IF & EDI Case Study Part 1

Summary:

An organization's macro-environment refers to all major, uncontrollable, external forces of a company that directly or indirectly influence decision-making. These are often economic, demographic, technological, political, natural, cultural, social, or legal forces.

Macro environment analysis is part of strategic management in many organizations and involves identifying and analyzing potential opportunities and dangers that arise in the macro-environment. Its main purpose is to provide management with accurate information to help them make operational decisions.

This analysis and related work is typically performed by business analysts. They make recommendations based on their research into environmental forces. In practice, these are mainly related to politics, economics, demography and technology.

Why is a macro environment analysis important?

The purpose of performing and evaluating a macro environment analysis is to answer the following two important questions:

1)Which environmental factors will influence the growth of our sector as a whole in the future?

2)What is the cumulative impact of all developments in our sector? Will our industry grow or shrink in the coming years?

The macro-environment analysis attempts to predict future trends based on current knowledge. This makes it extremely difficult: situations change and forecasts will therefore often deviate.

Tools and methods for macro environment analysis

The most popular and used tool for performing macro environment analysis is the PESTEL Analysis. PESTEL is an acronym for Political, Economic, Social, Technological, Legal and Environmental.

Political Macro Analysis

A current example of political macro-analysis is the shift towards greener government policies in the developed world.

With upcoming elections, we look at a variation in the policies of different parties and the impact of these positions on, for example, the industry. These factors say a lot about the way in which companies will be bound by new laws and regulations in the future when it comes to sustainability.

Economic Macro Environment Analysis

In an economic sense, the macro environment refers to the set of conditions that exist in the economy as a whole, rather than at the micro level, such as a sector or region.

An analysis of the economic macro environment often includes identifying trends in the gross domestic product (GDP), employment, spending, monetary & fiscal policy, inflation, and more. The economic macro environment is closely linked to the business cycle.

Social Macro Analysis

The social macro-analysis mainly focuses on identifying trends in the beliefs, behaviors, values and norms, and other characteristics of societies.

Examples of matters that are analyzed in the social macro-analysis are the number of part-time workers, the composition of family structures, trends in population growth, and people's attitudes toward sustainability.

Technological Macro Analysis

The purpose of a technology macro analysis is to identify trends in the development and application of technology. An example of this is the shift from online purchases to traditional purchases in brick-and-mortar marketplaces and stores.

Legal Macro Analysis

Legal macro-analysis is closely linked to politics. This is because politicians are the people who make laws. Legal macro analyses further include identifying trends in court decisions. Most organizations need to be constantly aware of changes in, for example, employment law.

Environmental (environment & climate) macro-analysis

Analyses are also performed on the environment. The results of these analyses say something about the extent to which the climate will affect the industry.

You have a choice to select a company or industry:

a) Select a podcast story "Innovation fuel"

or

b) find a current issue on the internet.

1) Considering the various environmental forces impacting business, which environmental force(s) do you think your selected issue/topic relates to, and how?

2) What are the ethical implications involved in your selected issue/topic, and how can these ethical situations be resolved and/or avoided?

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You will prepare a 3-4 page (double spaced, 12-pt font, APA style) analysis in light of the questions above. You will end your discussion with your views and recommendations about your topic. The purpose of this assignment is to keep you up-to-date on the happenings in the business environment in Canada and abroad and have a critical eye on the various environmental influences surrounding these happenings.