12/31/2023 0 Comments Macro environment analysis example![]() All businesses are affected by national and global economic factors. The second element of a PEST analysis in involves a study of economic factors. Ineffective voluntary codes and practices will often lead to governments introducing legislation to regulate the activities covered by the codes and practices. Non conformance with legislative obligations can lead to sanctions such as fines, adverse publicity and imprisonment. Trade agreements, tariffs or restrictions. ![]() ![]() Legislation such as the minimum wage or anti discrimination laws.Political factors include the following types of instrument: Conversely they can place obligations and duties on organisations. Political factors can create advantages and opportunities for organisations. Political factors influence organisations in many ways. The first element of a PEST analysis is a study of political factors. The diagram below shows the 4 components of PEST Analysis political, economical, social and technological. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis. This is a simple analysis of an organisation's Political, Economical, Social and Technological environment. To learn more about the micro environment (and marketing) click on this link Micro Environment.Ī PEST analysis is used to identify the external forces affecting an organisation/making up its Macro Environment. Micro Environment - This is made up of internal factors which means that the organisation is able to control their micro environment.Macro Environment - This contains external forces that an organisation can't directly control, instead organisations need to manage their macro environment in a way that benefits them.Macro & Micro Environmental FactorsĪn organisation's operating environment has two parts the Macro environment and the Micro environment A successful organisation will not only understand existing factors but also forecast change, so that it can take advantage of change within the environments in which it operates. An organisation's success is influencd by factors operating in it's internal and external environment: an organisation can increase it's success by adopting strategies which manipulate these factors to it's advantage.
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