Micro and Macro Environment

1. Micro & Macro
Environment
By- Ms.Shivani Naik Devrukhkar,
ASSISTANT PROFESSOR, (MBA, MCOM,
PGDHE, NET, B.ED)

2. Concept
• Every business organization is a part of the business
environment, within which it operates. No entity can function
in isolation because there are many factors that closely or
distantly surrounds the business, which is known as a business
environment. It is broadly classified into two categories,
i.e. microenvironment, and macro environment. The former
affects the working of a particular business only, to which they
relate to, while the latter affects the functioning of all the
business entities, operating in the economy.

3. While microenvironment has a direct impact on business activities, the macro
environment is a general business environment, which influences all business
groups at large. It is important to learn the business environment, so as to
understand the effect of various forces on business.

4. Comparison between Micro & Macro
Environment

5. Micro Environment
Microenvironment refers to the environment which is in
direct contact with the business organization and can affect
the routine activities of business straight away. It is
associated with a small area in which the firm functions.
The microenvironment is a collection of all the forces that
are close to the firm. These forces are very particular for the
said business only. They can influence the performance and
day to day operations of the company, but for the short
term only. Its elements include suppliers, competitors,
marketing intermediaries, customers and the firm itself.

7. •Suppliers are the ones who provide inputs to the
business like raw material, equipment and so on.
•Competitors are the rivals, which compete with the firm
in the market and resources as well.
•Marketing intermediaries may include wholesalers,
distributors, and retailers that make a link between the
firm and the customers.
•Customers / Consumers are the ones who purchase the
goods for their own consumption. They are considered
as the king of business.
•The firm itself is an aggregate of a number of elements
like owners like shareholders or investors, employees and
the board of directors.

8. The general environment within the economy that
influences the working, performance, decision making and
strategy of all business groups at the same time is known as
Macro Environment. It is dynamic in nature. Therefore it
keeps on changing.
It constitutes those outside forces that are not under the
control of the firm but have a powerful impact on the firm’s
functioning. It consists of individuals, groups, organizations,
agencies and others with which the firm deals during the
course of its business.
Macro Environment

10. The study of Macro Environment is known
as PESTLE Analysis. PESTLE stands for the
variables that exist in the environment, i.e.
Political, Economic, Socio-cultural,
Technological, Legal and Environmental.
These variables, consider both economic
and non-economic factors like social
concerns, government policies, family
structure, population size, inflation, GDP
aspects, income distribution, ethnic mix,
political stability, taxes, and duties, etc.

11. Assignment
Read the Research paper connecting the various micro and
macro aspects of a business unit and discuss your learnings
https://www.jetir.org/papers/JETIR1701077.pdf