Analysis of the Factors in the Macro Environment That Have Major Impact to a Company

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ORGANIZATION AND ENVIRONMENT

Analysis of the factors in the macro environment that have major impact to a company and assessment of the steps taken by the company to overcome the problems. Case study : Maybank Malaysia

By AhmadRawi

The writer can be contacted at:
scholars.assist@gmail.com

By AhmadRawi

The writer can be contacted at:
scholars.assist@gmail.com

INTRODUCTION

Strategic management experts have stated that in order to achieve a competitive advantage, a company needs to pursue strategies that build on its existing resources and capabilities and formulate strategies that build additional resources and capabilities (develop new competencies) (Hill and Jones, 2010, p.103).

Strategies are formulated after considering various factors external and internal to the company. This paper will focus only on the external (macro) environments of the company that have major impacts to them. Towards this end a PEST analysis will be done to the macro environment of a chosen company. PEST analysis is an overview analysis of the environment that the business is in. In PEST analysis, four factors are considered namely Political factors, Economic factors, Social factors and Technological factors (thus the acronym PEST) (Turner, 2010,p.56). Recent trend in the field of strategic management advocates the inclusion of a further two factors namely, Environmental factors and Legal factors. All combined the macro environment factors analysis will be known as PESTEL.

Macro environment factors are beyond the control of an organization. This is because those factors are positioned outside the organisational system. Those forces are the prime factors in corporate strategization i.e. determining the objectives of an organisation, its drive for profits, its projection for future sales as well as a protection step in preventing any losses or problems. According to Lowe and Marriott (2006,p. 181),macro factors are the major trends and changes that affect all organizations within a nation, a region or the world and essentially include the major political, legal, economic, social, cultural, 'green' environments and technological factors.

This paper proposes to analyze the macro environment factors impacting Malayan Banking Berhad, or better known as Maybank in their quest to be regional financial services leader .As a prominent financial institution in Malaysia and stands as the Best Domestic Private Banking from Asiamoney Annual Private Banking Poll 2010 as well as won Euromoney Award for the Malaysia Best Private Banking Services Overall, Maybank also received numerous awards and recognitions for its efficiency in customer affair and corporate relation. Despite the glory and honour crowned to Maybank's achievements, it is inevitable to deal with macro environment which commonly come along the way throughout their business days. In order to analyze the impact of macro environments on Maybank generally, it is essential for the scope of analysis to cover the political, economic, social, technological, environmental and legal factors (or better referred as PESTEL analysis).

DISCUSSION

The first factor i.e political factor refers to the local government policy and administrative affairs in the business geographical location. It covers the level stability and security provided for the outside investors by the government of a particular location or country. The confidence of the reliability and dependability of the government's administration will encourage those investors to spread their business wings in the country. As one of world financial providers, Maybank needs to study the political scenario of one particular country before finalising the decision on venturing into new business in that country. For instance, when Maybank set up its third branch in Cambodia, the increasing political stability in Cambodia had given the confidence to Maybank to operate its business there. Commenting...
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