Analysis of Business Environment: Macro Factors and Operations

This report examines the multifaceted impact of the macro environment on business operations. It begins by exploring the positive and negative influences of external factors, such as political, economic, social, technological, environmental, and legal aspects, on organizational stability and strategic planning. The core of the report focuses on the PESTLE model, providing a detailed analysis of how each factor affects a business's decision-making processes. The report underscores the interplay between these macro factors and a company's strengths and weaknesses, ultimately affecting the achievement of its objectives. It also highlights the implications of both micro and macro factors on organizational operations and decision-making. The report concludes by emphasizing the importance of adapting to the changing external environment for sustained business success, with references to key literature supporting the analysis.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1- Positive and negative impact of macro environment on the business operations...........1
1.2- PESTLE model to understand the macro environment of organisation..........................2
CONCLUSION ...............................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
There are many positive and negative impacts of macro environment on the business
operations. In this report the PESTLE model to know the macro environment of the organisation
is discussed. There are internal and external factors for the organisation that affect the strength
and weakness of the company and these strengths and weaknesses interrelate with external
macro factors of the business environment(Klapper, and Parker, 2010.). SWOT/TOWS influence
on the decision making of the organisation will be discussed. Impacts of micro and macro factors
on the business objectives and decision- making on the organisation will also be studied.
TASK 1
1.1- Positive and negative impact of macro environment on the business operations.
There are many positive and negative impacts that macro environment has on the
business operations. Macro environment of the business consists of the external factors that have
uncontrollable effect on the business operations of an organisation. The external factors can be
political, economic, technological, social, environmental and legal(Hazlina Ahmad, Ramayah,
Wilson and Kummerow, 2010.). An organisation should be prepared to handle these factors to
make the company stable at these times. New strategies and plans should be implemented to
cope with the negative impacts of macro environment. Positive impacts of macro environment
are:
 Favourable conditions in the political environment of the business will have the positive
impact on the organisation.
 Certain economy of the country will bring positive effect the business of the organisation.
 Fulfilling social responsibilities of the organisation will bring the positive impact on the
business operations of the company.
 Being updated with the latest technology in the market will work in the betterment of the
organisation and efficient working of the business operations.
 Favourable environment conditions for the working of organisation will positively impact
the business operations.
 Changes in legislations of the country which are good for the working of the organisation
will also bring the positive impact on the business operations.
Negative impacts of macro environment are:
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 Changes in the political environment which are made by the government for the welfare
of company just like free trade policy will negatively affect the organisation if the
company is not strong to handle the situations.
 Uncertain economy of the country will bring negative impact on the business operations
of the organisation.
 Taste and preferences of the customers regularly changes which can have negative effect
on the organisation's business operations.
 Environment is degrading day by day so many voluntary sectors that work in these
directions are forcing the organisations to use environment friendly way in business
operations of the companies(Czinkota, Ronkainen, and Moffett, 2011). This can bring
the negative impact on the organisational operations of business.
 Resistance to change the technologies used can also negatively affect the business
operations of the organisation.
 There are many changes that are being made in the legislations of the country and
unfavourable changes can bring negative impact on business operations of the
organisation.
1.2- PESTLE model to understand the macro environment of organisation.
 Political factors- These are the factors which are brought by the government in support of
welfare of the public. Tesco needs to be updated with all new rules and regulations which
are brought by the political factors of the country.
 Economic factors- Economy of the country is uncertain, predictions for the future
economy cannot be done with reference to the present economic conditions. Tesco uses
its strength to overcome this uncertain economy.
 Social factors- Taste and preferences of the customers changes rapidly. Tesco works
according to the customers and makes them satisfied(Armstrong, Kotler, Harker, and
Brennan, 2015.). The company offers the products that are needed by the customers.
 Technological factors- There are many new technologies coming in the market. Tesco
keeps itself known with the technologies of the market and uses them in the business of
the organisation.
 Legal factors- Changes in the field of legislations of the country comes under the legal
factors of the macro environment. Tesco needs to know all new rules and regulations that
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are being made and implement them in the business operations of the company as early
as possible.
 Environmental factors- World is now more concerned for the environment that is
deteriorating. Tesco uses environment friendly ways in the business operations of the
company to protect the environment.
CONCLUSION
There is a relationship between external macro factors and strengths and weaknesses of
the company. These strengths and weaknesses also affect the decision making and achievement
of organisational objectives. Micro and macro factors both have various impacts on the working
of an organisation.
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REFERENCES
Books and journals:
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Björklund, M., 2011. Influence from the business environment on environmental purchasing—
Drivers and hinders of purchasing green transportation services. Journal of Purchasing and
Supply Management, 17(1), pp.11-22.
Czinkota, M., Ronkainen, I. A. and Moffett, M. H., 2011. International business. Wiley.
Hazlina Ahmad, N., Ramayah, T., Wilson, C. and Kummerow, L., 2010. Is entrepreneurial
competency and business success relationship contingent upon business environment? A
study of Malaysian SMEs. International Journal of Entrepreneurial Behavior & Research,
16(3), pp.182-203.
Iskanius, P., Page, T. and Anbuudayasankar, S. P., 2010. The traditional industry sector in the
changing business environment–a case study of the Finnish steel product industry.
International Journal of Electronic Customer Relationship Management, 4(4), pp.395-414.
Klapper, L. F. and Parker, S. C., 2010. Gender and the business environment for new firm
creation. The World Bank Research Observer, 26(2), pp.237-257.
Klapper, L., Lewin, A. and Delgado, J. M. Q., 2011. The impact of the business environment on
the business creation process. In Entrepreneurship and Economic Development (pp. 108-
123). Palgrave Macmillan UK.
Pulver, S., 2012. Business and the Environment.
Xue, X., Shen, Q. and Ren, Z., 2010. Critical review of collaborative working in construction
projects: Business environment and human behaviors. Journal of Management in
Engineering, 26(4), pp.196-208.
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