Analysis of Micro and Macro Environmental Factors in Global Business

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GLOBAL BUSINESS ENVIRONMENT
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GLOBAL BUSINESS ENVIRONMENT
Table of Contents
Introduction......................................................................................................................................3
Micro and Macro-Environmental Factors Changing Nature of Modern Business..........................3
Maintaining Responsibility, Sustainability, and Ethicality.............................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
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Introduction
In the modern age of globalization, the realm of business has significantly developed &
improved itself and has found various ways through which the industries and organisations
would be able to gain benefits. This is mostly due to the dynamic and rapid advancement and
availability of technology, which are being incorporated in the different businesses, which have
allowed them to go global. However, in the global business environment, the importance of
ethics, as well as corporate social responsibility, holds unprecedented importance. As such, the
following study aims to evaluate the micro and macro environmental factors that affect the
nature of modern business as well as the importance of maintaining responsibility, sustainability,
and ethicality in the business.
Micro and Macro-Environmental Factors Changing Nature of Modern Business
There are many micro and macro environmental factors, which has changed the nature of
modern business in a global environment.
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Figure 1: Micro and Macro-Environmental Factors
(Source: Philipov, Liefbroer, and Klobas, 2015)
Micro Factors
Suppliers
The suppliers for any organisation are the key to the success of the latter. As opined by Drawve,
Thomas, and Walker (2016), the importance of the product or material supplied by the suppliers
are of immense importance to the product or services manufactured by the organisation.
However, if the supplier is the largest supplier of their goods, then they can control the success
of the organisation.
Customers
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The customers’ classification such as the B2B, B2C, Local, and International as well as their
justification for purchasing the products and services of the company plays a massive role in the
modification of the nature of modern business in the global environment.
Dealers
The distributors, as well as the dealers who act as a 3rd party for the company, impacts the nature
of modern business in the global environment and this is based upon their reputation in the
market. As pointed out by Belon et al. (2016), if the distributors or the dealers have a good
reputation in the market, then the organisation would have an increased sale in the market,
however, the converse can affect the sales and revenue generation of the organisation.
Public
The perception of the public that forms the image of the organisations heavily affects the nature
of the organisations. As opined by Ghezzi, Cortimiglia, and Frank (2015), if the public perceives
the company in a positive manner, then the company can gain success. However, if the public
perceives the company in a negative manner, then the company would face issues in achieving
its goals and objectives.
Macro Factors
Economy
For an organisation, the economy of the country heavily affects the production of the
organisation as well as the decision-making process of the consumers. If the economy is
developed, then the organisation faces heavy benefits, however, if the economy is under-
developed or under turmoil, then it can cause issues for the organisation.
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Political Factors
The political condition of the market in which the organisation is operating has a profound
impact on the nature of the business in a global environment. As opined by Indris, and Primiana
(2015), if the political condition of the country is stable, then the organisation would be easily
able to gain benefits. However, if there were political instability as well as war, then the
organisation would face heavy issues.
Social Factors
The societal aspects of the country are able to influence the business of the organisation. If the
needs of society were being met with the products and services of the organisation, then the
organisation would be easily able to gain benefits. Conversely, if the needs of the society were
not being met with the products and services of the organisation, then the organisation would
face heavy issues.
Technological Factors
The technology used in the organisation in the country influences the business of the
organisation. If advanced technology were used, then the organisation would gain benefits.
However, if the technology would be outdated, then the organisation would face issues (Akhtar
et al., 2018).
Maintaining Responsibility, Sustainability, and Ethicality
Social Issues
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Various social issues can occur for a modern organisation in the global business environment. In
order to mitigate the issues, both the organisation as well as the individuals should try to behave
ethically as well as manage themselves in a responsible and sustainable manner. This would
allow them to mitigate the social issues faced by the organisation (Grayson and Hodges, 2017).
Cultural Issues
Cultural issues such as lack of compliance with the culture of the country and many more can
cause issues for any modern organisation in the global business environment. In this case, the
organisations should try to comply with the cultural rules and laws of the country as well as
provide them with products and services to meet their needs. The individuals should try to be
ethical with the organisation and support them if the organisation is focusing on helping the
people.
Economic Issues
Economic issues such as economic turmoil as well as economic undergrowth can cause issues for
any modern organisation in the global business environment. As such, the organisation should
try to manage them in a responsible and sustainable manner by formulating new strategies and
plan to survive and thrive in the economy (Schaltegger, Hansen, and Lüdeke-Freund, 2016).
Environmental Issues
Environmental issues can heavily affect any modern organisation in the global business
environment. In order to tackle this, the organisation should try to comply with the
environmental laws and regulations of the country. This would help to sustain them in the
country and mitigate environmental issues (Schaltegger and Burritt, 2017).
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Conclusion
The above-written study critically analyses and evaluates the micro and macro environmental
factors that affect the nature of modern business as well as the importance of maintaining
responsibility, sustainability, and ethicality in the business. From the study, it has been found that
suppliers, customers, dealers, and the public are the micro-environmental factors affecting the
business. However, the economy, political factors, social factors, and technological aspects are
the macro environmental factors influencing the business of a global organisation. The study
analyses the ways through which the individuals and the organisation would be managed
responsibly and sustainably. This is done to behave ethically with respect to social, cultural,
economic and environmental issues.
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References
Akhtar, P., Khan, Z., Frynas, J.G., Tse, Y.K. and Rao‐Nicholson, R., 2018. Essential micro‐
foundations for contemporary business operations: Top management tangible competencies,
relationship‐based business networks and environmental sustainability. British Journal of
Management, 29(1), pp.43-62.
Belon, A.P., Nieuwendyk, L.M., Vallianatos, H. and Nykiforuk, C.I., 2016. Perceived
community environmental influences on eating behaviors: A Photovoice analysis. Social Science
& Medicine, 171, pp.18-29.
Drawve, G., Thomas, S.A. and Walker, J.T., 2016. Bringing the physical environment back into
neighborhood research: The utility of RTM for developing an aggregate neighborhood risk of
crime measure. Journal of Criminal Justice, 44, pp.21-29.
Ghezzi, A., Cortimiglia, M.N. and Frank, A.G., 2015. Strategy and business model design in
dynamic telecommunications industries: A study on Italian mobile network
operators. Technological Forecasting and Social Change, 90, pp.346-354.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge.
Indris, S. and Primiana, I., 2015. Internal and external environment analysis on the performance
of small and medium industries (SMEs) in Indonesia. International journal of scientific &
technology research, 4(4), pp.188-198.
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Philipov, D., Liefbroer, A.C. and Klobas, J.E. eds., 2015. Reproductive decision-making in a
macro-micro perspective. Dordrecht: Springer Netherlands.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Schaltegger, S., Hansen, E.G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
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