Micro and Macro Environmental Factors Impacting Business Decision Making

Running Head: MANAGEMENT 0
Context of business

MANAGEMENT 1
Table of Contents
Task 1.........................................................................................................................................2
Micro and Macro environmental factors................................................................................2
Task 2.........................................................................................................................................5
Background of Tesco.............................................................................................................5
Vision of Tesco......................................................................................................................6
Leadership Style and Management Practice of Tesco...........................................................6
Strategies adopted by Tesco...................................................................................................7
Implementation and achievement of above practices and strategies.....................................7
Recommendations......................................................................................................................9
References................................................................................................................................10

MANAGEMENT 2
Task 1
Micro and Macro environmental factors
The dynamic and modern business in this global environment is rapidly changing at a
very fast pace. These are due to both micro and macro environmental aspects close to a
corporate and have a direct influence on its success. It is important for business management
to consider full exploration of those macro and micro environmental factors that closely
impact business decision making.
Some of the significant micro environmental factors include – customers, competitors,
supplier, distribution channels and public (Park et al, 2011). These micro environmental
factors impact the business performance in many ways and make them understand the
significance for strategy formulation. Below, these micro-environmental factors are outlined
–
• Customers – In the modern global environment, customers are known as the most
significant factor in the microenvironment due to the influence they have on it. In this
competitive 21st Century, their importance has grown higher. With regard to this, the better
an organisation knows its customers, the better is its profit and revenue. For instance, if the
company understand their customer better they can effectively draft strategies and
promotional campaigns to attract and retain prospective customers in a better way. This
competitive era also required an organisation to be more customer-oriented as serving them
in a customized way can help them in retaining them longer (Angelova & Zekiri, 2011).
Hence, Customer engagement has become a key area for organisations due to the rising
competition and complex business microenvironment.
• Employees – The driver of business performance and productivity is connected with
the performance of employees. Considering the researches of many scholars and academics,
it is also ascertained that HR also plays a key role in business success. Many successful
organisations have excellent HR policies that offer best training and salary to their staffs and
also motivate them to successfully attain the business goals (Farndale, Scullion & Sparrow,
2010). This is the reason why most of the organisations focus on retaining and attracting the
best talent.

MANAGEMENT 3
• Suppliers and distribution channels – If business wants to effectively deliver their
products and services to the consumers, it is important for them to manage their supply chain
and distribution channels with the objective to reduce costs and enhance efficiency. Saving
cost in supply chain helps the organisation to gain competitive edge in the market as they can
transfer this benefit to the consumers by offering products at affordable prices (Bayraktar et
al, 2009). Moreover, it also enhances operational efficiency and thus helps the business to
earn more profits. In this dynamic and competitive environment, customer service also plays
a key role and it is significant for the business corporation to be in customer easy reach if
they want their business to expand at more places.
• Competitors – In this global modern business, there is competition in every industry
that significantly impacts business profits. More the number of competitors, lower an
organisation market share. To gain competitive edge, every enterprise needs to differentiate
itself from others to attract number of customers (Porter, 2018). In addition, this competitive
pressure also induces businesses to constantly update their marketing and business strategies.
• Investors and Shareholders – These are considered to be internal stakeholders for
any businesses. One of the key objectives of any business is also concern with building of
shareholder value. Shareholders and investors help in the growth of business and expect
returns on the investment (Luo et al, 2015). Hence, it is the major responsibility of any
business to keep the investor happy.
The organisation functions operates in larger environment context and it is surrounded
by many specific factors having significant influence over it. It is related with the macro
environment that brings various opportunities for any business firm, but also pose threat to
the corporation. Macro environment in business context includes six forces i.e. – economic
forces, demographic forces, socio-cultural forces, technological forces, ecological forces and
political forces. All these forces are briefly outlined below,
• Demographic forces – there are diverse market segments that are usually influenced
by common demographic factors. The diverse and large demographics both offer
opportunities and challenges to the business mainly in the phase of rapid world population
growth (Beechler & Woodward, 2009). It also demands a need for adjusted marketing
strategies. These macro environment factors possess many sorts of characteristics such as
density, growth, size, structure, gender and so on.