Unit 1 business and the business environment l/508/0485 table of contents


LO3: USE CONTEMPORARY EXAMPLES TO DEMONSTRATE BOTH THE POSITIVE AND NEGATIVE INFLUENCE/IMPACT THE MACRO ENVIRONMENT HAS ON BUSINESS OPERATIONS



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UNIT 1 BUSINESS AND THE BUSINESS ENVIRONMENT
LO3: USE CONTEMPORARY EXAMPLES TO DEMONSTRATE BOTH THE POSITIVE AND NEGATIVE INFLUENCE/IMPACT THE MACRO ENVIRONMENT HAS ON BUSINESS OPERATIONS
The macro environment in a business world is simply the external environment in which a business exist and it is not controllable by an organisation, rather it controls the business or organisation. Its impact on business operations can therefore be either of negative or positive influence as inflation, employment level, government policies, gross domestic product (GDP), the spending ability of customers etc. are the determinant factors in this respect. Frameworks such as PESTLE which is the abbreviation of political, economic, social, technological, legal and environment factors can be used by businesses to analyse external influences on them.
Political and Economic Impact
Political and economic environment from PESTLE can be seen as those external factors that affects the activities of organisations. The political factor helps in analysing the essential government regulations and helps in giving a stable condition. The political environment also supports the export and imports in an effective and efficient manner. As regards this, the factors influencing business environment are political stability, tax and economic policy, employment laws and legislations foreign trade rules and regulations. Government do come up with policies which affect different businesses in terms of the growth and profit making ability of businesses.
More so, the economic factors of the country very much influence the results of the organisation. If the economic factors are in a positive situation then it helps in increasing productivity in the market; among others. A good example was when there was inflation in the market for some of the consumables the organisation make use in rendering our different services; the impact of this on the pricing of ..companyname..is that it increased and only few of our customers was able to afford our services. This therefore means a drop in profit for the organisation. The political instability of a state or nation is capable of limiting the growth of an organisation, same goes with …the company name….

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