1. Table of Contents
Introduction.......................................................................................................................................2
Political environment;.........................................................................................................................2
Technological environment;................................................................................................................2
Demographics environment.............................................................................................................3
Cultural environment........................................................................................................................3
Economic environment ....................................................................................................................3
Competitor’s environment................................................................................................................4
Conclusion....................................................................................................................................4

2. FORCES THAT IMPACT ON ORGANIZATION IN MACROECONOMIC ENVIRONMENT
Introduction
Macroeconomic environment has forces which impact negatively and positively on an
organization which are political, technological, demographics, cultural, economic and competitor’s
environment. However the positive impact forces brings opportunities to organization while
negative impact brings harm to the organization. Macro environment refers to both international
and national influencing the organization’s market environment.
Political environment;
When countries went to invest in other countries, they first look into political environment factors
for its company to be safe and earn some profits and benefits. They look for things like peace and
stability in that country, meaning if peace and stability are taken into consideration then it is easy
for it to invest in that country. Again not only foreign countries look into peace and stability but
also law of protection which protects the organization directly. Without this law of protection it will
be difficult for foreigners to invest in their countries because they are not sure whether their
interest will be secured. Allan (2002:39) stated that in a political economy model of determination
of tax rates are experienced and conflicts over whose preferences will be reflect in aggregate
policy. Conflict over tax policy may also reflect ex-post heterogeneity as organizations use the tax
system to try to redistribute resources towards themselves. It can also lead to grossly inefficient
outcomes.
However one can invest in corrupted country because they might not benefit anything instead
they might run losses or go back home with nothing. Increase or decrease in tax could be an
example of a political element therefore government might increase taxes for some organizations
and lower it for other. The decision will have a direct effect on an organization, sothe organization
must always stay up-to-date with such political factors. For instance in Lesotho tax used to be
paid at the end of the year, into businesses which make profit but now it was announced that the
government will collect it every month regardless on profit and loss making.
Technological environment;
It includes combination of skills and equipment that manager us and design production,
distribution of goods and services. As a manager know how technology affect the business
positively, for instance one machine can do the work of 100 people. Jordi (1996: 10) stated that
technology has a permanent positive shock effect on output productively and permanent negative
effect on the price level. If technology shock is positive, producing the same output ill require less
labor input and decline in equipment will observed.
Furthermore, on the other hand one of the downside of technology in an organization is when the
employees are using the technology for their own benefits like using too much internet while at
work, such as downloading movies & music. This can actually affects the organization process. If
the organizations prompt adopt new technology it will overcome some challenges like its
competitors. It will increase its market. Richard said (1984:204) the problem is failure to adopt
changes can lead to decreasing of market and running loss.

3. Demographics environment
It is a factor that helps the market to divide the population into different market segments and
target segments. It includes gender, where by a market has to know which people are interested
in certain product. Again it includes age where by a market has to know which age to cater for,
while in skills they need to know which skills they want in people. For example if an organization
decides to open a business, they first have to do market research to identify the target market
and divide them into three segments, old people, married people and the youth. Therefore the
organization will be able to produce clothes according to these three segments.
Cultural environment
It has a significant impact on the organization, in that the economy start growth Culture help the
organization to look and make a research of the life of people in an environment. To invest in a
business, you first look for location, population and profile of people in that place you want to start
a business. This is where you will do research to find out what those people need most and are
willing to buy. It influences people attitudes towards the business, this means that whatever you
sell determine the culture or belief. Moreover, an organization can be affected by the seasonal
changes, meaning the fact that products will be bought according to the seasonin the atmosphere
is in, so it happens that the season changes before the products were bought by the market, it
will be the waste of products that leads to loss and increases of cost of production.
Economic environment
Decline influences the consumer standard of living and buying power. The factors within the
economic environment which impact on the organization, and consumer income, according to
Acona (1999:66) the investors also look whether the economy is growing or not, for instance when
consumer incomes fall their confidence about job security decline, they will postpone purchasing
anything that is not necessary.
Modern growth theory emphasizes growth in inputs and technology advances as the underlying
causes of economic growth. More recent work has emphasized the importance of market
institutions and economic freedom as prerequisites for growth, the importance of economic
freedom by using an index that measure economic freedom in four basis areas, namely money
and inflation, economic structure and international trade. The empirical results show that
economic freedom is a significant determinant of economic growth, even when human and
physical capital, and demographic are taken into an account.
Exchange of rate; when a company buys certain goods from a US based organization, it will have
to convert its currency into US dollars, for making the payment if the currency of the buyer is
stronger than the US dollars it will be beneficial for the company, however if it I weak the company
will have to shell out more money. Inflation occurs when there is too much supply of money in the
economy that is not supported by the output of goods and services, as there is a lot of money
floating around, the price of goods also increase in order to sustain, the business resulting in
increase of cost of raw materials thus also increases the cost of production, the buying capacity
of people decreases when incomes remain constant but the price of products and services
increases, this affects the demand for the goods.

4. Competitor’s environment
“Under competitor’s environment an organizations cannot afford to ignore its competitors.
Managers must be prepared to respond to competitors policies, regarding pricing new products,
services offered and other incentives be given to the customers” explained Thomas (1998:52).
For example you compare your prices not knowing that they reduced those prices of certain
products because they are outdated, so you might sell them in same price which will lead to
increase of cost of production and run loss. Furthermore the presence of competitors helps to
drive down the profit that a firm can make. When there are more competitors the organization
have to face more and more businesses and markets and have to worry about trying to beat out
their competition. The negative impact is that they do not have extra benefit or capital to expand
resources like large organization. One prime example is how the United States purchasing many
of our goods from china. This is because labor is much cheaper in China and they are able to
produce more for a small price. This make it hard on small organization within the united states
who are struggling to factor in all of their cost and have to keep up with foreign rate.
Furthermore a large number of competitors in an organization usually signifies lots of demand for
the products or services provided meaning when the business lacks competition, you might not
find enough demand to succeed in the long run. For example your competitors are able to offer
their product for much lower price than yours, your marketing strategy must stress the fact that
your product is of a higher quality that your product lasts longer. Again unhealthy competition also
negatively influences a team’s morale and team –based spirit, therefore negatively affecting
productivity, teamwork, and cooperation. This type of competition fosters feelings of suspicion
and lack of trust among members, which lead to the development of rivals, decreased productive
energy, and potential violations of ethical standards.
Conclusion
In conclusion, this forces affect the organization’s ability to build and maintain their successful
goals and objectives and also affect its ability to serve their customers properly or appropriately.
Macro environment forces are those forces which are beyond the scoop of control of an
organization. An organization can alter its own polices as per the macro environmental conditions
but the conditions itself. The organization though a mechanized body in itself cannot work in
isolation and is always under the influence of the external forces namely macro environment.