Macro Environment
Q.1) Explain How Macro Environmental Factor Affect International Business Product With An Example.
There are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categories them using the PESTEL model. This classification distinguishes between:
Political factors:
These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidizing firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
Economic factors: These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm 's behavior. For example:
Economic factors:
These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm 's behavior. For example: * Higher interest rates may deter investment because it costs more to borrow. * A strong currency may make exporting more difficult because it may raise the price in terms of foreign currency. * Inflation may provoke higher wage demands from employees and raise costs. * Higher national income growth may boost demand for a firm 's products.
Social factors:
Changes in social trends can impact on the demand for a firm 's products and the availability and willingness of individuals to work. In the UK, for example,
There are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categories them using the PESTEL model. This classification distinguishes between:
Political factors:
These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidizing firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
Economic factors: These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm 's behavior. For example:
Economic factors:
These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm 's behavior. For example: * Higher interest rates may deter investment because it costs more to borrow. * A strong currency may make exporting more difficult because it may raise the price in terms of foreign currency. * Inflation may provoke higher wage demands from employees and raise costs. * Higher national income growth may boost demand for a firm 's products.
Social factors:
Changes in social trends can impact on the demand for a firm 's products and the availability and willingness of individuals to work. In the UK, for example,