Business Studies Grade 11 Business environments and extent of control:
Reasons why businesses has more control over the micro environment/less control over market environment and less control over macro environment
Micro environment
- Business owners and managers have a great deal of control over the internal/micro environment of business, which covers day-to-day decisions.
- They choose the suppliers they purchase/which employees they hire/the products they sell, and where they sell those products.
- They use their skills and resources to create goods and services that will satisfy existing and prospective customers.
Market environment
- Market environment for a business includes company related influences
- The market environment refers to influences that have an impact on the success in forming and keeping a sustainable business such as competition and suppliers.
- Businesses can influence their competitors by increasing the quality of their products in relation with competitor prices.
- The opposite can also be that suppliers’ raw materials can influence the quality of business products
Macro environment
- The market environment refers to the major external and uncontrollable factors that influence an organization’s decision making.
- These factors include the economic/demographics/legal/political/social conditions/technological changes and natural forces.
- The above mentioned factors affect business performance and strategies.
- The external environmental conditions that affect a business are generally beyond the control of management and change constantly.