MACRO-ENVIRONMENTAL ANALYSIS

The macro-environment audit examines the broad range of environmental issues that may
affect the organisation. This is normally referred to as a PEST (Political, Economic, Social and
Technological) analysis. The aim of this analysis is to identify the critical issues in the external
environment that may affect the organisation.
● Political/legal issues.
The structure of a political system defines the centres of political influence.Therefore
when considering this area of the environment a much wider view has to be taken than
just the domestic national government or the legal process.
● Economic factors
Economics is concerned with the allocation of resources. Therefore issues such as
conservation of natural resources, costs of pollution, energy consumption and the whole
area of the management of natural resources should be considered under this heading.
● Social/cultural issues
Demographic changes are important and can be used as lead indicators in certain areas.
However other critical areas such as social/cultural values and beliefs that are central to
changes in consumer behaviour are harder to predict and can be subject to more dramatic
shifts.
● Technological developments
Identifying new technologies that can service that consumer’s needs more completely or
economically is the critical part of this area of the analysis.