Difference Between Micro- and Macro-Environments

Written by sarie robertson
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Difference Between Micro- and Macro-Environments
The macro-environment determines how much a customer will spend. (Photos.com/PhotoObjects.net/Getty Images)

The daily operations of an organisation are influenced by a number of factors. Although employee relations may be good, a poor economy can spur layoffs and bad production. Whereas microenvironments are a compilation of influential factors within a company, such as employee relations or customer satisfaction, macro-environments are external factors that affect an establishment. In many respects, factors in the macro-environment have influence over decisions made on the micro-scale.

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Differring Factors

Macro-environments typically encompass factors that a business cannot control. Technological advances and political conditions are examples of influential factors a company must adapt to when making decisions. By contrast, microenvironments present situations that a company can control. Instead of adjusting to poor employee performance, a business can elect to terminate individuals not meeting company standards.

Customers and Society

On the macro-scale, changes in social trends determine what will be sold. A company may not sell camcorders because of lack of popularity among the general public but may choose to feature plasma televisions because of increased interest. Responding to societal needs on the macro-level is important because it leads to more customers on the micro-level that make a business thrive. In the micro-environment, a company with many customers is viewed as successful and one with few customers is seen as failing. Although society has influence over what individuals buy, increasing clientele is a micro-problem that can be solved with customer satisfaction surveys and better service to guests.

Technology and Employment

Technological advances in the macro-environment influence employment decisions on the micro-level. New technology leads to new processes for conducting business. In order to survive in a highly technological environment, companies must hire individuals who have knowledge about electronics and software. Instead of selecting candidates solely based on experience and education, companies may also require familiarity with programs such as Word and Excel.

Economic Changes and Suppliers

Changes in the economy, such as interest rates and taxation, influence the supply of a company. Whereas high interest rates and taxation negatively affect supply, low prices lead to increased purchasing power. A company that can afford to pay for product and taxes will purchase more supplies. A business that can afford the product but not the taxes will be restricted from buying more material. Adjusting to economic changes on the macro-level is often a matter of building positive relationships with suppliers in the micro-environment. In many instances, such relationships will lead to discount pricing and increased purchasing power.

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