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The Impact Of Micro and Macro Environment Factors on Business

   

Added on  2020-12-10

5 Pages1296 Words163 Views
Table of ContentsINTRODUCTION...........................................................................................................................1a) Micro and Macro environmental factors that affects the business- .......................................1b) Needs of organization to manage sustainably and behave ethically for the benefits of social,economic and environmental factors of business. ......................................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4INTRODUCTION

Business environment consists all those factors that affects the working of business.These factors are Internal factors and external factors. Internal factors lies within theorganization which includes Physical, financial, human resource and technological factors ofbusiness which introduce to the company's strengths. External environment comprises of microand macro factors that affects the working of business. These factors will be discussed further. a) Micro and Macro environmental factors that affects the business- Micro factors- These factors affect the performance of company and its ability to servecustomers. Micro factors are- Customers- Customers are the one to whom products are sold by business. Business existbecause of customers. Customers serves as the important segment of micro environment ofbusiness. Customers can be of different types as households, retailers, government and foreignbuyers etc.Suppliers- These are the persons who supply inputs which may include raw materials and otherfactors of production to business. High prices by suppliers in exchange of their goods willincrease the cost of production and their shortage of supply will lead to less productivity ofbusiness. Thus any business must have more than one supplier in order to avoid suchcomplications.Competitors- Competitors are the other business firms selling similar goods for competing inthe market. Competitors attract customers by their different policies and gain competitiveadvantage which affects the business firm as its customers get reduced resulting to lowprofitability(Kolk, 2016).Macro Factors- Macro factors includes various economic and non economic factors that affectsthe business by providing opportunities and causing threats. These factors include- Political and legal factors- This includes intervention of government and their impact onbusiness firm. These factors are government regulation, taxation policies, political stability,Labour laws, union, consumer protection act and other rules and regulations imposed bygovernment to business organization. Instability of these factors will affect the growth as well asfunctioning of business (Hamilton and Webster, 2018). Economic Factors- These factors are the ones that affect the economic stability of business.Factors such as inflation, interests rates, currency exchange rates, return on investment etc. Any

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