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Tuesday, 3 November 2020

What is elements of macro environment

 The macro-environment is a part of the external environment that is largely external to the enterprise thus, beyond the direct influence and control of the organization but which experts powerful influence over its functioning. The external environment of the enterprises consists of individuals groups agencies and organizations events common conditions and forces with which the organization comes into frequent contact in the course of its functioning. It stabilizes interacting and interdependent relations conduct transactions designs and administers appropriate strategies and policies to cope with fluctuations therein and otherwise its way into the future.

Demographic environment:

the term demographics denote statistics of population in an area district, country, or in the world. It includes factors such as race age income educational attainment asset ownership of homeownership, employment status and location.data with respect to these factors within a demographic variable and across households are of interest to a businessman in addition to economists.marketers and other social scientists of ten group population into categories based on demographic variables.

Some of the demographic factors have great impact on the business fullstop factors such as general age profile sex ratio, education growth rate affect the business with different magnitude. India has relatively younger population as compared to some other countries. China on the other hand is having and aging population.many multinational are interested in India considering its population size. With having approximately 16% of the world's population common the country hold huge potential for overseas companies.

Economic environment:

economic environment refers to the nature and direction of the company in which a company completes or make complete. It includes general economic situation in the region and the nation conditions in resource markets man money material machine method which influence the supply of points to the enterprise their costs quality availability and reliability of supplies. economic environment determines the strength and size of the market. The purchasing power in an economy depends on current income comprises savings circulation of money full depth and credit availability. Income distribution pattern determines the marketing possibilities. The important point to consider is to find out the effect of economic prospect and inflation on the operation of the firms.

Political and legal environment:this is partly general to all similar enterprises and partly specific to an individual enterprise. It includes such factors as the general state of political development the degree of politicizationof business and economic issues, the level of political morality, the law and order situation, political stability and the political ideology and practices of the ruling party, the proposed fullness and efficiency of governmental agencies, the extent and nature of the governmental intervention in the economic and the industry government policies specific legal enactments and framework in which enterprises has the function and the degree of effectiveness with which they are implemented at, public attitude towards business in general and enterprise in particular and so on.

There are three important elements in political and legal environment.

1. Government:

business is highly guided and control by government policies. Hence the type of government running a country is a powerful influence on business:a business has to consider the changes in the regulatory framework and their impact on the business.taxes and duties are other critical area that may be divide and effect the business. For example the Indian government is promoting manufacturing sector through campaigns like make in India.

2. Legal:

businesses FIFA to operate in a country where there is a sound legal system. Harbour in any country businesses must have a good working knowledge of the major laws protecting consumers, competitions and organizations. Businesses must understand the relevant laws relating to companies, competition, intellectual property, foreign exchange, labor, and so on. For example, new GST law will influence most of the businesses.

3. Political:

political pressure groups influence and limit organisations. Apart from sporadic movements against certain products, service and organisations politics has deeply speeded into unions. Also special interest groups and political action committee put pressure on the business organisations to pay more attention to consumers rights of minority rights and so on.

Social cultural environment:it is to a general factor which influences almost all enterprises in a similar manner. It represents a complex of factors such as social traditions, values and beliefs level and standards of literacy and education the ethical standards and the state of society, the extent of social infurcation conflict and Cohesiveness and so forth. Socio cultural environment consists of factors related to human relationships and the impact of social attitudes and culture values which has bearing on the operations of the organisations for soft the beliefs values and norms of a society determine how individuals and organisations should be interrelated. The core beliefs of a particular society tend to be persistent. It is difficult for a business to change these core values, which becomes a determine of its functioning.

Technological environment:the most important factor which is controlling and changing people's life is technology. Man could realise the dream of walking on the moon travelling in spaceships and giving to the other side of the globe within a few hours.

Technology has changed the way people communicate with the advent of internet and telecommunication system. Technology has changed the ways of how business operates now this is landing too many new business opportunities as well as making absolute many existing systems. technology can act as both an opportunity and threat to the business. It can act as opportunity as business can take advantage of adopting technological innovations to their strategic advantage fullstop however at the same time technology can act as a trade if organization are not able to adapt it to other and their advantage.for example, an innovative and modern production system can act as if the business is not able to change its production system.

New entrants can always use the availability of technological improvements in product or production methods that can be treated to a business. Technology and business are highly integrated and interdependent. The fruits of technological research and development are available to society through business only and this also improves the quality of life of society. Hence technology is patronized by a business. Then again technology also directs the business and makes a total chance on how it is carried out.

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