BUSINESS AND BUSINESS

ENVIRONMENT
INTRODUCTION:

 The macro environment comprises external

factors that influence businesses and are not
within their control. These factors encompass
political, economic, social, technological,
environmental, and legal aspects. This
presentation aims to showcase modern-day
examples that illustrate the positive and negative
effects of the macro environment on business
operations.
POSITIVE INFLUENCE OF MACRO ECONOMICSON
OPERATIONAL PROCEDURES OF BUSINESSES:

 One example of how the macro

environment can positively affect business
operations is the COVID-19 pandemic,
which has created a surge in the need for
remote work technology and online
shopping.
 This shift has presented novel possibilities
for businesses to adapt and innovate.
POSITIVE INFLUENCE OF MACRO ECONOMICSON
OPERATIONAL PROCEDURES OF BUSINESSES
 Increased tariffs and supply chain disruptions
resulting from the ongoing trade war between
the US and China have adversely impacted
businesses in both nations.
 The US-China trade war has created negative
repercussions for businesses in both
countries, including supply chain disruptions
and higher tariffs.
POLITICAL FACTORS AND ITS IMPACTS ON
BUSINESSES:
 Government policy alterations and
regulatory changes, like tax
incentives for renewable energy,
have the potential to foster growth
in emerging industries and
generate fresh business prospects.
 New opportunities for businesses
and advancements in emerging
industries can be created through
changes in government policies and
regulations, such as tax incentives
for renewable energy.
ECONOMIC FACTORS AND ITS IMPACTS ON
BUSINESSES
 Businesses across different
industries can be negatively
affected due to reduced consumer
spending, job losses, and intensified
competition as a result of economic
recessions and downturns.
 The negative impacts of economic
recessions and downturns can lead
to reduced profitability, market
share, and even bankruptcy for
businesses.
TECHNOLOGICAL FACTORS AND ITS
IMPACTS ON BUSINESSES
 Technological advancements
such as automation and
artificial intelligence can
enhance efficiency, reduce
costs, and boost profitability
for businesses, thereby
fostering growth.
 The adoption of technology in
business operations can
streamline processes, improve
accuracy, and enhance the
overall quality of goods and
services, resulting in a
competitive advantage for
businesses.
ENVIRONMENTAL FACTORS AND ITS IMPACTS
ON BUSINESSES

 Businesses operating in regions

affected by natural disasters and
climate change can experience
negative impacts such as supply chain
disruptions, rising production costs,
and reduced consumer demand.
 Climate-related risks and hazards can
cause long-term economic losses,
physical damages, and reputational
harm for businesses, underscoring the
need for effective risk management
strategies.
Internal strengths:

 Businesses can gain a

competitive advantage by
leveraging their internal
strengths, such as talented
workforce, innovative
technology, efficient processes,
and strong brand reputation.
 Internal strengths refer to the
unique advantages that
businesses have internally,
which help them to achieve
their objectives and
outperform competitors.
Internal weaknesses:
 Internal weaknesses refer to
deficiencies within a business
that negatively impact
performance and growth,
such as outdated technology,
poor leadership, and
inadequate resources.
 Addressing internal
weaknesses can reduce a
business's vulnerability to
external macro factors and
improve their growth
prospects.
External macro factors:

 External macro factors, such as economic conditions, government policies,

and technological advancements, can impact businesses externally and
present both opportunities and threats.
 By assessing external macro factors and adjusting their internal strengths and
weaknesses accordingly, businesses can adapt to changes and capitalize on
external opportunities.
relationship of internal and external factors
in organisations:

 A business's internal strengths and weaknesses can impact how it responds to

external macro factors.
 Businesses with strong internal strengths can better capitalize on external
opportunities and mitigate external threats, while those with internal
weaknesses are more vulnerable to external macro factors. Adapting internal
strengths and weaknesses to external factors can help businesses remain
competitive and achieve their objectives.
Conclusion:

It is crucial to acknowledge the impact of the macro

environment on business operations, as it can
determine a business's success or failure. Some
businesses may benefit from favorable macro
factors like government policies, technological
advancements, or cultural trends, while others may
struggle due to unfavorable factors like economic
downturns, regulatory changes, or natural disasters.
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