How Macro Environmental Changes Affects Business?


2 Answers

Anonymous Profile
Anonymous answered
Macro environment changes include political change, social change, environmental changes, legal changes,Technological changes and economical changes. These all have major affect on businesses and these changes out of business control. So anything that change in macro environment businesses need to respond in order to stay competitive.
The following is example:

Political factors: Government policies may made change difficult to implement in the organisations.  For example, if a government decide to reduce entry barriers to market then organisations may face competition from global firm by entering to market.

Economical factors: These factors include taxation changes, economic growth, interest rate and exchange rates. If any of these factors change may have major impacts on organisations and organisations have to respond to these changes in order to stay in business.

Social factors: Changes in social trends may affect demand for the companies’ products. For example, in  UK more people are concern about healthy eating and so companies such as Burger king and McDonald need to respond to these changes by introduce new healthy products rang.

Environment factors: Changes in environment factors may have affect on significant amount of companies because of global warming. Organisations may be required by law to respond to this change by make their products environmental friendly and this issue may make change difficult to implement because it may affect demand for products of the company. Making products environmental friendly may required company to replace a nice plastic packaging with a poor quality paper and customers may see this as reduces product quality and this may be very challenging for organisations to do.

Legal factors: Every organisation required to comply with laws and legislations. Any organisation avoids the law and legislation may result in panties.
amber Jhon Profile
amber Jhon answered
Macro environmental factors usually include inflation, unemployment, literacy, energy consumption, population, GDP growth etc. Almost all of the Macro environmental factors affect businesses. I will explain it with some examples. Demographics and the size of population can always impact the businesses like the companies which operate in the region of large population have more opportunities to expand their businesses(as more target customers). Similarly, with the increase in the inflation, the prices of the raw materials increase and companies have to increase the prices of the finished goods. Furthermore, if there is high literacy in the economy then the company finds it more convenient to find skilled and literate people. This means that Macro environmental factors can impact the activities of the businesses both positively as well as negatively.

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