Economic and Financial Management

This module explores the impact of micro and macro economics on the operations of organizations, with a focus on financial management in charity organizations. It also discusses economic theories and their relevance to contemporary business. Case study: Macmillan Cancer Support.

Economic and Financial
Management

Executive Summary
This module is about to project different factors related to micro and macro economics
that put an impact over the operations of organisation. Theories of economics would also project
that carry an influence over the operations of organisation. IN context to the charity organisation
economic and financial management play a significant role in the growth of such organisation.
Charity organisations do not conduct any specific activity to entertain profits so they require
financial support ion form of charity and donation. Financial management is emphasis over
managing and controlling the financial support available for such organisation.

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY ..................................................................................................................................4
Macro and micro economic factors led to economic failures......................................................4
Economic theories........................................................................................................................6
Micro and macro economic factors impact over organisation.....................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Financial management is defined as managing and controlling the financial resources
associated with the company. This report is based on the case study of Macmillan Cancer
Support in respect to its financial management practices. The organisation was established in the
year 1911 by the founder Douglas Macmillan. Headquarter of the organisation is based in
London, United Kingdom. In recent time company has seen a slowdown in business operations.
In this report economic and financial management aspects of company would be analysed.
Henceforth, report would emphasis on the impacts macro and micro economic factors created
over the operations of company. This report would also assess different economic theories in
context to contemporary business. Furthermore, report will analysis different impacts economy
could create over business operations.
MAIN BODY
Macro and micro economic factors led to economic failures
PESTEL Analysis and SWOT Analysis tool can be used to address various micro and
macro economic factors impact over economic failures of company.
PESTEL Analysis
PESTEL Analysis consumes factors like political, economic, social, technological,
environment and legal factors influences business operations of company.
Political factor: Political factor involve various policies and tactics form by government to
support the corporate sector. Government policies influence directly over the success and failures
of organisations (Damle and et.al., 2020). In recent time government in United Kingdom has
given less emphasis over growth and development of charity organisations. Not any proper
policy of government could sustain for long time which also became the reason behind the
economic failure seen by Macmillan Cancer Support.
Economic factor: Operations undertaken by Macmillan Cancer Support requires financial
assistance in order to perform the operations. Lack of proper funding also the key reason why the
organisation needed to face economic failure. Charity organisation do not get proper funds in
form of loans and borrowing. They most of the times depends up[on the public funding in order

to raise finances. Unavailability of appropriate funds became the key reason the organisation
could face economic failure in United Kingdom.
Social factor: Social factor contains the perceptions society has established in respect to charity
organisations. In recent time people in United Kingdom involved less in charity and donations
due to economic slow down and in decent time corona pandemic also affected the salary and
income of people in the drastic manner (Jiménez and et.al.,2017). All these factors negatively
affected over the funding requirements of Macmillan Cancer Support. Charity organisations do
not have any earning capacity whatever funds they seek avail in form of charity and donation.
Technological factor: Technological factor involve technological advancement and
developments. In United Kingdom government has given a huge emphasis over the technological
growth of country. Macmillan Cancer Support also channelises various marketing and branding
campaign to spread brand awareness in context to organisation. Company could not monitor its
brand management campaigning effectively with the support of technology tools that also
became the cause behind the economic failures organisation has faced in United Kingdom.
Environment factor: Environment factor is another key element associated with macro
economics. Organisation could not effectively get involve in various social activities.
Organisation could have involved in various corporate social responsibilities with the partnership
of any of the corporate organisation (Kulcsár and Brown, 2017). This might have created a
positive impact in front of the people based in United Kingdom. In case of charity organisation
how much the brand is trust worthy influence the decision-making of people ion respect to
charity and donation.
Legal factor: Legal factor involve all laws and legislation applicable over the charity
organisation. Legal regulations applicable over charity organisations are unclear which also
became the cause behind the failure faced by Macmillan Cancer Support. Legal regulations must
be minimum especially for charity organisations so that they can sustain their operations
efficiently.
The above mentioned factors are the key elements associated with the macro economics
that causes the reasons behind the failure of Macmillan Cancer Support.
SWOT Analysis
SWOT Analysis is a prominent tool use to analysis factors related to micro economics
impacted over the operations entertained by charity organisation.

Strengths:
 Well established organisation.
 Brand value
 Technological advancement
Weaknesses:
 Ineffective human resources
 Less focus over talent management
 Inappropriate technological usage
 Inappropriate financial management
Opportunity:
 Social media and digital promotions
 Funding opportunity
Threat:
 Threat of competition from other charity organisations
Economic theories
Economic theories applicable over Macmillan Cancer Support can be projected in the
following points.
The economic theory of charitable giving
This theory of economic is specially applicable over charity organisation. This theory
motivate peoples and individuals to donate the resources they are capable off to different charity
organisations. Per capita income of people in United Kingdom also make them able to donate a
specific amount of money in order to growth organisations like Macmillan Cancer Support.
These organisations are solely depends upon the public funding for channelising different
functional activities (Marchionatti, 2020). This theory motivate peoples to contribute in the
funding requirements of such organisations. The main cause behind the failure of Macmillan
Cancer Support is due to the lack of financial resources available with the organisation. Lack of
funding became the ultimate reason why the organisation could face economic failure as a part of
functional activity.
Keynesion theory

This theory of economics project that aggregate demand will not always meet the supply
produced. Macmillan Cancer Support has been engaged in charity in respect to cancer care
patient. The demand of proper cure treatments for cancer patient is more than the capacity of
organisation to conduct charity for people. This theory support the limitation of organisation in
respect to serving its services due to availability of lack of financial and other resources.
Behavioural economics theory
Behavioural economics theory emphasis over the impacts psychological, cognitive,
emotional, cultural and other relevant factors over the decision making of management. This
theory drives the proper behaviour of management with regard to make decisions. Among the
main causes behind the Macmillan Cancer Support failure inappropriate decision making due to
negligence of all different factors associated with the behavioural economic theory.
Classical economics theory
Classical economic theory is a traditional theory of economics. This theory denotes that
economics is a self regulated function. In any circumstances economy will be able to achieve the
natural level of real GDP (Pandey, 2016). Management of Macmillan Cancer Support did not
give much emphasis over the concept of the classical economic theory in order to conduct the
operations. Economic position of United Kingdom create a direct impact over the per capita
income of people in United Kingdom. Buying capacity of the individuals motivate them in
donating the money in charity. Macmillan Cancer Support did not given much emphasis over
this theory in order to sustain the organisation.
The above mentioned theories are the key theory of economics. In order to entertain
success it becomes crucial to get involved with all these theories in order to conduct the
operations even in case of charity organisations.
Micro and macro economic factors impact over organisation
Micro and macro economic factors put the following impacts over organisation.
Availability of funds: Macro and micro economic factors like economic factors, resource
availability and many others put an impact over the operations of Macmillan Cancer Support. AS
the charity organisations do not get involve in earning money or conducting business operations
so the entire funding requirements of organisation is solely depends upon the charity and
donations granted by people and companies engaged in corporate social responsibility. If the
economic situation of United Kingdom is well stable it will create a better opportunity for the

Macmillan Cancer Support to collect financial support in order to meet its all different needs and
requirements.
Human resource management: Social factor associated with macro economics influence the
human resource management of organisation. Human resources are also among the key resources
associated with the organisation. If the social factor is well developed it would support the
organisation in sustaining skilful human resources at organisation for conducting various
functional activities at organisation (Ronto and et.al.,2017). Ineffective management of human
resources also became the reason behind failure of Macmillan Cancer Support in United
Kingdom. Talent management is also a critical aspect that improve the growth potential of
organisation.
The above mentioned impacts are the two key impact micro and macro economic factors
created over the Macmillan Cancer Support. Apart from these impacts many other impacts like
risk management, funding management, operation management and all aspects of operations
these factors put a direct impact.
CONCLUSION
This report has projected various micro and macro economic factors like political,
economic, social, technological, environment and legal factors that directly influences the
operations of organisation. Funding is a big issue specially in case of charity organisation as they
are not engaged in earning profits so all financial assistance they are seeking for they need to
collect in form of charity and donations from people, companies and organisations. Many of the
non profit making organisations needs to face failures even at the initial stage of the
establishment and lack of financial support is the key barrier behind the failure of such
organisations.

REFERENCES
Books and Jouranals
Damle, V. G. and et.al., 2020. Micro versus Macro–The effect of environmental confinement on
cellular nanoparticle uptake. Frontiers in bioengineering and biotechnology.8. p.869.
Jiménez, A. M. and et.al.,2017. Sugarcane bagasse reinforced composites: Studies on the young's
modulus and macro and micro-mechanics. © Bioresources, 2017, vol. 12, núm. 2, p.
3618-3629.
Kulcsár, L. J. and Brown, D. L., 2017. Population Ageing in Eastern Europe: Toward a Coupled
Micro-Macro Framework. Regional Statistics.7(1). pp.115-134.
Marchionatti, R., 2020. Economics in Berlin and Vienna: A Mosaic of Theories and Research
Programs. In Economic Theory in the Twentieth Century, An Intellectual History-
Volume I (pp. 129-193). Palgrave Macmillan, Cham.
Pandey, P., 2016. Using Theories from Economics and Finance for Information Security Risk
Management.
Ronto, R. and et.al.,2017. Environmental factors of food literacy in Australian high schools:
Views of home economics teachers. International Journal of Consumer Studies.41(1).
pp.19-27.