Analyzing the Business Environment: A Study of Micro and Macro Factors

Desklib provides past papers and solved assignments for students. This essay analyzes the business environment.

CONTEXT OF BUSINESS
Page | 1

Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conclusion.......................................................................................................................................6
References........................................................................................................................................7
Page | 2

Introduction
In order to maintain the social trend of a country, business plays a vital role in modification of
the industry needs. To identify the growth of the business, microenvironment and macro
environment analysis is also essential. In 21st century concept of management transformation
such as organizing, planning, directing, controlling, dealing with staff is an essential technique.
The main purpose of the essay is to understand the static and dynamic business environment and
identify the requirements of an individual as well as organization. The study also includes the
important of business ethics and managing responsibility. The study will also help to understand
the management theories and modification in the business environment.
Discussion
In order to enhance the business operation, industrial factors would help to smoothen the
progress of an organization to manage their functions. Through macro and micro environmental
analysis, business is able to evaluate current market trends.
Micro Environment Analysis
Micro environmental analysis includes employees, customers, suppliers, or distribution channels.
For a business, it is important to gather feedback from the customers and suppliers regarding the
delivery of their product and services (Ramadani et al., 2017). This may facilitate an
organization to know the requirements of the retailers and customers. Therefore, this
may become easier for an organization to cater service accordingly. From the above study, it can
be analysed that micro and macro environment analysis helps to find out the strength,
opportunity and the threat of the company.
Impact of factors on business environment:
Customers: By conducting micro environmental analysis, an organization is able to know about
its social position in the market. It is necessary for a business to know preferences and desires of
the customers. This may facilitate an organization to create higher income and maximize their
revenue. Being customer-oriented, the most important liability of the management is to take care
of the requirements of the customers. This may make easy for the business to start with new era
Page | 3

of modernization and it will help them to expand their business. In addition to this, it is necessary
for the management of a corporation to look after the clients. This can be enhanced with the
support of customer feedback; they can solve and modify their problems and develop their
work ethics (Demil et al., 2015). In order to maintain the customer client relationship,
organization needs to provide important value to their customers. This may aid the business to
expand their activities in the global aspects.
Marketing and Supplier: suppliers provide a vivid ideology about different distribution
channels that are required to be used for delivering products and services to customers. In order
to maintain continues supply of products business organization uses marketing. Right way of
advertising the product helps to maintain the social status of the product as well as business.
Employees: Employees are direct drivers of modification that will lead to creativeness. Hence, it
can be said that creativity leads to innovation. Implementation of indigenous
ideas will facilitate the organization to boost up their productivity.
Macro Analysis
It is essential to analyse about the political, social, environmental, legal, technological, economic
factors that enables an organisation to evaluate factors that might contribute towards their global
expansion (Martelli and Greener, 2018). The factors will also help to find out the strength,
threats, opportunities and weakness of the organization.
Political factors: In order to maintain the stability, political factors play an important role. Law
and justice must be reliable for the company. it also enhance the future opportunity for the
expanding of the business.
Economic Factors: economic factors such as laws and justice create an impact on the business
environment. These factors are useful for an organisation to explore opportunities that can help
balance requirements of the business like accessibility of capital and availability of resources.
Social Factors: The major population of the country must accept the product or the service. It
will also enhance the selling of the products or services. By considering this factor, this provides
Page | 4

a wide scope for an organisation to understand the variation of the taste and preferences of the
customers and accordingly deliver their products and services.
Technological Factors: By adapting new technologies, organization can enhance the product
quality as well as number of production. Technological growth such as automation reduces the
work force. For instance, businesses can implement Total Quality Management and ISO 9000 to
underpin the effectiveness of maintaining the quality of the products and services.
The above study also helps to understand the overall status and the factors required to be
considered during global expansion of an organization. In order to maintain organization’s status
it also be recommended that organization needs to adopt several business techniques and tools.
Ethical problems in business and responsibilities of organization
Managing responsibilities: It is required to know social aspects of an external environmental
analysis. Furthermore, it is also necessary to ensure that the staffs are working together. It is also
necessary to ensure about collaboration among the employees. This can help the management of
an organisation to reach heights of success.
Sustainability- “Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their own needs” (Geppert et al.,
2016). Apart from this, the economic wavering creates an impact in the variation of growth of an
organization. This may also help to weigh up plan of product and services of the firm.
Behavioral ethics- Ethics play an immense role in business events. Business operations and
individual are internally connected with each other. There should be correct maintenance of
ethics and confidentiality. There should be correct implementation of principles of legislations
like Protection Act 1997; this may aid an organization to know the need of identifying their
strength and weaknesses. It is also helpful for boosting up the work culture at intervals the
organization. These applied factors and techniques may help to expand the business in future.
In 21st century concept of the management transformation such as organizing, planning,
directing, controlling, dealing with staff is an essential technique (Wilton, 2016). In order to
maintain the work ethics it is important to manage the employee with a tactical planning. This
Page | 5

will also enhance the self-growth and individual performance level along with global success
(Budhwa and Mellahi, 2016). To avoid the power distance it is also require enhancing the power
distance of an organization in respect of low-level authority and high-level authority. Decision-
making capabilities also increase the work ethics. The above stated factors are required to be
adhered with accomplishing organisational goals. This can help a business to expand itself on
global platform.
Conclusion
From the above study, it can be said that the micro and macro environment analysis helps to find
out the strength, opportunity and the threat of the company. It also manages the management
activities such as decision-making, organizing, management ethics and leadership. The above
study also helps to understand the social status of an organization. In order to maintain
organization’s status it also be suggested that organization needs to adopt several business
techniques and tools.
Page | 6

References
Budhwar, P.S. and Mellahi, K., 2016. The Middle East context: an introduction. In Handbook of
Human Resource Management in the Middle East. Edward Elgar Publishing.
Demil, B., Lecocq, X., Ricart, J.E. and Zott, C., 2015. Introduction to the SEJ special issue on
business models: business models within the domain of strategic entrepreneurship. Strategic
Entrepreneurship Journal, 9(1), pp.1-11.
Geppert, M., Matten, D. and Williams, K. eds., 2016. Challenges for European management in a
global context: Experiences from Britain and Germany. Springer.
Janich, N., 2017. 3 Genres in the business context: An introduction. Handbook of Business
Communication: Linguistic Approaches, 13, p.41.
Koporcic, N., Ivanova-Gongne, M., Nyström, A.G. and Törnroos, J.Å. eds., 2018. Developing
Insights on Branding in the B2B Context: Case Studies from Business Practice. Emerald
Publishing Limited.
Martelli, J. and Greener, S., 2018. An introduction to Business Research Methods.
Ramadani, V., Dana, L.P., Gërguri-Rashiti, S. and Ratten, V., 2017. An introduction to
entrepreneurship and management in an Islamic context. In Entrepreneurship and Management
in an Islamic Context (pp. 1-5). Springer, Cham.
Wilton, N., 2016. An introduction to human resource management. Sage.
Page | 7