Context of Business: Macro and Micro Environmental Factors

This report provides a comprehensive analysis of the context of business, focusing on the interplay of macro and micro environmental factors. It delves into how these factors, including political, economic, social, and technological influences, shape the operations and strategies of modern businesses. The report examines the micro-environmental aspects such as competitors, customers, and suppliers and their impact on business performance. It also explores the importance of ethical and social responsibility within the external environment, emphasizing the need for businesses to fulfill their obligations to society. The conclusion summarizes the key findings, highlighting the significance of understanding the external business environment for success. This report, prepared for a BABS Foundation Level course, provides valuable insights into the dynamic nature of the business world.

Context Of Business

Table of Contents
Introduction......................................................................................................................................1
Main Body.......................................................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

Introduction
Global environment is defined as segregation of micro as well as macro environmental
factors that creates a major influence on modern businesses. The activities in which products or
services are exchanged with money is referred to as business (Anıl and Ficici, 2017). Rationale
behind this is to earn profit. This report comprises of macro and micro environmental factors that
has created alterations within the ways modern business operate their services in global
environment. Along with this, it also contains rationale behind organisations and individuals
behaving socially, ethically and responsibly within the external environment.
Main Body
Within rapidly evolving as well as competitive world, modern business is influenced by
ample number of factors that prevail in environment where these entities furnish there services.
This comprises components which can be controlled by management of firm and also those that
might not be controllable as well as are confined to authorities & power of business. The factors
which can be controlled are denoted by micro environmental while the one which are
uncontrollable are referred to macro environmental factors. Within the global environment,
aggregation of these factors creates impact on modern business and might result within
alterations in operations and functions that are being carried out by an enterprise. These factors
are illustrated here in context of global environment. Micro environment factors affect the
working of modern business depending on their capacity, capabilities, strategies and size that
may or may not be handled. These comprises of certain factors they are illustrated beneath.
Competitors, within competitive environment, modern business possess certain basic
things which firms have to take into consideration while rendering their services. Within the
corporate world, organisation faces competition from various firms those have affirmative brand
image as well as possess higher stake within marketplace (Burayidi, 2013). For an instance,
APPLE faces a high competition from Microsoft, Dell, Lenova and hp. Such kind of brand
rivalry persuades modern businesses for adopting to unique as well as creative strategies which
will provide them competitive edge among their rivals who render their services in same sector.
Customers are the important entities which are present within global market environment who
strives for earning profit via accomplishment of preferences, demands and needs of individuals.
Firms now formulate the strategies by which they can carry have profitable sales rather than just
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increasing the volumes of their sales. Modern firms like ASDA, Samsung, General Motors, etc.
Carry out tehri marketing activities for building up an effectual contact and create an impact on
the ways services are purchased by their probable customers. Entities emphasise on delivery of
such services and products which will enable them to gain satisfaction of their customers.
Suppliers are the business entities that functions like a part of modern economy for
procurement or services or materials from vendors (Warkentin, Sugumaran and Sainsbury,
2012). They can be either business houses or even individuals which furnish firms with relevant
resources which are required by modern businesses for rendering their day to day activities in
efficient as well as efficacious manner. Now firms look probable suppliers and analyse them
with respect to industry. Along with this, they will choose the one will be delivering enhanced
sservices in terms of quality, warranties and cost. The contnious development will lead them to
create a relevant influence on operations as well as functions of organisation.
Macro environmental factors have significant impact on companies performance
(charfeddine, 2016). Some key elements of macro environment are political, economical, social,
technological etc. Herein, below some key factors are mentioned along with its impact on
companies performance: Political factor can be defined as a type of factor which consists
detailed information regards to political relation of a nation with other countries, government
rules & regulations etc. Eventually, it is essential for companies to comply their strategies and
functions in accordance of political conditions. For example, this can be beneficial for companies
if a nation's political relationship is good with rest of countries. It is so because due to this
companies can expand their operations and activities across the nation. On the other hand, in the
case when relation of United Kingdom is not better with rest of countries then this can be
difficult for companies of UK to access in other countries due to poor political relations. In
addition, business entities may face difficulties if they enter in new market of any country.
Economical factor comprises of various kinds of elements are included which are related
to market of any country. In this, vital range of rates such as interest rate, exchange rate,
inflation-deflation rate etc. are included. Any variation in these rates can affect companies'
performance. This is so because if interest gets down then it becomes easier for business entities
to acquire funds easily at lower cost as well as they become able to expand their operations
(Hacioglu, Dincer and Celik, 2012). On the other side, if interest rate fluctuates and goes higher
then companies can not get funds at lower cost. In addition, if exchange rate of a country
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fluctuates continuously then companies of that nation can not make international trade with ease.
It is so because they may face lots of issues such as higher transaction cost of currency of one
nation to another.
Reason for which companies should fulfil their responsibility towards society, business
entities exist in the environment and get basic services from various sources. Hence, it becomes
essential for companies to complete responsibility towards society and general public
(Vasilcovschi and Georgescu, 2012). For this purpose business entities should implement
corporate social responsibility model. According to this model, companies must provide job
opportunities for general public who are capable as well should offer better products and services
at lower cost. Along with they should pay their responsibilities towards employees by offering
better and safe working environment.
Conclusion
On the basis of above project report it has been concluded that external business
environment includes various kinds of factors that affect to companies performance in both
positive and negative manner. In addition, it can be articulated that this is the responsibility of
companies to fulfil own responsibilities towards various aspects of society and public.
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References
Books & Journals
Anıl, A. R. and Ficici, A., 2017. The Emerging Market Manufacturing Business Groups
(EMBGs) and the Interplay between Innovation in Environmental Sustainability,
Digitalization, Internationalization and Corporate Governance Structures: The Case of
Turkish Holding Companies. Turkish Economic Review. 4(1). pp.55-65.
Burayidi, M. A., 2013. Downtowns: Revitalizing the centers of small urban communities.
Routledge.
Charfeddine, O. B., 2016. Business environment-aware management of service-based business
processes (Doctoral dissertation, Université Paris-Saclay).
Hacioglu, U., Dincer, H. and Celik, I. E., 2012. Economic approach to conflict issue: Investment
in post-conflict situation for international business. International Journal of Business
Administration. 3(5). p.1.
Vasilcovschi, N. and Georgescu, S., 2012. TRANSFORMATIONAL LEADERSHIP AND THE
ECONOMIC COMPETITIVENESS IN SHIPPING INDUSTRY TODAY. Analele
Universitatii Maritime Constanta. 13(17).
Warkentin, M., Sugumaran, V. and Sainsbury, R., 2012. The role of intelligent agents and data
mining in electronic partnership management. Expert Systems with Applications.
39(18). pp.13277-13288
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