University of Chicago
Type of paper: Thesis/Dissertation Chapter
How the Macroeconomic Environment Affects Human Resource
A microenvironment is simply a small environment within the operations of a business in which there are specialized features that make environment different from other business environments. In essence, it is the nearby and surrounding factors that affect and determine this environment. These factors affect the ability of the company in terms of service provision. As a matter of fact, it affects the supplies of the company, marketing strategies, marketing intermediaries, public relations and general company operations. Generally, a business microenvironment refers to the factors or elements within a particular organization and its immediate area of operations that in one way or another, has an effect on the performance of the company as well as the decision making processes of the company or business. CITATION Cal14 l 1033 (Monroe 2014)These elements are among the general public, since they form the bulk of the market, the channels of distribution among others. At the end of the day, this environment is of much importance to the success of a business. This paper gives an in-depth analysis of the microenvironments and macro environments of supermarkets as well as mobile companies thereby giving the empirical and theoretical relationships between the performance and of these business organizations as compared to their environments. The best strategy of analyzing the microenvironment of a business organization is through the SWOT technique in which one analyzes the Strengths, Weaknesses, Opportunities and Threats within the company. CITATION Sub07 l 1033 (Subrata Ghatak 2007)The Strengths of a Company greatly determine the success of business organizations. The strength of a business organization can be measured in terms of; technological advancements, economies of scale as well as the availability of resources. The technology of a mobile company determines the amount of their sales. For instance, high levels of technology for a mobile company would reduce the cost of production that a company incurs. Decrease in cost of production simply implies that the company makes super normal profits, that is, profits greater than zero. Technology therefore plays a very key role. Economies of Scale have the same effect as well. Economies of scale simply imply to the company’s or supermarket’s market base. Companies that enjoy economies of scale lower their cost of production, thereby increasing their profit margins. Resource availability is also equally important. As a matter of fact, the importance of availability of resources to any business organization can never be underestimated. Resource availability is could imply human, natural or financial resource. All these are the drivers of the business, both in a mobile company as well as for supermarkets. CITATION Arv l 1033 (Arvil Van Adams n.d.)The weaknesses within an organization also determine its level of performance to a very large extent. What matters at the end of the day is how the supermarket or mobile company in question addresses the weakness that it faces in terms of operation. The most common weaknesses in either of these two enterprises are in terms of the prices, globalization and marketing. For mobile companies for instance, it is very difficult to come up with price floors owing to the products they produce. Generally, mobile phones are relatively expensive. As such, they are not the easiest products to market. Globalization on the other hand, is important since it determines the market base and network of a business. Most mobile companies have done tremendously well in this particular area. CITATION Sub07 l 1033 (Subrata Ghatak 2007)Opportunities and Threats play a very crucial role in the microenvironment of a business organization. They either make or break the organization. The opportunities of supermarkets and mobile companies most of the time come as a result of collaboration. For instance, supermarkets can collaborate with the companies that they sell their products. It is through such strategies that supermarkets can easily give their clients discounts and offers. Discounts and offers are simply marketing strategies in which business organizations attract their customers. Mobile companies, on the other hand, can take advantage of their opportunities through collaboration with other electronic companies. For instance, they could collaborate with network service providers and as such use this platform to market their products. It is very important therefore, for a company to take advantage of whatsoever opportunity that comes their way. CITATION Les12 l 1033 (Leslie Hamilton 2012)A threat is another factor that is prevalent in the microeconomic environment of a business. There are various forms of threats that can affect the performance of a business. Threats may result from social, political or economic sources. However, common threats that mobile companies and supermarkets face are in relation to risks and uncertainties. Risks and uncertainties face almost every business and they could be in terms of price fluctuations, the risk of a technology becoming obsolete, market variations and so on. Competition is another threat that mobile companies as well as supermarkets have to deal with. It is a challenge that also comes an opportunity. Competition encourages organizations to come up with more advanced forms of technology for instance of mobile companies. Supermarkets, on the other hand, experience a lot of competition due to the homogeneity of products. CITATION Les12 l 1033 (Leslie Hamilton 2012)The next part of the paper gives an insight on the macroeconomic market. This market environment deals with broader economic issues such as inflation, unemployment, national income and GDP. The Pestel model is the best analysis to use so as to examine this economic environment. The Pestel assessment basically deals with the political environment, the environmental environment, the social, technological, economic and finally the legal environment that surrounds an organization. Basically, a macro environment defines the conditions that exist in the whole economy as opposed to particular sections or regions in the economy. As such, this environment follows up the trends in the GDP market, monetary policies, fiscal policies, level of spending as well as employment. CITATION Dee06 l 1033 (Deepashree 2006) The political environment generally deals with the political factors that affect the performance of a business. Political factors, more often than not, come with policies. The fiscal and monetary policies for instance, affect businesses to a great deal. This depends on whether they are expansionary or contractionary. The government of a country has control of most businesses. Another way through which political factors affect businesses is through the political environment of a country, that is, whether the political temperatures are favorable for investment. Political instabilities in a country greatly discourage investment. This affects both mobile companies and supermarkets since it raises the question of globalization. With high political temperatures, it becomes very difficult to explore global markets. CITATION Arv l 1033 (Arvil Van Adams n.d.)The environment, on its own affects the performance of a business. The environment of a business is basically determined by the climatic conditions. The climate, or weather, in this case, will mostly affect a supermarket. As a matter of fact, there are goods whose demand rises with temperature. Such goods are among electronic fans. Supermarkets are bound to experience increase in sale of such product in the hot weather. On the other hand, there are other products such as umbrellas whose demand is bound to increase with the onset of cold weather. As such, though to a small extent, environmental factors play a role as factors in the macroeconomic environment. CITATION Sub07 l 1033 (Subrata Ghatak 2007)Social and cultural factors have a major effect as elements in the macroeconomic environment. This segment affects the performance of a business through the traditions, customs and beliefs of a society. It also deals with the issue of aging. Aging has an indirect effect on the demand and supply of a commodity. For the working population, when they age, they are paid handsomely in terms of pension. As a result, most of them might tend to spend more on luxury goods. This is how mobile companies get to benefit. The general consumption for this proportion of population increases and as such, this also affects supermarkets. The beliefs and attitudes of a population also determine the consumption pattern through tastes and preferences. CITATION Cal14 l 1033 (Monroe 2014)Technological factors affect the operations and performance of a business to a very large extent. Technology has a direct effect on production costs. This is because high levels of technology imply less production costs. The relationship between technology and consumption is quite simple. Technology is a major factor of production, both for mobile companies and supermarkets. There is low demand of human resource with high levels of technology. This makes production relatively cheaper. The total cost of production reduces as well. The end result of this is that the profit margin increases. Technology may also become obsolete and this has a negative impact on the performance of the business. CITATION Les12 l 1033 (Leslie Hamilton 2012)Economic factors are the other factors that are prevalent in the macro environment of a business. Under this umbrella lie major issues to do with inflation, unemployment, GDP, Per Capita Income and many others. These factors generally create an economic environment and have the same effect on mobile companies and supermarkets depending on their degree of severity. A highly inflated economy means that the general price level of goods be it in supermarkets or from mobile phone companies. As a result, such an economy does not encourage investment by either of the two enterprises. CITATION Dee06 l 1033 (Deepashree 2006)Legal factors; these are legislations that affect the performance of a business. The quota system, for instance, is a legislation that affects the amount of imports. Narrowing down to mobile companies, they are affected by government policies to a very great extent. This is because their transactions mainly involve importation and exportation of products. Most governments have extremely stringent laws and regulations. Governments are often very strict especially with the quality of goods they import. Moreover, with respect to supermarkets, governments may have very strict regulations with regard to importation so as to promote local industries. Such issues affect the performance of companies to a very great extent. Taxes, which are stipulated by the government, are other pieces of legislation that both mobile companies and supermarkets have to come to terms with. From the above analysis, we can conclude that both the macro environment and the microenvironment have on the performance of a business, both positively. CITATION Arv l 1033 (Arvil Van Adams n.d.)
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