Strategic management final exam bachelor degree - Term Paper Example

This relationship identifies validity of the statement from the perspective that organizations can focus on their microenvironment and manage the factors to overcome any possible effects of the macro environment. This is because microenvironment such as organizational behavior and employee efficiencies are easily manageable as they are under organizations’ powers. A consideration of a business’ long-term scope and effects of the macro environment however invalidates the statement because micro environmental factors influence many organizational activities.

The economic environment that includes economic conditions and economic policies is the first significant factor to organizations. Factors such as inflation rates, unemployment rates, trade regulations, and interest rates have significant effects on productivity of and profitability of an organization and therefore affect sustainability. Political environment is another significant macro environment factor and plays a significant role in influencing success of business organization. Political stability establishes investors’ confidence and therefore facilitates commercial activities, especially at global level and political ideologies and relations with other countries facilitate ties for favorable business environments.

Socio cultural environment that include people’s preferences, “family systems, caste systems, education, marriage,” among other social and cultural factors determines markets and revenue levels to businesses (Mukesh and Trehan n.d, p. 12). Technological environment with its characteristic advantage of facilitating operational efficiency and demographic factors that determine volume and trend of demand for products is also very important to business’ organizations’ lives. The significance of macro environment that dictates sustainability and efficiency of organizations’ internal factors therefore identifies relevance of the environment to businesses.

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