Assessing the Impact of Macro Environment on Business Organization

INTRODUCTION
TASK 1
1.1 Assess the positive and negative impact of macro
environment
It can be defined as concept of marketing principle, used by
various business enterprise in order to track the external
environment in which they are operating or thinking to
introduce new product or services. Marketers used this
framework to monitor the external factors in terms of
government intervention, technology, indefinite laws that
have an adverse impact on the functions of business
organization. Management uses PESTLE model to
understand current working condition and arrange
themselves for future contingencies. Though this model is
helpful, but it also contain certain flaws which are
described as follows:
Positive impact of Pestle analysis:
 Cost Effectiveness: It can be done on a simple piece
of paper with a pen. No Hi-tech is required in order to
analyses the factors of macro environment related with
the company’s operation. Thus, this analytical tool is
cost effective and saves time, which firm can used in
order to carry out other important functions.
 Deeper Understanding: Environment affects the
various operations and functions of business directly
and indirectly. Thus, an urge for PESTLE model
created which determine external factors in terms of
political, legal, environmental that affects the business

environment. For instance, company can overlook
laws related to safety and consumer while making the
sample of a particular product. Also the firm
determine technological barriers and competitive
level.
 Alertness Development: Business entities can use
PESTLE strategic model in both broad and narrow
sense. Such as when a company wants to launch its
new product, they can narrow down their analysis in
terms of specific target market, competitors,
technology etc. PESTLE enables the firm examine
changes thoroughly and make plan that decrease the
final cost.
 Exploit Opportunities: PESTLE model helps the
firm to determine their strength. For instance if an
entity is using this model to assess the latest
technology trends, they will found out that, how now a
days company’s are using digital media platform
which serves as an opportunity for the cited firm as
they can also use such latest technology and gain
higher competitive level.
Negative impact of PESTLE analysis:
 Constant Reviewing: The major drawback of this
tool is that it determine the impact of external
environment on business enterprises which is
changing very rapidly. Thus enabling management
to study such factors on regular basis which is
wasting time and money. For instance, Government

has increase taxation rate which directly impact the
firm’s profitability. Analyst will provide measures
to the company in order to prepare them for future
uncertainty. Then suddenly in next month
government encompass subsidy to firm which
positively affect the operation of business. Hence,
this method creates ambiguity and hassle the
functions of organization.
 Numerous People Needed: PESTLE requires large
number of people who critically assess the external
factor affecting the ongoing operation of company.
Knowledge and suggestion of different people
towards a similar scenario, makes it difficult for
firm to end up one collective decision. Also
company has to bear the additional cost in hiring
such people.
 Need for Resources: As Pestle deals with political,
economical, technical, legal factors and in order to
analyses the impact of such factors company
requires resources on the basis of which they can
assess or interpret them. This requires huge time
and money which serves as a disadvantage for the
entity.
 Subjective Analysis: Final outcome of PESTLE
analysis is based on the opinion and judgment of
numerous people which hired by company itself.
Result are often subjective and elucidation may
vary from person to person depending upon their