis of Organisation
• Strength and Weakness of External Macro Factors
• References

INTRODUCTION
Business environment is a study of all external and internal factors who affect
organisational activities in direct or indirect manner. Business environmental factors affect
the functions of a company which include demand and supply, customers and employees,
management etc.

Positive and Negative Impact of Macro
Environment
Macro environment is that which exist outside the organisation and affect their business
activities. PESTLE analysis is a type of external environment which stands for Political,
economical, social, technological, legal and environmental.

CONTINUE….
Positive and negative impact of PESTLE analysis are as follows:-
• Political: Political factor include different rules and regulations made by government. It
includes taxation policy, stability of government, trade regulations, price regulation etc.
• Positive- When General Motors pay tax timely then it make positive impact on their
brand image. It is also necessary to follow rules and regulations made by government.
• Negative- If General Motors does not pay tax on time then it make negative impact on
the brand image of organisation.

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• Economical: Economic factor include inflation rate, exchange rate, demand and supply
of products, national income, inflation and deflation rate etc.
• Positive- When there is a deflation arises in country then prices of goods become down
and customer buy more products it make positive impact on sale of General Motors.
• Negative- when there is an inflation arises on company then prices of goods are increases
and customers are avoid to buy products.

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• Social: This factor includes different culture and norms which are followed by people of
society. Buying behaviour of consumers are depends on society's norms.
• Positive- When General Motors follow the culture of society then they meet buying
behaviour of consumer which helps to increasing their sales.
• Negative- When company does not able to make vehicles as per the preference of
customers then it make negative impact on General Motors.

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• Technological: Now a days technology become more advance in manufacturing of
vehicles. It make impact on effectiveness and efficiency of an organisation.
• Positive- General Motors use advance technology and their manufacturing style is done
by robots. It make positive impact because it contribute in providing latest design,
advanced vehicles etc.
• Negative- If company does not innovate their vehicles and use latest technology for
manufacturing then it make negative impact on General Motors.

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• Legal: There are certain laws and legislation imposed by government of nation. It
include different types of laws such as custom law, safety law, employment law, health
and safety act etc.
• Positive- General Motors follows all the rules and regulations made by government
which make positive impact on their business activity.
• Negative- If company not follow the rules and regulations the it make negative impact on
brand image of General Motors.

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• Environmental: It include both internal and external environmental factor which make
either positive or negative impact on a firm.
• Positive- When General Motors helps to save the natural environment and recycling of
used products which make positive impact of their manufacturing process.
• Negative- When company does not contribute in saving of natural resources then it make
negative impact on their brand image.

Internal and External Analysis of Organisation
SWOT analysis:- SWOT analysis is a tool used by managers to to determine the
significant intrinsic strategic factors which are strengths, weaknesses, opportunities and
threats. General motors company provide, design and manufactures trucks, cars, auto
mobile parts, etc. It is the astronomic performer in the automotive business all over the
world.

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• Its SWOT analysis is described under.
• Strengths: Leading market perspective in North America and China:- It is one of the
largest automotive industry, as it has major position in market of North America and
China. Its leading existence in such a powerful markets assist General Motors to
strengthen global market status.

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• Weaknesses: Requires more investment for new technologies:- Along with different
strengths of General motors , it has few weaknesses. To expand and grow its business the
company plans require to invest more money in technology, in order to incorporate the
processes all over the world. In present the company's investing in technologies is not
according to their vision.

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• Opportunities : Increasing demand of alternate fuel and hybrid electric vehicles:-
The demand for hybrid and alternate fuel vehicles is anticipated to be increase in
upcoming time at a strong charge considering powerful concerns to minimise the carbon
emissions and becoming environmentally sustainable. It is good and advantageous
opportunity for the company.

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• Threats : Fluctuating exchange rates:- General motors is operating all over the world
and it has currency revelation in many of its activities. Fluctuation in respect to the dollar
currency affects it s transactions largely. It will affect company's income and
profitability.

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• Porter's five force analysis of General motors
• Competitive rivalry:- The General motors has many competitors in the market – Nissan,
Toyota, Chrysler, etc. All these companies are well popular and creates intense
competition for the company.
• Threat of substitutes:- The threat of substitutes for General motors is high. To reduce
the threats the company should focus on its policies, features, prices, quality, etc. in
comparison of other companies.

Strength and Weakness of External Macro Factors
• Strength and weakness of external macro factors are discussed as follows:-
Factors Meaning Strength Weakness
Political This factor include rules
and regulation made by
government.
When General Motors
follow the rules and
regulations made by
government then it
enhance the brand image
of organisation and
become the strength of a
company.
When General Motors
does not follow the rules
of government and does
not pay tax timely then it
make negative impact on
brand image of company
and become weakness of
a firm.

REFERENCES
• Erasmus, B., Strydom, J. W. and Rudansky-Kloppers, S. eds., 2016. Introduction to
business management. Oxford University Press Southern Africa.
• Gillanders, R. and Whelan, K., 2014. Open for business? Institutions, business
environment and economic development. Kyklos. 67(4). pp.535-558.
• Maula, M. and Murray, G., 2017. Corporate venture capital and the creation of US public
companies: The impact of sources of venture capital on the performance of portfolio
companies. Creating value: Winners in the new business environment, pp.161-183.

Thank you