8

Ms S.Langa
Aims of lesson

 Understand the concept “ macro environment”

 Identify and briefly explain the components of the
macro environment.
 In detail to discuss the importance of “macro”
environment.
 Understand the degree of control the business has
over the “macro ” environment.

Ms S.Langa
NOTES :DEFINITION

 Macro environment can be defined as the external part

of the business.
 Management has no complete control over the macro
environment.
 It is made up of all the forces ,events and circumstances
that affect a business and its market environment.
 Changes continuously ,which means that one of the
roles of business management is to put strategies and
intervention in place that will take advantage of
opportunities and respond to any challenges and threats

Ms S.Langa
Macro Environment
Elements
Physical Environment
Consist of resources from the natural environment and infrastructure
Examples of resources are water ,raw material and climate
Businesses use resources and infrastructure to produce goods and services
Economic Environment
Includes all the factors influencing finance and prices
Influences the prosperity of consumers, business and investors.
Inflation makes money worth less and assets worth more

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Macro Environment Elements

Social environment
 Is the expression of the culture,norms,values and
lifestyle of the citizens of the country.
 The cultural environment refers to religion ,traditions,
community trends and values.
 Refers to different aspects of the population ,including
age ,race, gender and size.
 Technological environment
 Includes the development of new and innovative
knowledge ,products ,resources, techniques and
markets.
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Macro Environment Elements

Legal / political environment

 Legal environment consist of the institution and laws
that regulate how business is performed.
 Includes all the laws that impact the functioning of
business.
 Political environment
 Involves those decisions made by politicians that affect
business.
 Includes the system of government that is in place as
well as the ideologies and policies of the political
parties in a country
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Macro Environment Element

 Global environment
 Refers to the trend of many large businesses to source
goods and services from locations outside their home
country in order to take advantage of differences in
quality and cost of production.
 Todays world has better communication ,more trade
and countries are increasingly interdependent.
 The current exchange rates impact on the prices of raw
materials and finished goods.

Ms S.Langa
Macro Environment Elements

 Institutional environment
 Refers to the governments control over the
policies ,laws and requirement that control operations
in a country.
 The government supplies certain goods and services
 The government buys certain goods and services
 The government sets fiscal and monetary policies, and
regulate completion.

Ms S.Langa
CLASSWORK-SOLUTIONS

 1.customers/consumers
 Suppliers,intermederiaries,competitors and civil
society.
 2.Buying goods on line(internet usage)
 3.The external environment, because management has
no control or influence over environment.

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HOMEWORK ACTIVITY

 1.In detail explain the business responsibilities to the

physical/natural environment.
 2.Provide an illustration of a physical environment

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HOMEWORK SOLUTIONS

 1. Businesses need to ensure that their operations do not

impact negatively on the natural environment. They should
decrease the negative effects of pollution by finding safe
ways to get rid of waste materials. Provide examples
thereof.
 Businesses should find alternative energy sources, for
example, solar energy and wind energy. More and more
businesses are taking this responsibility seriously, and more
consumers are insisting that the products they purchase are
environmentally friendly. This creates both opportunities and
challenges for businesses.
 Businesses should treat the physical environment in a
responsible way, for example, by recycling materials and
using wood from sustainable forests.
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Homework Solution

 2.

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 Moodle quiz 7

1. The macro environment is also known as a decision making

environment
2. Management has control over the environment.
3. The institutional environment refers to the governments control
4. The GEAR aims at economic growth and development in S.A
5. Technology brings constant innovation and change to the business
environment.

Ms S.Langa
MOODLE ANSWERS

 1.false
 2.false
 3.true
 4.true
 5.true

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