Micro and Macro Factors in Business Environment Essay

This essay delves into the dynamic interplay of micro and macro environmental factors that shape the contemporary business landscape. It meticulously examines how customer needs, supply chains, and competitor strategies (micro factors) intertwine with broader external influences like political stability, social trends, economic conditions, technological advancements, environmental concerns, and legal frameworks (macro factors). The essay further emphasizes the critical role of ethical considerations and sustainability practices in navigating the complexities of the global market. It underscores how businesses must integrate ethical principles and sustainable strategies to foster brand value, secure customer loyalty, and address pressing environmental challenges. The discussion highlights the interconnectedness of these factors, demonstrating that businesses must adopt a holistic approach to achieve long-term success and profitability in an increasingly competitive and ethically conscious world. The essay concludes by reiterating the importance of ethical and sustainable practices for global business expansion and success.

Individual essay context of
business

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
Micro and macro environmental factors affecting the nature of business ......................................1
Need of ethics and sustainability in addressing business issues .....................................................2
CONCLUSION ...............................................................................................................................3
REFERENCES ...............................................................................................................................4

INTRODUCTION
The advanced technological developments have completely changed the global business
environment. However, compare to business in local environmental global business experiences
more challenges in managing macro and micro factors. Along with these aspects ethical
considerations and sustainability also influences the business development strategies (Bloom and
et.al., 2018). The study will discuss several actors which influences the nature and performance
of business activities. It will also evaluate the importance and necessity of sustainable and ethical
practices in securing position in extremely competitive and changing global market.
Micro and macro environmental factors affecting the nature of business
Business and operational strategies are influenced by several factors. These factors can be
classified as micro and macro environment factors. Their impact on the business environment is
as follows:
Micro factors:
These factors can be defined as the attributes which are related to immediate operational
and strategic decisions of the organisation. Micro factors includes:
Customers: The products and nature of services as well as marketing approaches are defined as
per the needs of customers (Cascio, 2017). Especially in global market where huge cultural and
behavioural diversity is present it is hard for the companies to meet the expectations of their
consumers.
Supply and distribution channel: Within global market to sustain the position companies must
develop effective distribution channels so that on time delivery of their products is possible. For
long term customer retention and success this factor is vital. A minor error or negligence in this
aspect can lead organisation into trouble.
Competitors: The business strategies are also influenced by the competitors. For the global
business it is challenging predicting the strengths and weakness of local as well as other foreign
competitors. Failure to predict this can cause organisation loss of customer base and profits
(Patil, Mittal and Jatav, 2016).
Macro factors:
Macro factors or the external factors are known as the aspects which have key impact on
the business but are usually uncontrollable.
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Political: These factors influences the economic growth as well as the smooth functioning of
business. Political aspects are closely related to the legal considerations of the market (Xie,
Chen and Wu, 2016). A stable political environment also have positive impact on the buying
decisions of customers. Thus, before entering into any global market companies always assures
that they have political support or stability.
Social: For succeeding in the global as well as domestic market businesses must analyse the
social structure and needs so that they can provide services accordingly.
Economic: Global organisations and their investment is greatly affected by the economic
stability. It can force them to change their operational costs as well as profit margins.
Technological: This has been key factor which has allowed the huge global expansion of the
business (Schuetz,Mair and Schrefl, 2018). However, companies must be prepared to also
consider the security threats related to technology so that their operations are not hindered.
Environment: Nations are paying more attention to sustainability and thus before expanding the
business companies are required to assure that their activities are favourable to environment. The
negligence to this aspect can cause legal penalties. The lack of unsustainable practices are also
not encouraged by the people. Thus, for establishing a responsible and ethical service providers
business organisations used to consider environment factors such as recyling, waste reduction
and other sustainable approaches.
Legal: From the global perspective this can be one of the complex factor. Since each economy
have different legal framework it is necessary for the to assure that their functions are in
compliance with the legal regulations of the region. Legal factors affects operational methods,
employment conditions and terms, taxation policies as well as other trade regulations (Graham,
2018).
Need of ethics and sustainability in addressing business issues
Ethics are defined as the principles which govern or regulate the actions and behaviour of
an individual or organisation so that right and inappropriate concepts can be distinguished. Along
with the profitability ethical aspects are also important for organisations to address the various
issues (Alfaro, 2016). For instance the environment degradation due excessive industrialisation
and utilisation o resources has created threat on the earth. Thus, as an ethical responsibility
companies are moving towards the sustainability concept. Sustainability establishes a balance
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between environment and development so that development is not accomplished at the cost of
environment damage.
Similarly, in order to establish strong brand value and customer support in global market
business organisations also consider social and culture issues into account (Mežinska, Lapiņa
and Mazais, 2015). For example if the services or the promotional methods of company are not
as per the culture of their operational region then there is the least possibility that people will
favour the organisation. Hence, in order to have better understanding of customer preferences
business must understand the cultural and Social aspect. Organisations must take their decisions
with care as they have responsibility towards society as well as their stakeholders.
It is the ethical duty of the organisation to assure that their products are safe for the
people as well as for environment. Without this consideration environment issues will not be
resolved by the organisation and it can lead to financial penalties or dissatisfaction among
customers (Crane and Matten, 2016). It has been also analysed that when organisations are
highly active in their corporate social and environment responsibility then people perceives
companies as responsible and good. Thus, the brand value and customer retention are also
improved by ethical approaches (Baumgartner and Rauter, 2017).
CONCLUSION
From the above discussion it is concluded that ethics and sustainability have become
essential ingredients in the global expansion of the business services. Thus, with changing global
and modern business strategies companies are also approaching towards sustainable practices. It
has been also analysed from the above discussion that in global context companies cannot
achieve success without understanding the domestic market as well as other social and political
aspect of the region. It can also be concluded that without evaluation and analysis of above
discussed factors modern businesses cannot meet their profitability goals.
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REFERENCES
Books and Journals
Alfaro, L., 2016. Gains from foreign direct investment: Macro and micro approaches. The World
Bank Economic Review. 30(Supplement_1). pp.S2-S15.
Baumgartner, R.J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production. 140.
pp.81-92.
Bloom, N. and et.al., 2018. Really uncertain business cycles. Econometrica. 86(3). pp.1031-
1065.
Cascio, W.F., 2017. Training trends: Macro, micro, and policy issues. Human Resource
Management Review.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Graham, D., 2018. PESTEL factors for e-learning revisited: The 4Es of tutoring for value added
learning. E-Learning and Digital Media. 15(1). pp.17-35.
Mežinska, I., Lapiņa, I. and Mazais, J., 2015. Integrated management systems towards
sustainable and socially responsible organisation. Total Quality Management & Business
Excellence.26(5-6). pp.469-481.
Patil, A., Mittal, A. and Jatav, S., 2016. Factors Affecting Customer Satisfaction in Social
Marketing–An Empirical Study. Management Today. 6(3). pp.110-117.
Schuetz, C.G., Mair, E. and Schrefl, M., 2018, October. PESTEL Modeler: Strategy Analysis
Using MetaEdit+, iStar 2.0, and Semantic Technologies. In 2018 IEEE 22nd
International Enterprise Distributed Object Computing Workshop (EDOCW) (pp. 216-
219). IEEE.
Xie, K.L., Chen, C. and Wu, S., 2016. Online consumer review factors affecting offline hotel
popularity: evidence from tripadvisor. Journal of Travel & Tourism Marketing. 33(2).
pp.211-223.
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