To understand what the macro-environment of a company is, we need to examine some basic concept of entrepreneurial management. Various factors affect the daily operations of an organization. For example, if the teamwork is excellent but there are problems of economic nature, such company will not be able to avoid layoffs.
The macro-environment of a company interacts continuously with the micro-environment. The micro-environment includes several influential factors within a company, such as employee relations and customer satisfaction. And reversely, the macro-environment refers to the factors outside the company. The factors related to the macro-environment directly influence the decisions made on the micro scale. The macro-environment is primarily concerned with factors that a company cannot control. Technological advances and the political conditions are an example. Conversely, a company may decide to take action on issues that do not meet company standards within the micro-environment.
In the macro-environment of a company, changes in social trends determine sales trends. Having a good knowledge of the macro-level is essential to meet the needs of society. Understanding market trends and demand serves to increase the number of customers and related sales. At the same time, in the micro-environment, you will be able to implement strategies to increase customers and their satisfaction. The main principle is maintaining regular the customer satisfaction surveys.
Advances in technology and management of the macro-environment of a company influence decisions at the micro level. Take for example the target of new technologies.
To survive in a highly technologized environment, companies need to recruit staff. Employees should ensure professional knowledge in such fields as electronics or software, depending on the company’s profile. To understand better what is the macro-environment of a company we have to consider also the economic situation.
Changes of great impact, such as interest rates and taxation, influence the offer of a company. While the high interest rates and taxes have a negative effect on supply, lowering the price leads to an increase in purchasing power. A company with good disposable income will buy more supplies. The management of economic changes on the macro level is often linked to the building of positive relationships with suppliers in the micro-environment. In some cases, these relationships will lead to lower prices and increased purchasing power.
To better understand the definition of the macro-environment, it is useful to deepen the general concept of corporate structure.