The Macro-economic environment

  • This refers to factors pertaining to the performance, structure, behaviour, and decision-making of an economy as a whole
  • This can be on a global, national, federal, economic bloc or regional level
  • These factors can have a real effect on the operations, strategies and performance of the business
  • Macro-economic factors include:
    • Changes in employment level
    • Gross Domestic Product
    • Economic Growth
    • Inflation or deflation
    • Economic cycles (boom or depression)
    • Infrastructure development
    • Political Environment
    • Corruption levels
    • Legal environment
    • Money supply
    • Foreign Currency availability
    • Access to Foreign Direct Investment
    • A country’s credit rating
    • Fiscal Policy
    • Monetary Policy
  • Again as has been said the operations of the business is affected by this environment
  • The best macro-economic environment is one that is characterised by economic growth
  • At the very minimum, the macro-economic environment must be stable, an unstable environment is bound to have adverse effects on businesses

The Micro-economic environment

  • The micro-economic environment refers to the individual aspects of the business that are unique to it
  • It includes such factors as:
    • The business’s suppliers
    • Its customers
    • The skills of its management
    • The skills and experience of its workforce
    • It’s competitors
    • It’s customers
    • The wider public i.e any group that has an actual or potential interest in or impact on a company‚Äôs ability to achieve its objective
    • People who live within the same area as the business etc
  • All these factors interact to create a local environment that affects the operations of the business

To access more topics go to the Advanced Level Business Studies page

To access more topics go to the ZIMSEC Business Enterprise and Skills page

To access more topics go to the Cambridge AS A Level Business Studies page